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How to write an employee handbook for a small business or startup

It’s the most important living document your organisation will have. Here’s how to get it right.

An employee handbook is a sort of employee manual — a guide to all aspects of working at your small business. There’s no set structure for writing an employee handbook, but it usually features your company's policies, ways of working, core values and mission.

Writing your first employee handbook is an important step for your startup.

For your handbook to be compliant, you’ll have to cover all the policies required by the law.

And for it to really have an impact, you’ll have to make sure it encapsulates who you are as a company and how you operate — in other words, your unique company culture.

Why have an employee handbook?

1. It ensures you comply with the law

It's not all about employment contracts — your handbook has a key role in making sure you protect your startup from legal problems.

Your handbook will, as a minimum, include the three HR policies required by UK employment law:

  • Health and safety policy
  • Disciplinary policy
  • Grievance policy

This legal requirement applies to all companies, including very small businesses, no matter whether their teams are working full-time or only part-time. If you fail to have fully-compliant policies, you risk being taken to an employment tribunal.

If you’re not sure where to start with these policies, you may find the guide our HR advisors put together helpful. Click below to download it for free.

Click here to download the three policies you need to protect your business

2. It safeguards knowledge

As your company grows, the sum of the knowledge acquired by all of your employees will only grow with it. As people move on and employment relationships change, some of that knowledge will inevitably be lost or forgotten.

3. It codifies your policies

Using your handbook as a policy manual that lays out all of your HR policies in one place forces you to codify many processes that would otherwise remain unspoken, in the back of people’s minds or scribbled onto the corners of notebook pages. A good company handbook ensures everyone in the team is aligned on your startup's do's and don'ts.

4. It serves as an onboarding tool

An employee handbook is also incredibly useful during the employee onboarding process. It is something that new hires can refer back from their first day to time and time again without the anxiety associated with asking obvious questions about attendance policies, dress code, punctuality, or sick days when they’ve just arrived. It’s a springboard that helps new employees establish themselves comfortably within the organisation during the onboarding process.

Find more information about CharlieHR's onboarding feature, or check out our shortlist of best onboarding software.

5. It establishes a common language

By being a written document, the handbook codifies and establishes a common language for the company and gives a sense of the formality expected. It also provides a space for any specific terminologies or jargon to be spelled out and explained. There’s nothing more daunting than hearing words you don’t understand being used on a day-to-day basis.

6. It gives an overview of operations

Having all of the processes laid out in one place will allow your team to review the way that your small business is operating, in one place. It will give a sense of whether there are too many processes or too few.

How to write an employee handbook for your small business or startup

There is no set format for how to write an employee handbook, but it’s good practice for small business owners to:

1. Include the essentials

There are three key topics you should cover when writing an employee handbook for your small business:

  1. Culture: include a short overview of your company history, why it was founded and what your goals are. This is the place to set out your company values, mission statement, and company culture.
  2. Policies: Your employee handbook must include all of your company policies — not only the three essential policies required by the law but also any others you may have. These may include policies around paid time off (PTO) or medical leave policies, flexible working, parental leave, sick leave, equal opportunities and non-discrimination, remote working, and use of social media. It's also useful to list any employee benefits or perks, such as whether you offer health insurance to your team.
  3. Processes: your employee handbook is a great place to set expectations on the work environment and the way you work as a team. You should include, for example, how you run performance reviews, how you set goals and how you track progress towards them, how often you have one-to-one and company-wide meetings, and what behaviours are subject to disciplinary actions.

Codifying your company's mission, workplace culture, policies and processes into a clear and comprehensive handbook can take a lot of time and effort. That’s why a lot of startups with no HR team seek external support.

At Charlie, our HR advisors can lead the way with their small-business expertise and help you put together a bespoke company handbook for your business.

Need help writing your own company handbook? Book a call today.

2. Make sure it reflects who you are as a company

Each company is different, and a key asset like your employee handbook should reflect that.

There are all sorts of templates and employee handbook examples online that you could use. However, if you want your handbook to encapsulate your vision as a company and the way you work, a simple copy-and-paste job from a standardised employee handbook template won’t do.

When writing the employee handbook for your small business, take the time you need to make it really yours — use your own tone of voice and make sure each section speaks to your company culture and reflects your identity.

If you currently don’t have the resources to do such a lengthy job, maybe you should outsource it to an HR professional likes the ones we have at Charlie.

With your dedicated HR advisor, you’ll get the partner you need to build a company handbook from the ground up and fill it with forward-thinking policies that will make a real difference to your small business.

3. Review it regularly

Company processes will change as your small business grows. You should write your employee handbook as a living document that people can edit and that can adapt over time.

Without reviewing it regularly, your employee handbook risks quickly going out of date. Services like Charlie’s HR Advice can help you with this review process by:

  • Ensuring all your policies are up-to-date and comply with the law without having to deal with legal jargon
  • Rewriting or adjusting any existing policies as your company grows and your specific context changes
  • Building new progressive policies to keep a competitive edge in the job market and make sure you focus on DE&I to retain and attract the best talent

This way, you'll always be safe in the knowledge your handbook is up-to-date.

4. Get feedback

Employees should feel comfortable enough to give feedback about whether or not your handbook is helpful. It’s especially important to get feedback from new starters who will be using the handbook on a daily basis. If something isn’t working for them, change it.

4. Have a designated owner — but make sure everyone contributes

Someone has to be responsible for updating the employee handbook whenever it needs to be changed. At the same time, the document should have multiple contributors.

If your operations manager is responsible for the handbook as a whole, then get a product expert to write the section on the product, and get the CTO to add in the part on technology. Don’t risk letting such a key document only portray the view of one person. By making it a collaborative process, you will get a truer representation of the organisation as a whole.

5. Have an HR advice professional check if it’s compliant

Writing an effective employee handbook can be a daunting task, especially if you are a small business with no dedicated human resources team.

Taking a stab at handbook writing with no experience or knowledge of employment law can put you at risk of legal issues. For this reason, many small companies choose to get professional legal advice.

Charlie’s HR Advice was created specifically with startups in mind. For only £299 per month, our qualified advisors:

  • Ensure your employee handbook is compliant, giving you peace of mind knowing you’re protected from legal repercussions.
  • Help you write an employee handbook to reflect your company's tone of voice and identity.
  • Help you build and update company policies personalised for your specific company context.

This is how we compare price-wise to other options you may consider to help you build a great employee handbook that's both comprehensive and compliant.

Comparison cost for getting support - with CharlieHR only £299 and more than £3,000 for Peninsula

7. Make it easy to find it

Writing a handbook for your small business is only the first step in the process. It’s equally important to ensure your team can easily find it and access it.

Long gone are the days when employee handbooks were written as physical objects, printed on paper, and stored in a dusty cabinet — out of sight and out of mind. But even now that small businesses are much more digital, it is still common for handbooks to get lost in shared drives, hidden in forgotten subfolders.

Handbooks are only useful when they’re easy to find. For this reason, we’ve made it possible to store your employee handbook directly inside Charlie’s software.

Screenshot of what employee handbook looks like in CharlieHR software

With a self-service HR software, your team can access the information they need, whenever they need it, in a place they’re familiar with.

This is also great for new joiners: they’ll be able to get familiar with your company policies and processes, all in one place, without you having to spend hours pulling documents together.

To take a look at Charlie's Handbooks feature, you can start a free trial now.

Want to learn more about how to craft a company handbook to have a real impact on your company culture?

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