Building an Employee Handbook: Top Things You Must Have

November 4, 2020
Building an Employee Handbook: Top Things You Must Have
An effective employee handbook gives your HR team a chance to introduce company culture, share policies and key procedures, and communicate expectations with a new employee. It can also remind current employees of what to expect as a member of the company. But much like writing any comprehensive document, creating a staff handbook can be daunting. Sometimes, HR leaders struggle with how to create an employee handbook, how long the staff handbook should be, and whether or not it’s worth the price to outsource the task. Building an employee handbook at your company? Here’s what you need to know.

What should you include in an employee handbook?

Your staff handbook should be a mix of company backstory/information (think history, company values, mission, and vibe), legally mandated policies (like equal opportunity employment), HR and employment information (PTO and employee classification), and company policies (social media use, for example).

Introduction

Provide your company’s backstory and talk about what you’re most excited to accomplish moving forward. Welcome employees to your organization and let them know who you are and what you stand for. Share your company’s values and mission, and explain how employees should use the handbook. Provide your company’s backstory and talk about what you’re most excited to accomplish moving forward. Introduce company leadership and share your organizational structure or chart.
Your introduction should reflect your brand.
For current team members and new hires, this description should give them a feel for what it's like to be a part of the organization. Even the employee manual writing style — formal versus casual — will set expectations. It doesn't have to be long. But your introduction should reflect your brand.

Housekeeping information

Share at-will employment policies and discuss employee classifications. In particular, it's important to highlight the difference between nonexempt and exempt employees since this categorization will impact other material in the staff handbook. Communicate your progressive disciplinary action procedures, and be sure to clearly spell out prohibited behaviors — like coming to work inebriated or sexual harassment. Explain how payroll, performance reviews, and department transfers work.

Code of conduct

Establish expectations for employee behavior in your staff manual. Share your org’s zero-tolerance policies on workplace bullying, violence, and harassment. Outline policies for social media and internet use and include information on company hours and expectations for communication. Discuss remote work policies and how your organization’s procedures will change in the case of a public health emergency or natural disaster.

Benefits

Give employees an overview of the various employee benefits they’re entitled to as part of the company. Share information on paid time off, vacation accrual, and holidays. Discuss the various leaves of absence employees are entitled to — like sick, disability, personal, bereavement, and family medical. Summarize health insurance, life insurance, employee assistance programs (EAPs), and retirement plans, and let employees know where they can find more detailed information on these offerings.

Legally mandated policies

By law, employers must notify eligible employees of certain policies like the Family Medical Leave Act (FMLA), Equal Opportunity Employment, Title VII of the Civil Rights Act, Title I of the Americans with Disabilities Act (ADA), and workplace safety provisions by the Occupational Safety and Health Administration (OSHA). Incorporate these into the appropriate sections above — like in the introduction, code of conduct, or benefits — or group them in a section on their own. Make sure you’re covering city and state-specific mandated policies in addition to federal ones.

Employee acknowledgments

Technically, this shouldn't be in your employee manual but given along with it to a new employee. Collect signed acknowledgments from employees stating they’ve received and read the handbook. This step ensures that employees understand they’re responsible for the content of the handbook, full stop, and could be helpful in case of a legal dispute. Store the signed acknowledgment securely in their employee file. Companies are as diverse as the individual working for them. This list is a good starting point, but feel free to add sections we’ve missed or toss ones that aren’t applicable.

How do you create an HR handbook?

Good news, you’ve got options. Create your HR employee handbook in-house, hire a firm, or work with a consultant or freelancer. You can also use an online legal resource, and if you work with a Professional Employer Organization (PEO), they likely provide this service.

Online templates

There are lots of them. Compare a few employee handbook templates to ensure your choice is comprehensive in what it covers. Double-check for any amendments you need to make, like industry-specific or state-mandated policies that may not be included. Ideally, you'll want to pass your finished staff handbook to your legal department or consultant to ensure every mandatory legal requirement is included.

Hire an HR firm or agency

If you're a business owner who wants a tailored employee handbook and concierge-level service, consider hiring an HR consultancy. These experts will write a handbook that covers the specific needs of your business and place(s) of operations but that also reflects your company culture and values. The only hitch? With a price tag of a few thousand dollars, outside firms are the priciest option. And, again, just because a specialist wrote your employee manual, that doesn't mean it's perfect. Your legal counsel should review it, too.

