Overview
Running a small business without an employee handbook can be a serious challenge.
Comprehensive small business employee handbooks serve as roadmaps for your business, providing clarity and support to your team while navigating the complexities of small business ownership. Forget policies and compliance, for now—although they are important and we will speak more about them later on. Small business employee handbooks are so much more. They also explain your company’s identity, culture, values, expectations, onboarding process, modi operandi, and keys to success.
An effective small business employee handbook can be the backbone of a successful scaling organization. And yet, there is no one-size-fits-all approach to creating them; different small businesses have different priorities, requirements, rules, and ways of operating. What we have noticed, however, is that the best ones all have a variety of elements in common. This article lays out some of these components and strategies, so you will have all the information you need to create an effective and modern small business handbook of your own.
Getting Started on Your Small Business Handbook
Smart chefs prep before they cook. Great athletes study their competition before they face them. Writers research their topics in advance. We could go on… but the point is that winging it will only get you so far. Preparation is key—especially when creating small business handbooks.
There can be a lot to consider before getting started; in fact, most HR professionals we speak to dread the process. But it doesn’t have to be a nightmare. Prior to getting underway, there’s four questions you need to consider:
- ✓ Are all your policies up to date?
- ✓ Which medium and platform will be used to create and host your small business employee handbook?
- ✓ Have you established a brand identity to showcase throughout the document?
- ✓ Who among your team will help you create your small business employee handbook and who will review and provide feedback on it?
If you’ve got those four questions answered, give yourself a pat on the back! You’re ready to move on to the next section. If not, take the time to answer them now. Doing so upfront will pay dividends down the line and guide you through most speed bumps and obstacles along the way.
Essential Components of an Effective Employee Handbook
Like we said before, there is no right or wrong way to create a small business employee handbook. But the most effective and successful ones we’ve come across all feature the same six components:
- Legal obligations and employee rights
- Company values
- Employee compensation, benefits, and perks
- A code of conduct (and/or ethics)
- Conflict resolution and grievance procedures
- Employee training and development opportunities
Legal Obligations and Employee Rights
An employee handbook doesn’t just communicate company policies, it also serves as a legal shield. To be compliant, your small business handbook needs to adhere to current federal, state, and local laws applicable to where your employees work. In the US, that typically begins with at-will employment statuses, overtime requirements, equal employment opportunity regulations, and a host of federal leave laws, including the Family and Medical Leave Act (FMLA), military service leave (USERRA), and bereavement leave. Some states are more granular, with specific protections and legislation for parental leaves, employment classifications, sick time, unemployment insurance, and separation of employment rules.
A small business employee handbook that doesn’t clearly relay this information misses the mark, resulting in employees who don’t understand their rights or the legal obligations your business has toward them.
Establishing Company Values and Mission Statement
What are your values? What’s your objective as a small business? What’s most important to you as an organization—or as someone leading an organization Every company has a unique culture rooted in its mission, vision, and company’s values. Your handbook should provide employees with a clear understanding of these facets, so they can identify and align with your company’s aspirations right from the start. If you haven’t had these discussions yet with stakeholders, you might want to make them your next priority because they are THAT important!
Basic employee handbooks list this information upfront—somewhere between the welcome message and their library of policies—but never return to them or mention them again. Effective small business employee handbooks reference them throughout their pages. We’ve seen some that use these elements as callbacks to introduce policies and concepts; others that repurpose them as headings or section names; a few that even use them as the heart of (or takeaways for) case studies and testimonials. However you decide to use them, make sure they are articulated clearly in language that is easy to understand. Otherwise, what’s the point?
Employee Compensation, Benefits, and Perks
Your team members work so hard—day in, day out—for their compensation, benefits, and perks, so why not lay it all out for them clearly from the jump? Let’s start with compensation. We’re not just talking about when and how you get paid…although that information is important and should always be upfront. Your employees should also understand the ways your small business administers compensation, determines salaries, and merits raises. They also need to know what gets deducted from their paychecks, how overtime, holiday pay, and shift differentials are paid out, and whether your small business has safe harbor policies in place.
