Employee Handbook: 5 Reasons Why Every Small Business Needs One
As a small business owner, do you provide your employees with an updated, legally-sound employee handbook that not only defines your companyâ€™s policies and guidelines, but also protects it from legal liabilities? With the staggering amount of work and responsibilities a business owner must take care of, HR duties many times are pushed towards the bottom of a to-do list. However, neglect of HR tasks can indirectly affect a business and negatively impact its growth. The employee handbook is one HR function that every company needs.
An employee handbook is a record of a businessâ€™s policies and how the business is to be managed. The book often covers the following topics specific to the company:
Â· Job responsibilities and rights expected from employees
Â· What employees expect from employersâ€™ authority and obligations
Â· Entitled employee benefits, conduct guidelines, and workplace expectations
Â· Company and government policies and resulting actions on drug and alcohol abuse, harassment, electronic communication and social media, safety and health, attendance, and discipline, etc.
No matter how small a business is, it should always have its company rules in writing, even if itâ€™s only a couple pages. Below are 5 reasons why every small company should have an employee handbook.
1. Prevention and protection from legal liabilities: Employee handbooks are a vital way to help reduce legal responsibility and protect companies against an employeeâ€™s claims in court on matters ranging from harassment to employee mistreatment. Handbooks are often considered a contractual obligation in court, and thus should not only be carefully worded, but also updated annually to stay compliant with company and government regulations. This is especially important these days in the age of widespread social media use. According to a Strategy Analytics report, by 2012 there will be an estimated 1 billion social media users, so companies must take action in risk management now by establishing rules and policies.
2. Tangible guidelines: By having a concrete list of business policies and expectations that are clear and unambiguous, an employee handbook allows for neutral and objective treatment. Statements of acceptable and expected behavior from both employees and employers, along with regulations and procedures located all in one book, provide a common, physical source for everyone within a business to refer to.
3. Minimize employee and employer misunderstandings: The employee handbook can become an important communication tool between a business and its employees. Many companies require their employees to sign an agreement stating they have received and read their employee handbook, which allows for everyone to be on the same page regarding uniform policies. Specifications on workplace expectations and directives allow both employers and employees to practice accordingly, which may help reduce many disputes.
4. Provide a comprehensive answer to frequently asked questions to save time and money: Instead of having to repeatedly answer the same questions to employees, from a companyâ€™s mission statement to its provided benefits to its disciplinary regulations, an employee handbook will take care of that problem for you. Not only will a small business be able to save both time and money, employers can also be rest assured that everyone will be receiving the same information.
5. Create an overall better working environment: An employee handbook stating a small businessâ€™s guidelines on employee benefits, bonus programs, attendance rules and many other points that project a companyâ€™s culture will affect the overall office environment. A company managed with unbiased and reliable rules will foster greater employee satisfaction, leading to an increase in efficiency and productivity.
Many Professional Employer Organizations can offer employee handbook services that personalize and design handbooks tailored specifically to a businessâ€™s protocols and needs. For small businesses, this is often a cost effective and time-efficient alternative solution in publishing and updating their employee handbooks. Because employee handbooks play such a crucial role in reducing a companyâ€™s legal liabilities, these publications must be revised yearly with legal updates to remain compliant with company, state and federal regulations. A PEO can help companies remain constantly informed on any change in government laws that affect business policies and procedures.