How to Craft a Small Business Employee Handbook


Whether you are a small business owner just starting out or an experienced one with many years of expertise under your belt, having an employee handbook can be extremely beneficial for both you and your employees.

An employee handbook is a document that details the rights, rules, and regulations that pertain to working within a particular business. It outlines everything from expectations to disciplinary procedures so both parties have clarity on important topics such as hours of operation, leave policies, vacation days, workplace safety guidelines, and more.

As an employer who wants their business to run smoothly and efficiently, creating a clear yet thorough user guide for all staff members is essential in order to maintain optimal productivity levels. Only 26% of small businesses have an employee handbook in place, and HR experts say it’s risky to do without one. In this article, we’ll take you through each step needed to create the ideal small business employee handbook.

Define Your Company’s Purpose, Values, and Goals

An employee handbook should clearly define your company’s purpose, values, and goals. This will give your employees a clear understanding of why they are working for you, what they can expect from the company, and what is expected of them.

Your mission statement should be brief yet comprehensive and answer questions like: What do we stand for? How will we achieve our goals? What is our commitment to customers and employees? Make sure you explain everything in a clear and concise manner so that employees have a clear understanding, and review the handbook regularly, in order to keep information up-to-date.

If you’re unsure how to go about creating one, consider researching an employee handbook for small business operations template to better understand what information needs to be included.

Outline Your Expectations From Your Employees

You should also include a section in your employee handbook outlining expectations for employee behavior and performance. This section should cover topics such as attendance, dress code, safety, and customer service standards. Make sure these expectations are clear, fair, and reasonable.

The dress code and behavior of your employees mainly depend on the type of company you’re running and the industry you operate in, but some general rules apply to all companies. For instance, all employees should look presentable and act in a polite and respectful manner with both coworkers and clients. Be sure to outline any disciplinary actions that may be taken if employees do not meet expectations, such as verbal warnings, written warnings, suspension, or termination.

Have a Good Understanding of Local and Federal Laws

It is essential to be aware of all federal and local laws that may apply when creating an employee handbook. Depending on where your business is located, the applicable laws governing employees’ rights can differ significantly. For example, some states have specific laws related to wages, hours, vacation time, and leave policies. Employers must also comply with any federal laws that are applicable to the workplace, such as those dealing with discrimination, harassment, and health and safety. 

Ensuring compliance with all relevant laws is crucial when developing an employee handbook. Small business owners should thoroughly research which state or local laws may apply to their business and take steps to ensure they are compliant. They should also keep their employee handbook up-to-date by regularly checking any law or restriction changes.

Edit the Handbook Before Giving It to Your Employees

After you have written your employee handbook, it is essential to review and edit the content. Carefully read through the document and make sure that all of the information is accurate and up-to-date. Additionally, edit for grammar, clarity, and consistency. Consider whether any topics need to be added or removed. 

You may find it helpful to have a colleague review your handbook. They can often spot areas that need attention and provide valuable feedback. Additionally, consider having a lawyer look over the contents of your employee handbook as legal implications can arise from some language included in the document. 

Once you are confident that the content is accurate and comprehensive, you can go ahead and distribute the handbook to your employees. It is important that they understand all of the policies in the document so make sure to explain key points, have them sign a receipt indicating acknowledgment of their understanding, and keep it on file for future reference.

Bottom Line

An employee handbook may not always be required by law, but it’s necessary. With the right guidance and information at hand, any small business owner can craft an effective employee handbook in no time that will ensure everyone involved gets off on the right foot. The key is having an open dialogue with employees so that everyone feels heard and impacts their work environment positively. Best of luck!