Employee benefits, on the other hand, play a vital role in attracting and retaining top talent. Yet, a surprising amount of professionals out there struggle to distinguish them from perks. Your handbook should make that distinction clear. It should also outline what your team members are eligible for across both categories—everything from medical insurance coverage and 401(k) retirement plans to tuition assistance, commuter stipends, and employee discounts.
Whether you list this information as high-level summaries in your small business employee handbook or provide access to the policies themselves is up to you and the reader experience you’re trying to cultivate.
Code of Conduct and Ethics
A small business employee handbook without a code of conduct or ethics is like a vehicle without a battery. It’s still a vehicle, technically. But it just won’t function properly. The same concept applies for employee handbooks. When it comes to behavior, there can’t be any gray areas. Your team members need to know exactly what is expected of them and the consequences for not meeting those standards.
That said, there’s no hard and fast rules for what a code of conduct and ethics needs to look like or communicate. We’ve seen it all over the years:
- Standard conduct policies (harassment, violence, substance abuse)
- Lists of unacceptable behavior
- Conflict of interest explanations and examples
- Ethical decision checklists
- Social media guidelines
- Disciplinary procedures
- Political cartoons
- Case studies and examples
It’s your employee handbook, so you get to make the final call on which policies and elements to include. As long as your conduct and ethics expectations are communicated clearly, you’ve covered your bases. You’ll just need to decide where to place the section within your employee handbook. No worries. We’ll cover that in a little bit …
Conflict Resolution and Grievance Procedures
How does your small business resolve in-house conflicts and grievances? That’s a question your team members are going to want to know. No workplace is immune from conflicts and interpersonal issues, but the best ones have established procedures for handling these situations. Whether it’s a general open door policy or a step-by-step SOP, a distinct conflict resolution policy is an essential component of any well-rounded small business employee handbook.
And while these policies/procedures do vary from company to company—and employee handbook to employee handbook—they should always provide clarity on whom issues should be raised to, timeframes for raising those issues, timeframes for receiving responses from Management, and how the appeals process works. If communicated clearly, your team members will be able to reference your employee handbook going forward to ensure a fair and effective process for addressing and resolving workplace issues.
Employee Training and Development Opportunities
Retaining employees doesn’t just boil down to compensation and benefits. Often, the possibility of advancing their careers at your small business is enough to motivate them and keep them on board long term. If career advancement is a possibility at your small business, you’d do well to mention it early and often in your employee handbook along with the types of training programs and development opportunities you provide.
This is also the perfect place to mention tuition assistance or reimbursement policies, online educational resources, mentor/mentee programs, the number of hours employees can be absent each year for development purposes, and anything else that falls under this umbrella.
Customizing Your Employee Handbook
Like snowflakes and fingerprints, no two small business employee handbooks are the same. Each one has its own unique culture, values, and tailored welcome message to communicate—not to mention endless options for fonts, design styles, and complementary elements (think: emojis, gifs, memes, videos, audio).
And, of course, let’s not forget industry-specific policies. These are crucial for addressing the unique requirements and aspects of your industry (and small business) that will need to be navigated by your team members going forward.
Industry-Specific Policies and Procedures
Different industries require different sets of policies. In fact, you can usually tell what industry an organization operates in just by skimming the table of contents of its employee handbook.
Construction businesses, for instance, tend to spend quite a bit of real estate outlining their safety policies and how they comply with OSHA regulations. These types of businesses are also likely to delve into policies on maintaining company property/equipment and substance abuse in their employee handbooks—given the dangers involved in operating heavy machinery while under the influence. These days, sports businesses—such as sports teams or leagues—are a sure bet to include comprehensive gambling, ethics, and substance abuse policies. They may also list rules for using/selling game tickets, sections on stadium security, and specific rules for social media to prevent blowback on the organization.