Write it yourself

Borrow inspiration from companies who’ve nailed their handbook, and cross-check with a compliance checklist to ensure you’ve included required policies. You know, the old-fashioned way. Writing your own employee handbook gives you a chance to personalize it to reflect your org’s values at every level. If you’re a retailer that values diversity, equity, and inclusion, include your commitment to the 15% pledge in the handbook. Writing and updating your own handbook also ensures that your workplace policies align with your mission statement and overall company needs. And you're always on top of what's needed since you can edit your handbook as your company changes.

Use an online tool

Every company needs an employee handbook to build a great culture and help their people get onboarded quickly.

How much does an employee handbook cost?

The cost varies widely based on the type of HR department outsourcing, the number of employees, and if specific compliance information is needed.

Online templates

HR leaders can find lots of templates online. Be sure to review these carefully, as they can be dated or just plain boring. Expect to pay between $0-$500 for an online template.

HR consultants and consultancy firms

Consultants are pricier. You could pay between $1,500-$5,000 for a personalized employee handbook developed by an HR firm. The price depends on factors such as the number of employees, number of locations, industry, and state-specific employment laws that may or may not need to be included.

Create in-house + legal review

Have your HR team tackle the employee handbook in-house and have the final document reviewed by the company’s legal counsel. Or use an online review service, like LegalZoom. A legal review of an employee handbook typically costs a few hundred dollars.

Hire a contractor or freelancer

Get help from a freelancer with HR expertise to get personalized help at a fraction of a consultancy firm’s cost. Professional HR freelancers can run between $100-$500 per hour, depending on their experience, location, credentials, and expertise.

How many pages should an employee handbook be?

Being concise is hard. But creating a rambling, verbose handbook with explanations and information in multiple places leads to confusion. Instead, get organized. Set aside time to write HR policies if you haven’t already articulated them on paper. Write clearly and use subheads to break up information. Be comprehensive, but try to keep the handbook to 50 pages at most.

How to create an employee handbook manually

Decided to tackle it yourself? Kudos to you! Here’s what you need to know.

Determine each company policy + procedure

Think about how you’ll handle working hours, diversity, equity, and inclusion efforts, dress code, emergency situations, social media usage, and the employee onboarding process. If you haven’t transcribed company policies and procedures yet, start here. Some policies are legally mandated, but others are company-specific. Think about how you’ll handle working hours, diversity, equity, and inclusion efforts, dress code, emergency situations, social media usage, and onboarding.

Start with an outline

Outlines help you organize. Make a roadmap of what you’ll cover and how you’ll structure it to keep the handbook from getting too long or unruly. An outline will make the writing process go more smoothly for you and your human resources team, but it will also produce a more logically structured handbook for employees to use.

Make it easy to use

Make the information in your employee handbook easy to find. You’ll want lots of headers and subheads, and bulleted information will be your friend, too. Include a table of contents with links to specific sections. Give employees a pro tip of using Ctrl + F to search for specific keywords, like vacation policies.

Consider form

The way you organize, share, and store your employee handbook is important and speaks to your company’s cultures and values, too. Consider alternatives to traditional PDFs, like scrollable docs hosted online.

Get the legal department’s OK

Send your employee handbook to the legal department or seek outside counsel’s help before sharing the handbook with employees. When done correctly, employee handbooks help keep your business compliant and provide a measure of legal protection.
A final review and approval by a legal professional ensures you’re adding a layer of protection, not creating additional liability.
A final review and approval by a legal professional ensures you’re adding a layer of protection, not creating additional liability.

Sound human

Avoid the stuffy legalese of employment contracts. Handbooks help educate employees and provide a single place with lots of answers. Write in plain language. You want employees to read and use the employee handbook — heck, maybe they’ll even enjoy it.

What shouldn’t be included in an employee handbook?

A handbook is not an employment contract. Avoid getting too specific with topics like high-level performance issue escalation, confidentiality clauses, and severance pay for terminated employees. Give short overviews of complicated topics, like health insurance benefits and policy, but do provide a link or contact to access more detailed information. Avoid including specific information on accommodations since the reasonable accommodations mandated by the Americans With Disabilities Act will be handled individually anyway.

The importance of employee handbooks

Your employee handbook will be the single most important document employees and independent contractors receive. It sets your new employee's expectations about the business culture and how their time will be. It will also provide a clear roadmap and reference regarding essential procedures. It’s a guide to usher team members through onboarding, answer FAQs about the employee experience, and share who you are and what you stand for as a company. Be thoughtful and professional, but don’t be afraid to have some fun. At the same time, an effective employee handbook is more than an essential part of the onboarding process. Not only does it state the company's mission and requirements, but it provides critical documentation to assist your legal team in the event of a lawsuit. Many states leave certain employee policies up to the employer, and in court, employers can use an employee handbook to clarify organization-specific processes.
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