I know, not the most exciting topic in the world, right? In fact, thinking about your existent (or non-existent) employee handbook might also fill you with apprehension, angst, or dread.
Since we are human, we put off doing the things that are not exciting to us. Maybe you haven’t yet taken the time to write an employee handbook. Or, if you were ambitious enough to put one together, then you probably considered the task “done” and haven’t updated it in years. Although it might not be exciting to you, having an up-to-date and meaningful employee handbook is not only “nice to have,” it’s necessary. Even if you are a small business, you need an employee handbook in place if you have any employees at all.
Here are the three most important reasons to create or update your employee handbook today.
1) Welcome employees to your organization
Employees have a choice of where they work. If you’ve selected and hired them, then you think they are the right fit for your organization and you are excited about what they bring to your business. Orientation and Onboarding Processes are very important to reassure new hires that they made the right decision. The employee handbook should be part of the Orientation and Onboarding Process. This will help set the stage for their employment for years to come. The handbook should look professional and contain a welcome statement from the business owner. In addition, you can introduce them to the culture and values that your company holds important. If you have a Mission and/or Vision Statement, this is a good place to share that with employees.
2) Solidify your policies and procedures
The process of creating an employee handbook, or updating your existing one, requires you to think about the policies and procedures that you want your employees to follow. Without going through this process, you can easily fall into the trap of making decisions on the fly. The problem with this is that you may end up being inconsistent across a span of time or across employees. If you don’t have a stated policy about how much time off an employee is entitled to during the year and whether or not that time off is paid or unpaid, for example, similar requests may end up being handled differently.
Suppose that Sally has been an employee for six months and she requests two weeks off for her wedding. Because she’s a good employee and you think this is a valid reason to miss work, you grant her paid time off. Joe has been an employee for over a year and he requests two weeks off for a deer hunting trip. You decide to grant him only one week of unpaid time off due to his frequent absences and because you disagree with hunting as a sport. If Joe, or another of your employees, knew that Sally’s request had been granted entirely and paid, and Joe’s request had been treated differently, you could end up with a complaint or grievance. This could lead to hard feelings from employees, a lawsuit, or a potential investigation by the U.S. Equal Employment Opportunity Commission.
Think about what benefits you wish to offer to employees, which categories of employees (full-time, part-time, seasonal, etc.) you want the benefits to apply to, what your policy is for time away from work, and anything else that is important to your specific industry and the job functions that your employees will be fulfilling. When finalizing your policies and procedures, try not to think of specific employees that you want to include or exclude in the policies or specific situations that only exist today; keep the policies as “faceless” as possible. Instead, try to think globally about the kind of employer that you want to be.
3) Eliminate confusion
Unclear company policies and procedures are confusing. They can also cause unnecessary stress on the job, both for the employer and the employee. It is easy to think that “everyone should know.” But, in fact, some people may not. As an employer, don’t assume that what you have in your head is clear to the employee. Otherwise, you may end up thinking that they are just being disrespectful or deliberately disobeying you when, from their perspective, they aren’t.
As your business grows and changes, new issues will continue to come up that you didn’t have before. Therefore, it’s important to update your employee handbook to address those issues. For example, if your office or the job site was always in the location where your employees lived, it wouldn’t be necessary to consider paying mileage or drive time. However, if you relocated to a new office building or a new job site that is not in the same city as the employees, it would be important to decide how to handle mileage or drive time reimbursement.
Also, remember that most employees have probably worked somewhere else before they came to you. Their former employee may have handled something one way and you handle it a different way. To avoid confusion for the employee, clearly explain what your policy is and the reasons behind.
Employees that feel confused may become frustrated. Confusion and frustration can affect their job performance, or even cause them to start looking for a different job. You invested time and money to find them, hire them, and train them. Don’t risk losing them over simple confusion which can be avoided with documented policies and procedures! Employee turnover is costly and time consuming. It has been estimated that it costs an average of one-third of a new hire’s yearly salary to replace them. Therefore, even with a minimum wage employee, your cost to replace them is over $6,500. With higher wage employees, the cost of turnover is even greater.
As the old saying goes, it’s always better to be safe than sorry. Taking the time now to update your employee handbook could save you time and money in the future. If the thought of taking on this task is overwhelming, contact us at Multi Business Solutions for help. We can review what you have currently and offer suggestions. Or, we start from scratch and write your entire employee handbook for you!