Open a law firm’s employee handbook and you’re almost certain to find policies on client/firm confidentiality, billable hours, conflicts of interests, generative artificial intelligence (AI), limitations, file-opening and engagement letter procedures… just to name a few. Software companies are likely to spend chapters on information security. Medical office employee handbooks almost always focus on workplace conduct, insurance provisions, and confidentiality protocols. The list goes on.
It doesn’t matter which industry you work in. As long as you tailor the policies in your small business employee handbook to your industry, you will successfully infuse it with a customized look and feel. Plus, your team members will be confident that their employee handbook has been well thought out and strategized to give them the insights and information they need to thrive in their roles.
Workplace Dress Code & Hygiene Standards
Dress codes reflect the culture and professionalism you’re trying to foster and emanate as a company. These can take the forms of basic guidelines, concepts, and terms or all-encompassing lists of what can and cannot be worn at work.
But it’s not just about slacks, dresses, shirts, and blouses. This is the place in your employee handbook to highlight any rules governing the types of jewelry, tattoos, scents, cosmetics, and accessories that are allowed in your workplace. If roles at your small business require protective personal equipment (PPE) to be worn, you’ll need to include that as well. You’d also do well to mention any hygiene standards your team members will be expected to maintain at your small business—whether it’s daily deodorant applications, beard and nail trimming, or clean clothing requirements.
Paid Time Off (PTO) and Other Leaves
Even your most dedicated team members look forward to their time off, whether it’s vacation time (PTO), paid holidays, or temporary leaves of absence. Time away from work keeps your employees energized, motivated, and productive. It also helps them achieve better balance between their professional and personal lives—a win-win situation for everyone involved.
So why obscure the details of your paid time off and leave of absence policies in your employee handbook? Your team members should understand exactly how much time off they’re entitled to each year, how to request it, and whether anything is required of them while they’re away from work. A well-rounded small business employee handbook lists all of this information in a way that is easy to comprehend and reference, without bogging their readers down in details or legalese.
Federal leaves, such as FMLA and USERRA, apply no matter which state you work in and will need to be included. Other leaves are state specific and will need to be adjusted depending on the state you operate in and the states where your employees reside.
Modernizing Your Handbook
Gone are the days of dense employee handbooks filled with incomprehensible legalese and Latin terms that require law degrees to decipher.
Employee handbooks these days are different. They’re modern and brimming with possibilities—just like your small business! In this section, we’ll go over four strategies and elements we recommend to modernize your employee handbook.
Digitization
Nothing takes the wind out of your employees’ sails quite like asking them to read and sign off on a 100+ page PDF or print-out of your small business’s policies and procedures. Who has the time, patience, or attention span for that in this day and age? In today’s digital era, the creation of an employee handbook should prioritize accessibility. Digitally accessible employee handbooks allow for easy updates and are indispensable for supporting remote or geographically dispersed teams. They’re also eco-friendly and cost-effective, provide an easy way to access and locate policies, allow for link outs to additional information and resources, and are computer, mobile, and tablet-friendly. That’s arguably the most important factor of them all!
Some platforms, like AirMason, even provide the digital capabilities to duplicate and customize employee handbooks for certain employee groups (part time, full time, management, executives) or track the amount of time your team members spend reading them.
Multimedia Components
If a picture is worth a thousand words, what’s a gif worth—or a meme or video, for that matter? For modern employee handbooks, multimedia components are priceless. And that’s simply because they infuse your document with digital elements your team members will recognize, resonate with, and appreciate. It doesn’t matter if your team members are particularly good readers, or if you hired Stephen King to write all of your copy and policies … blocks of text are still blocks of text. They intimidate readers, cause our eyes and minds to wander, and sap the life out of your employee handbook. No bueno. 🙁
Breaking your policies and pages up with multimedia is an extremely effective way to modernize your handbook. Here’s a few things to consider:
- Replace your welcome message with a welcome video
- Embed tutorial videos instead of listing procedures and processes
- Emphasize a concept or policy with a topical gif or meme
- Complement the text with an employee handbook soundtrack
- Include photographs and images of your team members throughout
- Test knowledge retention with interactive subject material quizzes and exercises
In order to incorporate several of these elements, you’ll need to host your employee handbook on a platform with digital multimedia capabilities. AirMason has you covered.
