Employee Handbook - The Most Handy Solution For Happy Employees

An employee handbook is the Holy Grail of your company. It contains everything about everything that anybody might need to know about working within your organization. It’s your company’s “Don’t Panic” document.

If you are here, reading this article, it means you are looking for ways to improve your workforce experience, starting with the onboarding process until the termination of your collaboration.

You can make your employees happier and more productive with just one simple solution: the employee handbook. So, unless you already have one, you are your business’s sole employee – or you’re running a small family business – you need an employee handbook.

An employee handbook is a valuable communication resource for both the employer and the employee. It provides guidance and information related to the organization's history, mission, values, policies, procedures, and benefits in a written format. It is also viewed as a means of protecting the employer against discrimination or unfair treatment claims. It is an easily accessible guide to the company's policies, practices, and an overview of management’s expectations. In contrast, a policy is a written statement that reflects the employer's standards and objectives relating to various employee activities and employment-related matters.

Having a well-written employee handbook (and the newer, cooler “culture code”) can also be a wonderful recruitment and retention tool for employees to learn the company’s mission, values, and norms.

Whether you have an employee handbook that needs improvements or you want to create one, this article gives you everything you need to create a great one and employee handbook template.

Table of contents

  • What is an employee handbook?
  • How to write an employee handbook?
  • Why do you need an employee handbook?
  • What should a comprehensive employee handbook include?
  • Employee handbook example  

What is an employee handbook?

An employee handbook is a compilation of the policies, procedures, working conditions, and behavioral expectations that guide employee actions in a particular workplace. It is an end-to-end resource that allows your employees to gain a true understanding of what it means to belong to your organization.

A comprehensive employee handbook serves two key purposes:

  • it explains to your employees what’s expected of them regarding their workplace conduct and their approach to the job. By making your expectations clear from the start, you will make it that much easier for your team to live up to these expectations;
  • it sets your employee’s expectations regarding what it will be like to work within your organization. Again, rather than leaving this information “up in the air,” your handbook spells it all out - allowing your employees and your managerial staff to remain on the same page at all times.

Typically, your handbook will cover the following areas (read more about them in chapter 4: What  should a comprehensive employee handbook include?):

  • General Employment Information: the organization’s policies, rules, and other procedural directions and instructions.
  • Cultural Information: the mission and vision statements may also include information about the company’s personnel (e.g., biographies, etc.).
  • Case-Specific Information: legal and regulatory information as necessary. In some instances, this may mean providing specific directives for employees to follow before, during, or after particular events or occurrences.


How to write an employee handbook?

Step #1: Gather and keep current essential company information

Make sure you have the basics covered: about the company, values, policies, onboarding information, and key contacts. You will also want to review and make required updates to company policies. The topics included in the employee handbook should cover the employer's mission statement, equal employment opportunity statement, contractual disclaimer, the purpose of the employee handbook, and background information on the company.

Step #2: Think big about your company

Where are you? Where are you heading? Your mission, vision, and values are your company’s core and can help motivate existing employees and new hires. Gather your leadership together and make sure your employee handbook reflects your organization’s culture.

Step #3: Brainstorm on what to include in the employee handbook

Get inspiration from other handbooks, review templates and examples to group ideas for your employee handbook. The employee handbook should include a statement that summarizes each policy and procedure. You should write the statements in easy-to-understand language, and they should speak to the employee audience.

Step #4: Loop in stakeholders

Once you have a list of key points to cover, it’s time to bring in the experts. You will want to document your employer policies carefully and provide time for a thorough legal review. Save time by assigning appropriate sections, like the company’s history, mission, and vision, to Marketing, state laws that affect employees to Legal, wages and compensations to Payroll, etc.  

Step #5: Outline each section of your handbook 

Make a note of the critical policies to include, like anti-harassment, workers’ compensation, and required legal disclosures. Include the policies relevant to new hires, like employee benefits, work hours, PTO, sick leave, substance abuse, a code of conduct, and other expectations. Once HR has completed the employee handbook outline, the next step is to write the organization's position, rules, or policies under each of the outline topics.

Step #6: Provide finalized version to legal counsel for review

Employers use the policies in an employee handbook to protect themselves from lawsuits, such as harassment claims, wrongful employment termination claims, and discrimination claims. By reviewing the final version, legal counsel will ensure that it contains no statements that may create contractual agreements.

Step #7: Select a means of publication

Organizations can seek a request for proposals from a few select vendors. Once the vendor is selected, the employer should work with the vendor through each step in the publishing process, including formatting the handbook to a specific size and style. Once the formatting is complete, a final review and approval should occur before printing the manual.

Step #8: Distribute the handbook to the employees

Some employers use their intranet or internal email to post the handbook electronically; however, physical copies need to be made available to new-hire employees, those without access to the Internet, or at the request of an employee. Posting the employee handbook on the company intranet or via e-mail is also useful when changes to policies are made and need to be communicated to employees.


Why do companies nowadays need an employee handbook?

If you haven’t devoted the time to writing and designing an employee handbook yet - don’t feel bad; you’re likely not the only one. New and small businesses in particular often neglect to produce an employee handbook. But as your company grows, it’s helpful to create a central space for all of your processes and policies to live early on.

The handbook gives employees a detailed overview of policies specific to your organization along with other key procedures, guidelines, and benefits. In a nutshell, it sets clear expectations for your employees while also stating your legal obligations and defining employee rights. The employee handbook protects your business against employee lawsuits and claims.

Organizations without a documented handbook in place will likely face a much larger number of disputes and incidents. Unfortunately, such disputes are often a massive waste of working hours and resources: 85% of employees experience conflict to some degree, spending 2.8 hours per week dealing with it, costing $359 billion in paid hours annually in the US alone.

