HR Policies for SMEs: Creating an Employee Handbook


HR Policies for SMEs: Creating an Employee Handbook

It goes by many names: a staff handbook, an employee guide, a policies and procedures manual. But does your business really need one? And if so, what should a good one look like?

An employee handbook is made up of a range of HR Policies and Procedures, and a HR Policy:

  • Sets out how the Organisation intends to address issues related to employee relations;
  • Puts in place best practice procedures for compliance with the law
  • Provides guidance on how to behave or operate in a given situation and prevents misunderstandings;

What is the Difference Between a Handbook and a Contract?

Firstly, it’s important to dispel the myth that you already have this stuff covered off if each member of your team has an employment contract.

A handbook not only covers more than just the legal rights of employees and your obligations as their employer but can also include recommended behaviours and practices that aren’t enforceable by law – like your own corporate guidelines. And when they’re in a handbook or manual, they apply to all employees, usually bound by an agreement within their individual contract, and you have the flexibility to update the handbook without their written consent.

Does my Business Need an Employee Handbook?

The answer is nearly always “yes, you do.”

Why? Because it’s simply good business practice to have one. But more so, an employee handbook provides some very tangible benefits to your operations and workplace culture. It creates a clear introduction for new recruits and lets them know that everyone works to the same, fair, level playing field. It gives them a guide for things like booking leave or health and safety advice.

Most critically, the policies and procedures within the handbook will help you when faced with employee disputes or legal action. Obviously, prevention is better than cure and so the biggest selling point for putting the work into crafting a good employee handbook is that it mitigates the risk of employee misconduct and discontent in the first place.

What Does a Great Employee Handbook Do?

  • Improves working relationships
  • Provides a structure for dealing with problems
  • Everyone knows where they stand
  • Business relationships can be supported by HR Policies

It’s a good idea to involve your business team and any stakeholders in this stage. Use the employee handbook as a place to communicate your mission, vision and values. Test that it’s written in plain English, jargon-free and that you have processes in place to ensure it is communicated out to every new starter.

While going through this process, try to remember that the point of the handbook isn’t just about fiercely defending your business from unscrupulous former employees. This manual is an opportunity to set out your stall in terms of workplace culture and business ethos. So, positive language must be used throughout.

What Employment Policies Should be Business Consider?

First up you can look to the essential policies and procedures by law and decide which fit within your employment contracts and which would work better by being included in a more general employee handbook. These usually include things like:

  • Annual leave and public holidays
  • Statutory flexible working arrangements (UK)
  • Policies for overtime and time off in lieu
  • Salary and pension payment information
  • Statutory retirement rules.

Then there are certain policies that are vital for your business regardless of the size or industry that don’t naturally fit as part of an employee’s contract of employment. You should check the labour relations and employment advice for what applies in your jurisdiction, but as a general rule you’ll want to include policies and procedures for:

  • Recruitment and selection
  • Equal opportunities
  • Dignity at work (including bullying, harassment and sexual harassment)
  • Discipline and grievance issues (including gross misconduct)
  • Unauthorised absences
  • Health and Safety

Now once you’ve covered the must-haves, there are just a few more best practices and legally advised policies to include in your employee handbook. These focus on elements like:

  • Induction information
  • A performance policy and appraisal procedure
  • A training policy
  • A redundancy policy
  • A diversity policy
  • A data protection policy
  • A social media or digital policy (covering all internet, mobile phone use, etc.)
  • A child/vulnerable adult policy
  • Financial procedures for claiming expenses
  • Whistle-blowing guidelines
  • A special leave policy
  • A career break policy
  • Risk management guidelines
  • A volunteering policy

HR policies are drawn from current employment legislation. They provide managers and staff members with information and guidance relating to their employment. They also provide a framework for compliance with employment law.

In the absence of a Handbook, staff members may become resentful if issues are not addressed appropriately. As there may be no mechanisms to resolve problems it can lead to difficult interpersonal relationships within the team. In a worst-case scenario, staff members may make a claim against the organisation.

It may seem like a big job – and it can be, the very first time you create your employee handbook from scratch – but bear in mind that it will never require so much work again, as you’ll merely update it and allow it to grow with you as your business grows. It’s also a lot less resource consuming than dealing with the consequences of not having a strong team documentation.

Still not sure where to start?

We’ve got it covered. There is support and guidance available for even the smallest of start-ups and businesses with services like FordeCloud. We have devised industry standard HR Documents for SMEs and update them regularly to ensure your business is always in good hands. We also provide software for time and attendance management and support you through employee resolution issues, as well as more general on demand HR support.