Optimal Ordering
1, 2, 5, 6, 3, 7, 9, 8, 4, 10…
We just threw that series of numbers together off the top of our heads. There’s no rationale or logic behind it—and that’s the problem we see with far too many employee handbooks. If you’re trying to curate an optimal reader experience for your team members, you’ll need to spend some time thinking about how to optimally order your content. Obviously, your welcome message comes first and your conclusion goes last. But what about everything between those two? Ideally, your policies will already be grouped into sections. If not, you’ll need to do that first before you start kicking the tires on ordering your sections. It’s super important.
But you’ll also need to consider at a higher level whether you want to go straight into your policies right away after your welcome note or dive into the elements that define your small business’s culture first. If the former, which policies should lead the way? Administrative information? Your Code of Conduct? Information Technology? Workplace Rules? There is no right way to do it, but remember that you are creating your employee handbook for human beings. And human beings like narratives. They like order, natural transitions, and similar ideas grouped under the same umbrella. Not miscellaneous chaos.
Conversational Tones
The fact that you’ve made it to this point in this guide is proof that conversational tones work. Imagine trying to retain the amount of information we’ve thrown at you so far had we written it in a dry, robotic tone. It would be quite the task. Not only do conversational tones lighten the mood, they also make policies easier to understand. And they resonate with your team members—especially younger ones—because it’s much closer to the way humans actually speak to one another.
How do you make your employee handbook’s tone more conversational?
Try these tricks:
- First-person plural: instead of referring to your small business by name or as The Company throughout your employee handbook, try “we” instead.
- Contractions, contractions, contractions: Instead of “we are”, “cannot”, “it is”, try “we’re”, “can’t”, and “isn’t”. These are small tweaks, but they go a long way!
- Second person, please: Don’t refer to your team members in the third person throughout your employee handbook. Speak to them directly in the second person, using “you” as much as possible.
- Turns of phrase: Your high school English teacher was wrong. Turns of phrase and cliched terms are important for writing if you’re going for a conversational, folksy tone. Try dropping colloquial expressions into your handbook, such as “break the ice”, “drop of a hat”, “elephant in the room”, “hands down”, and “piece of cake.”
- Jokes and puns: Throw a little humor into your copy to lighten the mood. This one is obviously not appropriate for every page of your employee handbook, but it’s a really effective way to lighten the mood and add some brevity to your document. So pick and choose your spots wisely!
A conversational tone might not be right for every business or every employee handbook. It might not even be the best choice for your small business. But if your goal is comprehension, engagement, and getting your team members from start to finish in one go, you should definitely mull it over.
Implementing and Updating Your Employee Handbook
An employee handbook is not a one-time document. Yes, it’s a wonderful resource for team member orientations and onboarding—especially at small businesses. But it shouldn’t be discarded after a single read through. Your team members will be referencing and reviewing these documents throughout their tenures at your small business, so you need to make sure they are up to date and compliant.
By keeping your employee handbook up to date, your small business can effectively communicate expectations, mitigate legal risks, and cultivate a positive work environment. Regular reviews and maintenance of your employee handbook will demonstrate a commitment to transparency and fairness, which should lead to increased employee satisfaction and retention.
Regular Employee Handbook Maintenance
Regulations and laws change all the time, whether it’s at the local, state, or Federal level. And with them, so will your policies. Having outdated policies that reflect antiquated regulations and laws doesn’t do anybody any good. Your team members need to understand their responsibilities, rights, and legal protections—and it is your job as a small business owner or HR rockstar to review your employee handbook regularly to ensure your team members have the correct information.
