Employee Handbook. I know, not the most exciting words in the world, right? In fact, not only are they not exciting words, but they 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, which means you have probably either not taken the time to write an employee handbook. If you were ambitious enough to put one together, then you probably considered the task “done” and you 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, if you have any employees at all, it is necessary for you to get an employee handbook in place.
Although there are lots of reasons why you should create (or update) your employee handbook, here are 3 of the most important reasons why you should do it today:
1) Welcome employees to your organization
Employees have a choice of where they work and if you’ve selected them 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. The Orientation and Onboarding Process are very important to reassure new hires that they made the right decision, and to help set the stage for their employment, for years to come. The employee handbook should be part of the Orientation and Onboarding Process and should look professional, contain a welcome statement from the business owner, and 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 as well.
2) Solidify your policies and procedures
Going through 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 the act of going through this process, you can easily fall into the trap of making decisions on the fly that end up being inconsistent across a span of time or across employees. For example, 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, similar requests could be handled differently. This could lead to hard feelings from employees, a lawsuit, or a potential investigation by the U.S. Equal Employment Opportunity Commission.
For example, Sally has been an employee for 6 months and she requests two weeks off for her wedding. You grant her request and pay her for time off because she’s a good employee and you believe this to be a valid reason to miss work. Joe has been an employee for over a year and he requests two weeks off for a deer hunting trip. You 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.
You need to think about what benefits you can 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, but try to think globally about the kind of employer that you want to be and keep the policies as “faceless” as possible.
3) Eliminate confusion
Unclear company policies and procedures can be confusing and can cause unnecessary stress on the job, both for the employer and the employee. It is easy to think that “everyone should know” when in fact, some people may not. As an employer, don’t assume that what you have in your head is clear to the employee and they are just being disrespectful or deliberately disobeying you.
As your business grows and changes, new issues can also come up that you didn’t have before and it’s important that you 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 have been 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 employee, 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 and it might have been handled one way at their former employer, and now you are handling it differently. This might cause confusion for the employee if you have not clearly explained what your policy is and the reasons behind it.
Employees that feel confused can become frustrated, which can affect their job performance, or even cause them to start looking for a different job. With the time you spent to find them, hire them, and train them, you don’t want to 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.
Although we’ve provided three good reasons to update your employee handbook, there are many more reasons that have not been discussed. 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 start from scratch and write your entire employee handbook for you.