The Employee Handbook – Why every business needs one and what it should include

Every business needs an employee handbook to support its day to day operations.  It is an important tool that documents not only the business’ suite of Human Resources policies and procedures, but also provides an overview of the business, clearly sets the expectations of employees and employers, and enables a fair and consistent approach for all.

Compiling an Employee Handbook – what to include

How do you know what to include? Which policies and procedures? Also, what is important for your business and its success?  

To start with, an Employee Handbook generally contains the following sections.

  1. An employee welcome
  2. Company history and overview, including mission, vision and values
  3. Your employment details
  4. Business environment details, and 
  5. Key policies and procedures

An employee welcome

It is important to welcome people to your business and provide them with a great first impression as well as explain the purpose of the Employee HandbookThe purpose of a handbook (or manual)  is to introduce your employees to your business and provide some information about your history, your clients and what your business does in more detail. 

The employee welcome can also explain what else is included in the rest of the handbook such as,  information about your business terms and conditions of employment, expectations around employee behaviour and finally details key policies and procedures. This Employee Handbook should be read in conjunction with the employee’s Contract of Employment. 

Company history and overview, including mission, vision and values

The second section of the Employee Handbook provides an overview of your business. In this section you should explain how your business started and how it has evolved into the business it is today.   This section should also explain what your business does including an overview of the products and services offered, and outline the clients and industries that you service.  

Finally, in this section it is also important to communicate your business’ purpose or roadmap for success. This includes where you are headed and the expected values and behaviours you want your employees to demonstrate on the way.

Your employment details

In this section you should tailor the information based on the general customs and practices of your business related to the employees employment arrangements.  Areas to discuss in this section include; payroll, hours of work, including overtime, leave entitlements and reimbursement of expenses and travel. 

Business environment details 

In this section you should tailor the information based on the general customs and practices of your business related to the day to day business environment.  Areas to discuss in this section include; work areas, security, kitchen, bathrooms and meeting rooms. 

Policies and procedures

The final section of the Employee Handbook outlines a number of key Human Resources policies and procedures for your business. Some sections are governed by state and federal legislation and it is important that you continually keep up to date with legal changes. This is not an exhaustive list of policies but a starting point. Some are simply key to the smooth running and success of your business and interactions with clients.

First, there are a range of compliance policies that all businesses should have, including:

  • acceptable workplace behaviour and conduct, 
  • addressing sexual harassment, 
  • bullying and discrimination,
  • privacy, and 
  • occupational health and safety. 

Following on from this, there are a range of policies and procedures which outline the various end to end human resources activities, including: 

  • recruitment, 
  • learning and development, 
  • performance management, 
  • termination, and 
  • dealing with grievances.

Lastly, there are particular policies to support tasks, resources and equipment; including:

  • flexible work practices, 
  • social media,
  • computer and email usage, and 
  • travel and reimbursement of expenses.

Your completed Employee Handbook – next steps

Once you have compiled your Employee Handbook, , the handbook and the documents it contains should not be filed and ignored.  Too often, businesses are caught out with ineffective or outdated policies because after implementing them they give them little thought.

Here are some guiding principles for developing and maintaining an effective workplace employee handbook:

Communicate the information, overviews, and policies and procedures within the handbook to employees.  This should initially be done during induction. There are many ways to do this including online, face to face workshops, one on one discussions or case studies. 

Refresh existing employees knowledge of the handbook’s content, especially policies and procedures regularly. Keep the employee handbook in a place where it can be accessed by everyone and keep a record of training details to assist with expiry dates and therefore when refresher training is due again.

Review information and policies and procedures within the handbook as they can quickly become ineffective or out of date as your business evolves or legislation changes. Set a plan in place for regular review of the policies and procedures. Make sure it is clear who is responsible for review and updates to existing documentation. Be sure to communicate any changes to employees.

An employee handbook and the Human Resources policies within it provide a solid framework of understanding for employees and employers to work together. You can also refer to the handbook and the contents when you communicate, refresh and review, if you have an employee that is underperforming or not meeting behavioural expectations.

Small Business Society can provide advice on developing a handbook which references a suite of policies that best suits your needs.  Contact Small Business Society today to discuss how Small Business Society can help your small business.

The information provided in this document is for your guidance only and is general in nature. It does not constitute as legal advice. It is the responsibility of the individual to seek legal advice where required.


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About Kate Tongue

Kate Tongue is the founding Director of Small Business Society.

She is a qualified and experienced Human Resources professional with more than 10 years of experience across the private and public sectors.

Her particular interest and experience is in managing the employee life cycle, delivering process improvements, and Human Resource strategy.


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