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As an experienced and seasoned HR professional, you can rest assured that I have seen almost everything. As much as we would all love to believe that all employees and management have the best intentions, that just simply isn’t the case. Having a set document of guidelines, policies, and benefit information serves as a safety net for both you and your employees. As a small and medium sized business owner, how you spend your time and how your management team spends their time is crucial to the success of your company. Communication between employees and ownership/management is required to create productivity and desired results. By utilizing a uniformed document to communicate with your team, you will drive these results – it is an investment that is well worth it.

There are several reasons, other than saving time, that you need an employee handbook. While this list is not all inclusive, it does serve to outline the most relevant reasons why making the investment for an employee handbook will help your company and your employees succeed both short and long-term.

Reason 1: The Legal Side

Is it illegal to not have an employee handbook? The short answer is no. However, Human Resources is best utilized as a preventative measure. This entails having policies and guidelines in place PRIOR to an unfortunate event or issue occurring. Just like you pay for business insurance, car insurance, or any kind of insurance – think of an Employee Handbook as a form of insurance for the boundaries and requirements of employment.

There are several laws that need to, at some point, be disclosed and acknowledged by employees. The best way to do this is to have them included in the Employee Handbook, and to utilize their acknowledgement of the handbook for all of them. For example – ADA, Genetic Information, Non-disclosure, ant-harassment, drug testing, Equal Opportunity, Confidentiality, and Personal Data Privacy disclosures and policies are all examples that can and should be included in an employee handbook.

Without an employee handbook, there is an element of risk and exposure that you create for your company and for your employees. For example, at-will employment decisions, confidentiality, non-disclosure and explanations of employee benefits are the most common legally pursued topics by both employers and employees. To avoid the risk of false promises, misunderstanding, or miscommunication – these topics should be well described and clarified within the Employee Handbook.

Reason 2: Employee Culture

Employee culture is one of the most broad, but also specific, topics within the realm of human resources and management in general. The culture of a workplace includes the atmosphere, the attention to detail, the mentorship approach, the ethics, the diversity, the communication, and the overall expectations from employees and from management.

Cookie-cutter Employee Handbooks are going to miss a key component that attributes to the success of the document itself and the guidelines in entails – and that is the consideration of your company culture. There are several different types of cultures, none of which are all-inclusive or even cookie cutter themselves.

For example, an organization that has a more laid back, employee focused culture, it may have an unlimited PTO policy with a few clauses. Others that are more structured and top down focused, may have an accrual based PTO policy. Either policy type is beneficial to the employee and the employer, but need to be taken into account for if they are complimentary of the company culture. Another example may be a cell-phone or electronic device policy. Some company cultures may not feel that any usage of personal electronic devices within working hours is acceptable, while others may permit the usage of personal electronic devices as long as they are not a distraction to others. Whichever workplace culture you are trying to implement or maintain, it is important that your handbook directly reflects it.

Reason 3: Employee Benefits

As stated earlier, the misunderstanding or miscommunication of employee benefits is one of the most common legally pursued employment law topics. False promises, failure to deliver promised benefits, or failure to clarify benefits for employees are all concerns that can be prevented by including a detailed section on Employee Benefits within your Employee Handbook. This section should include any legal disclosures, such as COBRA, Summary Plan Document Notifications, HIPPA, Military Leave, and Changes in Family Status. As well as include generalized information on when the employee is eligible for benefits, how employee contributions for benefits are paid, when annual enrollment is, and what benefits are included (such as Medical, Dental, Vision, 401(k), Short or Long Term Disability, and Supplemental Plans).

Reason 4: Expectations

Employee Dress Code, Attendance, Expense Reimbursement, Harassment, Conflicts of Interest, Solicitation, Phone or Electronic Usage, Performance Reviews, Social Media, etc. – are all examples of expectation policies that should be included in your employee handbook. By setting these expectations for employees and for your management team, you create the opportunity to define success and to define failure. All of these policies are a form of communication on what you expect from your employees and what they can expect from you as their employer. Failure to abide by these stated and acknowledged policies also gives the resources for accountability if the need presents itself.

“Clear expectations = Clear path for success”

Reason 5: Communication

Last, but certainly not least, communication. As stated in the very first paragraph of this post, communication between employees and ownership/management is required to create productivity and desired results. Many questions that both employees and management may have about policies, benefits, or expectations will be answer within the Employee Handbook. This allows for less confused inquiries to ownership and management by providing the ultimate tool to answer the most common employment questions for your company.

How often do I update our Employee Handbook?

There is no direct answer for this, however, as an HR professional, I recommend reviewing your company handbook quarterly for culture and policy updated and as needed for regulatory and compliance updates as laws are updated and enforced. It is important for your Employee Handbook to, at minimally, be thoroughly updated annually. Having an HR source automatically update your Handbook as regulatory changes occur will save you time and keep you in compliance.

Best practice is to inform your employees of any updates as they are released, and to have all employees re-acknowledge the employee handbook annually after any major review modifications. All employees must have access to an updated handbook, whether electronic or physical for their reference.


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