4 Reasons Why Small Businesses Need an Employee Handbook

Jan 17, 2018
| David Pearson
Why Small Businesses Need an Employee Handbook

Human resources is often one of the biggest challenges for small business leaders. A lack of expertise in the area leaves many small employers in danger of HR related employment law violations that can result in significant penalties.

One thing small businesses can do to help prevent these HR compliance issues, while at the same time benefiting other areas of the company, is to create an employee handbook.

Employment handbooks aren’t a new resource. However, they are now starting to add in a lot more HR regulatory compliance than in the past. Some of the basic things to have in an employee handbook include:
 
  • Company mission and values
  • Workplace harassment policies and procedures
  • Company specific policies
  • Dress Code
  • Time off policies
  • Benefits offerings
  • State and Federal employee mandates

As HR has evolved and become more complex, the role and importance of employment handbooks has grown as well. Due to the rising complexity in employment regulations, handbooks encompass many important company policies and procedures. These additions enable them to be a go-to resource in today’s HR climate.

For small businesses specifically, there are a few reasons why employee handbooks are essential for HR compliance and business success.
 

1) Employee Handbooks Are Necessary to Remain Compliant with HR Laws and Regulations

One of the most important reasons to create an employee handbook is that it helps to lower the risk of employment liabilities and reduce the likelihood of employee lawsuits. Handbooks allow a place for processes and policies to be put in writing that help to reduce risk for employers.

One of the more prevalent work-related issues that has become recent headline news is workplace and sexual harassment. Creating workplace harassment policies and educating staff are a must for all companies. Employment handbooks present a place for businesses to include an anti-harassment policy, including how and who to report any grievances to.

Be sure that all compliance and workplace policies are well-written to prevent any potential issues from arising. Staying compliant with various employment laws (at the federal, state, and local level) is more important than ever, which is one reason why small businesses need to invest in an employee handbook.
 

2) Employee Handbooks are a Go-To Resource for Employees

When employers take the time to invest in and create a great employee handbook, it becomes a valuable tool for employees. Should an employment or work policy-related question arise, employees know that they can turn to their handbook to seek an immediate answer. Should the handbook not have the information needed, it should also state where or who an employee can go to for an answer to their question.

Because of the importance of the handbook for employees, they should be very easy to access. Ideally, this can be done in a few ways. Handing out hard-copy versions during onboarding is a great start, but they should also be added to other easy-to-find places. A company intranet site is one example.

Also, infusing company culture and uniqueness into the employee handbook makes it much more valuable. We’ll talk about the importance of company culture shortly.
 

3) The Onboarding Process Benefits from an Employee Handbook

For both employees and employers, onboarding is an incredibly valuable and important process. This is the new employees’ first impression of working for their company, and the beginning of their new journey in their career. For an employer, it represents a chance to move the business forward as the employee develops and grows in their new role, and over-time rises within the company.

This is why an employee handbook is so valuable for the onboarding process. It helps to get new hires acclimated to their company culture, environment, policies, procedures, mission, and much more. For many companies, the employee handbook serves as a guide for the new hire process.

A well-crafted employee handbook should provide new hires with all the relevant company information needed to get them adjusted to their new workplace and help prepare them for success with their new employer.
 

4) The Groundwork for Company Culture Begins with an Employee Handbook

It comes as no surprise that company culture is important. This is true for both employees and employers. This is another area where employee handbooks provide value. If written clear and precise, handbooks can serve as the roadmap for workplace conduct and expectations, which go a long way in establishing a company culture. Employee handbooks can also set the tone for business expectations, including the company’s mission and values.

It’s important that workplace policies, and more importantly how companies and leaders uphold them, help to create a safe and engaging work environment. These are some of the building blocks of a great company culture.

Lastly, company culture is a critical factor in achieving business success. The culture of the company is a great marketing tool for recruiting, and is very important for employer branding and employee retention. Also, better cultures lead to happier employees, and happy employees are more productive. If employees are happy and productive while at work, chances are the business as a whole will benefit.
 

Make Your Employee Handbook a Cornerstone of your Business (And Culture)

The thing to keep in mind with employee handbooks is that they don’t have to be boring. While traditionally this has been the case, some employers are taking a new approach and making their handbooks more engaging. These same employers realize that their handbooks can and should be a valuable resource for all employees, not just new hires.

But most importantly, creating an employee handbook will make for a safer and happier workplace, as well as help to keep your small business compliant and reduce the likelihood of fines, penalties, or lawsuits that can do severe damage to the company. Once you create the employee handbook, it is important to realize that it is a “living document” and should be updated regularly.

Want to learn more about PEOs? Check out our eBook, How Well Do You Know PEO? This eBook provides an overview of the PEO industry as well as helpful information for brokers and employers!

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