Employee handbooks are incredibly effective in maintaining a positive workplace culture and integrating newcomers into the team.

A handbook smooths out the onboarding process

Starting a new position in a new company can be overwhelming, with lots of new faces, information, and policies to learn.

But providing your new hires with an employee handbook early on in their employment (think: the first day) is a great way to ensure that the employee has all of the necessary information and has a resource to constantly refer back to if they have any questions. Companies that put effort into making the onboarding process go smoothly are more likely to retain new hires for longer periods.

Consider creating a handbook that is less traditional than the thick word-heavy handbooks of the past. Make yours interactive, with quizzes or images to break up the information and make it easier to digest for new hires. You could also create a digital version that employees can access anywhere and even search for what they need.

The employee handbook communicates corporate culture

A dynamic company culture that supports and keeps your employees engaged is highly essential, so it’s vital to clearly define your company mission, expectations, and work environment in your handbook.

If you don’t yet have a strong company culture, create one.

Focus on the proven staples of a solid corporate culture: physical health, emotional wellbeing, mental clarity, and spiritual significance. Having an exciting workplace culture doesn’t have to cost you anything.

It is your workforce go-to resource

What is your company’s policy about working from home or remote work? What are the company procedures for making a complaint? Your employee handbook should be an accessible resource to help any employee find answers to their questions, identify a point of contact for an issue, or provide clarity around what’s expected from them.

Additionally, your handbook is your opportunity to put the rules in black and white. If you have an employee consistently late for work, point to the work hours clearly listed in the handbook and warn them if previous attempts have been ignored. If such situations repeat, then you might have to send a disciplinary note.

The condensed version of the manual contains must-know details at the beginning of the book for new hires.  Additionally, add further information ranging from employee benefits to dress code to leave policies so that your staff’s questions are quickly answered. In this way, you will not bother your HR manager every time they have a question.

A comprehensive handbook reinforces your employee morale

Employee morale and engagement go hand in hand. When your employees feel appreciated, they work harder, and the overall mood fosters a sense of community and collaboration. Communication is the cornerstone to positive morale: the more your company communicates the fact that every employee is a valued member of the team, the more they will feel that way.

Your handbook is the best place to disseminate that message from the start

Remember your audience when writing your employee handbook. You are writing it to address each employee, so use conversational language, not legal lingo. Have a handful of diverse employees read and critique the handbook so that you ensure that you’re speaking to staff at every experience level, age, and education background.

Your handbook is here to maintain legal compliance

Your employee handbook will also increase your team’s ability to stay in compliance with the various laws and regulations that apply to your business.

With the cost of non-compliance being more than twice the cost of maintaining compliance, this extra effort can go a long way in terms of keeping the costs to a minimum. Having a documented handbook will always leverage not having one.


What should a comprehensive employee handbook include?

Employee handbooks are truly an adventure - no one size fits all scenarios. Though the information included in every employee handbook fits into a set of common categories, the depth that companies will go into within each category depends on various factors such as company size, industry, location(s), culture, etc.

See below for examples of what to include in your employee handbook. Feel free to pick, choose, and adapt the topics that are most relevant to your business.


Employee handbook example

Your employee handbook is likely one of the most extended documents you’ll create, and while it is important to include a lot of information, it is also important to make sure you don’t waffle on. Keep your paragraphs short and concise, use simple language, include drawings and pictures.

Below is a sample outline, or Table of Contents, for items that are typically included in an employee handbook:

Welcome Message to New Employees and Recognition of Current Employees

  • Company Mission Statement
  • Equal Opportunity Statement
  • Contractual Disclaimer and At-Will Statement
  • Purpose of the Employee Handbook
  • Background Information on the Company
  • Orientation

Policies and Procedures

  • Standard of Conduct
  • Personal Safety
  • Sexual Harassment
  • Drug and Alcohol
  • Violence 
  • Attendance
  • Hours of Work
  • Meal and Rest Periods
  • Overtime
  • Timekeeping
  • Personnel Records
  • Paydays
  • Payroll Deductions
  • Performance Reviews
  • Promotions
  • Transfers
  • Termination: Reduction in Force, Layoff/ Recall
  • Bulletin Boards
  • Telephone/E-mail/Internet Use
  • Social Media
  • Exit Process

Benefits

  • Holidays
  • Vacation
  • Sick Leave
  • Personal Leave
  • Bereavement Leave
  • Family and Medical Leave
  • Paid Time Off
  • Health/Life Insurance
  • Retirement and Pension Plans
  • Training
  • Workers' Compensation
  • Unemployment Insurance

Employee and Employer Responsibility for Safety

  • The Commitment of the Company
  • Emergency Procedures
  • Medical Services
  • Personal Protective Equipment
  • Safety Rules, Reporting Accidents

Summary and Acknowledgment

  • The Importance of the Policies and Procedures
  • Acknowledgment of Receipt


Download a word document that will start you on your quest to create an employee handbook.

Ready to get started?

Whether your organization is made up of ten employees or ten thousand, creating an employee handbook is a key step in the process of systematizing and standardizing your operations.

Of course, it takes time, energy, and other resources to make it happen. But, as we said earlier, the cost of not creating a handbook can potentially be devastating to your business. Without proper policies and procedures in place, even the smallest bump in the road can derail your operations and hinder your team’s ability to continue pressing forward. That said, if you don’t currently have a documented handbook in place, the time to get started is now. Once you’ve created your handbook, you must keep this information top-of-mind for your employees at all times. All it takes to make happy employees is to keep them at the center of everything you do.

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