The old-fashioned method for this was to manually stay on top of updates, whether through Google alerts, legal briefs, or the good old fashioned news! These days, that’s not very practical, given the sheer amount of legislative changes that occur on a daily basis. There’s also the matter of whether you’re interpreting and communicating these legislative and regulatory changes correctly in your employee handbook. Good thing there’s an easier way …
Automatic Policy Updates
Regular employee handbook maintenance and legislative changes are one of the most common pain points HR pros struggle through.
But that’s quickly becoming a thing if the past now that companies, like AirMason, have introduced automatic policy updates (APU). Not only do these services notify your small business anytime a relevant employment law changes, some even send you updated, accurate policies (and high-level summaries) that can be copied and pasted right into your employee handbook. How’s that for convenience?
Employee Acknowledgement
Getting team members to acknowledge and sign off on your employee handbook policy updates is crucial for your small businesses. It protects you legally by proving that your team members have read and understand any new policies/laws.
It also ensures that everyone is on the same page, cutting down on confusion, mistakes, and time lost to both. When signing employee handbook acknowledgments, your team members take personal responsibility for themselves and their future actions. This builds accountability and ownership—two qualities that are super important in small businesses where people often wear many hats.
Help Resources
Even if you make your employee handbook policies as simple as possible, there’s no guarantee your team members are still going to fully understand them. They may have additional questions—and that’s okay! Because you will have the answers they need or be able to direct them to resources that will educate them further.
Take the Zenefits Help Center, for instance. This comprehensive resource hub was designed to assist users with navigating its platform’s features and resolving any issues they may encounter. Within the Zenefits Help Center, users can access step-by-step guides, tutorials, and troubleshooting articles to address common questions and concerns. Whether they’re seeking assistance with onboarding, payroll management, or benefits administration, the Zenefits Help Center provides clear and concise instructions to help you maximize your experience with the platform. Additionally, the Help Center offers a searchable knowledge base and community forums where users can find answers to specific queries and engage with fellow Zenefits users. With its user-friendly interface and extensive support resources, the Zenefits Help Center serves as a valuable tool for both new and experienced users alike.
Summary
Creating a comprehensive employee handbook may seem like a daunting task, but with the right tools and guidance, it can be a rewarding process. Dare we even say fun? Okay, maybe not fun. But certainly easier now that you’ve read this guide.
Remember, a well-crafted small business handbook is not just a list of policies and procedures. It’s a reflection of your company’s values, culture, and commitment to its employees. So make sure you incorporate a few of the things you’ve read about today when crafting your own. It will pave the way for a successful and thriving work environment.
Key Takeaways
- A well-structured employee handbook is essential for small businesses, providing clarity on company values, legal protections, employee benefits, and integrating with the company’s culture while fostering a supportive work environment.
- Employee handbooks should be tailored to specific industries and include details on company-specific policies, dress codes, paid time off, and should be updated regularly to reflect current laws, industry standards, and company practices.
- A digital and modern approach to small business handbooks is a winning formula. Your employees will appreciate the incorporation of multimedia to offset text and conversational tones and word choices to simplify or add energy to the subject matter.
Frequently Asked Questions
What is a business handbook?
A business handbook, also known as an employee handbook, is a document that outlines a company’s policies, procedures, and employee rights and obligations, providing a central reference point for both employees and the employer. It helps maintain consistency in enforcing policies and addressing employee questions and issues.
Do small businesses need an employee handbook?
Yes, small businesses should have an employee handbook to communicate policies, procedures, and legal rights to their employees. This document helps streamline communication and sets clear expectations for everyone involved.
How to write an employee handbook?
Strategize first, then write. Make it modern with conversational tones, digital and multimedia components, and an intuitive ordering of your policies. Include industry-specific policies and ones that address topical issues trending in the news and on social media. Customize it for your industry, your team members, and your small business’s culture.
How can company values be incorporated into the handbook?
Incorporate company values into the handbook by using them as headings, themes, or keywords, and including stories, examples, or quotes that demonstrate these values in action. This will make the values tangible for employees.
What is the importance of a dress code policy in the handbook?
A dress code policy is important because it reflects the company’s culture and sets expectations for employee attire, grooming, and hygiene.
