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Essential HR policies for small businesses

HR policies provide your business with the guidelines to tackle all important personnel-related events and issues. These written policies offer a blueprint for both employers and managers to implement the organisation’s human resources strategy.

Examples of HR policies include what to do if a colleague falls sick for a long time, what to do when an employee steals company information, what clothes employees should be expected to wear, how they should file expenses, etc. In any of these situations both and your employees are going to want an existing set of procedures to guide decision-making. Any of the above can or will occur, so it is best to be fully prepared.

As well as allowing the business leaders to do the right thing, HR policies provide consistency and transparency for employees and managers alike. By existing in a written format and being present in everyone’s contract or employee handbook, HR policies serve as a point of reference as to how the company implements its rules. Well-worded and fairly enforced, these policies reinforce a positive organisational culture and solidify the psychological contract that exists between employer and employee.

On top of these benefits, the pitfalls to not having solid human resources policies in place can be fatal. A lack of legal compliance can see you met with court dates and hefty fines, while the hit you would take to your reputation as a business owner could be irreparable.

As a rule when drafting your company’s HR policies you should look to ensure that they are always clear and specific while providing enough flexibility to meet changing conditions in your business. The auditing and reevaluating of your HR policies is an important process that must not be forgotten. Make sure that the procedures that you have in place do not fall out of step with either the scale or the culture of your company.

It is not possible to provide a comprehensive list of all HR policies and procedures that every business would need to have because each company should model its practises on its own business needs. And although there will be some disparity in the size and scope of different organisations’ policies, there are three that are absolutely fundamental both in terms of legal compliance and practical necessity:

Click here to download the three policies you need to be compliant

Disciplinary Policy

If you have just started a business then you are probably just focused on getting the company running. So when you are hiring your first set of employees the thought of having to come up with ways of disciplining or appraising them will seem far off on the horizon. But you need to have this set out in writing. It is absolutely vital in terms of employee psychology and workplace politics that there is a fair and consistent way of evaluating performance. If two employees make similar mistakes, then you have to be sure that they will be penalised or warned in a similar fashion. To be sure that there is this consistency, you have to have the policy written down and easily accessible by both employers and managers.  

Having a solid disciplinary policy in place will allow you to carry out meaningful and useful performance reviews (though the ways these are traditionally carried out are far from innovative).

Grievance Policy

If an employee has an issue, then they have to know who they are meant to turn to. Having a dissatisfied employee who does not know who to turn to will only make things worse for them. It also reflects terribly on the company’s culture. Allowing employees to voice their concerns and then listening to and acting upon those concerns is also a sure-fire way of increasing engagement and motivation around the office.

If you are running a UK based company, then it is definitely worth consulting the ACAS code of practice before articulating both your disciplinary and grievance related HR policies.

Health and Safety Policy

The third and most important HR policy that your organisation needs to have is the one surrounding health and safety. You need to outline exactly what employees are expected to do in the case of all normal emergencies. These include what to do if someone injures themselves in the office, where to go if there is a fire, where the first aid kit is and who it is that is trained to administer first aid.

Those are the three most crucial HR policies but it is common practise to also have all of the following figured out and documented: equal opportunities policy, holiday or leave policy, sickness or unauthorised absence policy, parental policy. CharlieHR has a host of templates, especially tailored for small business to help you build out your own leave policies, or even to generate your own.

Once you have established all of the above and your business is fully operational, you will also want to start thinking about having policies for the following: Personal email usage, office internet usage, alcohol and/or drug usage in the office, dress codes, data protection, filing expenses, smoking. In the long term, the combination of all of these HR policies will form the basis for your company’s employee handbook.

Click here to download our guide on how to write a company handbook