Does your organization codify policies and procedures in an employee handbook? If not, you could be missing out on a key element in your company’s culture.
As a building block of your company’s culture, an employee handbook is an integral part of the new employee onboarding process. In fact, companies that have an updated version of their employee handbook are significantly more likely to have experienced growth during the last 12 months.
Has Your Employee Handbook Been Updated in the Past 12 Months?
In Asure’s 2024 HR Benchmark Report, we took a look at eight different HR components. Within each component, we asked five questions. Then, we looked at what the company’s growth was like for the previous year.
As a part of our section on onboarding, we asked employers if they had an employee handbook that had been updated within the last 12 months.
- 63% of zero-growth companies had an employee handbook that had been updated within the last 12 months.
- 81% of fast-growth businesses had an employee handbook that had been updated within the last 12 months.
This 18% spread is remarkable enough, but it becomes even more noticeable when you only look at firms that have less than 25 employees.
- 50% of zero-growth companies with under 25 workers had a recently updated handbook.
- 80% of fast-growth businesses with under 25 workers had a recently updated handbo
When you only look at organizations with 25 employees or less, the spread between fast-growth and zero-growth companies jumps to 30%. Whether employee handbooks are improving the company’s outcomes or the outcomes lead to better HR practices, there is a close correlation between using regularly updated handbooks and achieving revenue growth.
The Advantages of Incorporating an Employee Handbook Into Your Onboarding Process
The numbers are clear. Using an updated employee handbook is a shared characteristic among fast-growth companies. If you aren’t already using an employee handbook on a regular basis, there are a few potential benefits of doing so.
Ensure Culture and Compliance
When it comes to onboarding, the goal is to build a process that encourages culture and compliance. An employee handbook fulfills both goals. They help to communicate your organization’s mission, values, and vision.
Additionally, your handbook is important for compliance. It may contain anti-harassment policies, information on state-mandated paid leave, and other important legal regulations.
Your company’s cultures and goals can change, just like regulations can change. Because of this, it’s important to update your employee handbook annually so that it transforms to match your organization’s changing needs.
Standardize Your Onboarding Process
Next, your employee handbook plays an integral role in standardizing your onboarding process. It helps you look professional to new hires. Additionally, it ensures that every employee goes through the same training process.
Improve Employee Engagement
An employee handbook can increase your employee engagement and improve fairness. Instead of trying to guess what your paid leave policy is, you can direct workers to the paid leave section in the handbook. Your handbook should include key information about breaks, paydays, and other topics that are important to employees.
Manage Employee Expectations
Your handbook is also a good way to manage employee expectations. Besides updating employees on your policies, you can set expectations about their performance and how frequent performance reviews are. Depending on your organization, you may also want to review criteria for raises and set expectations in other ways.
Explain Federal, State, and Local Laws
Each state and locality has different employment laws. Additionally, many departments in the federal government have regulations as well, such as requirements for completing I-9s and ensuring workplace safety. On a national level, employees and employers are bound by anti-discrimination and anti-harassment statutes.
Your handbook plays a key role in informing workers about various laws. It’s also a good idea to give workers access to a digital copy so that they can easily look up policies and updates when they need to.
Advertise Employee Benefits
While the employee may officially work for you, onboarding is a chance to cement their new relationship with your company and convince them that they want to remain over the long run. With this in mind, you can use the employee handbook so that workers know what benefits they will get, when the benefits kick in, and how to access them.
Introduce Employees to Your Mission, Vision, and Values
Your handbook includes important information about your company’s mission, vision, and values. In our 2024 HR Benchmark Report, we found that conveying values is more common at fast-growth companies. Among small businesses with less than 25 people, 64% of zero-growth companies and 76% of fast-growth organizations taught the company’s mission, values, and vision during formal orientation.
Communicate Important Company Policies
If your organization has special policies, the handbook is a good location for them. By placing these policies in the handbook, you ensure that new employees learn this information right away and are operating with the same understanding as everyone else.
Defend Against Potential Claims
Once someone is trained using your employee handbook, you can get them to sign off on their training. Then, you have physical proof that they completed training in case there is a lawsuit in the future. Through your employee handbook, you can lower your company’s legal liability.
Offer Support and Access to Help
An employee handbook is one of the places workers can go when they need help or have a question. Because of this, the handbook should include information, like an HR number or email address, where workers can go to report harassment, safety issues, or other problems.
Tips for an Effective Employee Handbook
As you develop and update your employee handbook, there are a few things you can do to make it as effective as possible.
Review Annually
One of the most important things you can do to create an effective employee handbook is to review it at least once a year. Legal regulations, state rules, and workplace policies change on a frequent basis, so you need to stay up-to-date.
Reading the handbook may also make you realize that some policies should be changed. For example, you may have an issue with workers getting a lot of overtime. While you legally have to pay workers for any overtime they work, you can create policies about turning in overtime requests prior to working overtime or limiting the amount employees can do before they must go home.
Hire Outside Eyes
As a small business owner, you only have so much time to work on things like employee handbooks. While hiring outside eyes costs money, the price is likely worth it. Your own time has value.
More importantly, hiring a pair of outside eyes means that your handbook is developed by experts. Not only do they know about all of the latest regulations, but these experts can complete a handbook in just a few hours because of their experience.
Never Use Artificial Intelligence (AI)
One of the most important things to remember is to never use AI for any legal documents, policies, or employee handbooks. AI isn’t updated with the latest laws, so you won’t be in legal compliance with current regulations.
Additionally, AI often makes poor recommendations. In one famous example, the AI recommendation for keeping pizza cheese from sliding off was to use glue. There are times when AI can make life easier, but the creation of your employee handbook is too important to delegate to a machine.
Signed Acknowledgment of Receiving the Handbook
Finally, you should always get a signed acknowledgment that the employee received the handbook and was trained on it. This protects your organization in the event of a dispute, reduces your liability, and shows you exercised reasonable care.
Fast-Growth Companies Are More Likely to Use Employee Handbooks
Employee handbooks are an important way to manage expectations, showcase your benefits, and introduce workers to your company culture. Additionally, they ensure your company is in legal compliance and protected from potential lawsuits. These handbooks are incredibly important for your company’s onboarding, which is why they should be updated on an annual basis.
Fast-growth companies are significantly more likely to update their employee handbooks on an annual basis. If you want to learn more about creating and updating your handbook, reach out to our team of small business HR and payroll experts today.