How to Write an Employee Handbook For Your Business

“How much time off do we get?”

“How does the company investigate harassment?”

“What’s the deductible for our health program again?

An employee handbook is key to answering questions like these or pointing an employee to the answer. It isn’t a massive document full of all the policies and procedures your organization uses, but it should be an employee’s first reference point when they have a question about anything your company does.

Here’s how you can create yours.

What is an employee handbook?

It’s part reference guide, part bible, and part introductory document. First shared with new employees early in their onboarding, an employee handbook is a document that covers the most important aspects of your organization in one place. You won’t find every policy in full, but you’ll at least get a summary of them. It introduces new employees to your culture, how you do things, and where they should go if they run into any issues during their onboarding. That’s why your employee handbook should cover everything that matters most to your employees.

Employee handbooks often include essential legal information as well, meant to protect organizations from liability while making new employees fully informed about the specifics of their employment. That way, there are no misunderstandings about what a job really is before an employee gets started.

Creating an employee handbook is a time-intensive, resource-heavy process, but it’s more than worth it since it comes with the following benefits:

• Streamlined onboarding: Onboarding new employees is a lot smoother when you have a single document standardizing the process for everyone.
• Centralized answers: A carefully crafted employee handbook can answer most, if not all, of an employee’s questions about how the company works. That includes remote policies, benefits, and perks.
• Lightened HR load: Having a robust, up-to-date employee handbook gives HR teams a single place to point to for recurring questions instead of constantly re-typing the same answer.
• Legal protection: In many organizations, employees are required to confirm that they’ve received the employee handbook in writing. This is because your handbook will usually include important legal disclaimers, like whether you’re offering at-will employment or not.

Convinced? Let’s dive into how you can make your own employee handbook.

Creating an employee handbook

Creating an employee handbook is a serious endeavor, but it’ll save you a ton of labor and headaches in the future. To set yourself up for success, you’ll want to follow these steps:

1. Get the team together: You need the right group of people to create an employee handbook. You’ll want some experts from HR, of course, but colleagues who’ve been at the company longer, department heads, and even recent hires can all bring unique perspectives to the process.
2. Collect all the information you need: Policies, processes, and benefits are just a few of the topics you’ll need to be up-to-date on before you start creating your employee handbook.
3. Draft a first version: Your first draft should focus on getting everything you need into the handbook with a structure that makes sense. Don’t worry too much about writing things exactly how they need to be.
4. Streamline for the second draft: Once you’ve finished your first draft, you’ll want to review it. Check for consistency, make sure you have all your sources, and try to cut down on any extraneous content. Most teams tend to add too much in their first draft.
5. Get stakeholders and leadership involved: After creating a draft that feels pretty close to what the final product will be, it’s time to get leadership and other stakeholders involved. At the very least, they need to be aware of what you’re working on, but they’ll also be able to share perspectives that make the final handbook much stronger.
6. Get feedback from a focus group: You don’t necessarily want to open up your handbook to feedback from everyone, but getting a focus group representing your workforce is a great way to strike a balance between no feedback and too much feedback.
7. Implement feedback: Once you’ve collected all the feedback you need, it’s time to actually implement it into your handbook.
8. Get a legal review: This step is absolutely crucial. Since your employee handbook will communicate essential legal information to employees, it should be reviewed by legal counsel.

Ready to start? Here’s a quick overview of what an employee handbook should contain:

• Company introduction
• Guidelines for employee conduct
• Legal aspects of employment
• Employee benefits and perks
• Company processes and policies

Let’s get into the details.

What does an employee handbook contain?

While no two employee handbooks will look the same, they’ll almost always include the following.

Company introduction

At the very start of your employee handbook, you should brief the reader on your organization, its history, and its mission. Why should an employee be excited to work at your organization? How can their career goals mesh with the company’s future? These questions, and more, should be answered in this opening section.

You don’t necessarily need to cover every part of your organization’s history, but any major milestones—like investment rounds or acquisitions—should be covered. This is also the section you’ll use to introduce employees to your culture, listing out your core values and how they play a role in everything you do.

Guidelines for employee conduct

Having a clear code of conduct for employees in your employee handbook is essential for preventing potential HR nightmares. Conflicts, misunderstandings, and thorny legal issues can all be prevented by including this in your handbook. Here are some elements you could include in your code of conduct:

• Use of authority: Employee codes of conduct aren’t just for individual collaborators, they can (and should) cover managers, too. Outline situations where a manager using their authority are acceptable and when they’re not.
• Work environment: How do you define the “work environment?” How should employees behave when they’re in the office? Do you expect a certain level of cleanliness where their desks are concerned?
• Conflicts of interest: Define what a conflict of interest would be within your organization, and steps employees should take when one is identified.
• Attendance and punctuality: What are your expectations regarding punctuality? Does an employee who shows up at 9:30 just work until 5:30? Or do you need them at their desk at 9am sharp? What happens when employees miss work without advising their manager? What would constitute a good reason for doing this?
• Definitions of misconduct: Are there any behaviors that can result in immediate termination? What about those that would start a disciplinary process but not necessarily result in firing an employee? You don’t just need to define behaviors that result in these significant consequences, you should also list minor behaviors you won’t tolerate in your workplace.
• Dress code: Suits and ties? Shoes, shirts, and that’s about it? While your industry might have some built-in assumptions about what people should and shouldn’t wear, it’s a good thing to lay out a clear dress code in your employee handbook to avoid any misunderstandings.
• Use of company resources: For employees who use company vehicles, credit cards, and similar resources, it’s important that you outline how these resources are to be used. This helps prevent misuse and disagreements around reimbursement.
• Conduct outside the workplace: Do you have specific policies in place regarding how employees use social media outside of work? Maybe you want to outline your expectations regarding their conduct at events, conferences, and in other situations where they represent your organization?

Where other sections of your employee handbook will summarize documentation found elsewhere, the employee code of conduct you include here should be as complete as possible.

Legal aspects of employment

This section will likely be a bit more dry than others, but it’s an essential part of your employee handbook. This is where you’ll communicate some of the legal aspects of being employed at your organization, which can help answer important questions and prevent any legal issues that might arise in the future. While the exact contents of this section will depend on your industry, your organization, and the kind of work you expect from your employees, it’ll typically cover topics like:

• Worker classification: Are your employees full-time or part-time? Are they employees or contractors? Writing this out clearly in your employee handbook is essential.
• Remote/hybrid policy: Should employees expect some flexibility around where they do their work? Or do you expect them in the office except under exceptional circumstances?
• PTO policy: PTO policies are unclear for too many employees. Your handbook should be their resource for questions like “how much time off do I get a year?” and “how do I request my time off?”
• Harassment policies: Harassment is a serious issue, and each organization should have a clear policy for handling it. Laying this out in this section of the employee handbook serves to both reassure employees that you take harassment seriously and dissuade behaviors that would fall under this policy.

Employee benefits and perks

Compensation and benefits are a big part of what motivates employees to join your organization, so outlining them in the employee handbook is important to properly set expectations at every stage of their career. Here are some of the things you’ll want to cover:

• Compensation: If your organization is transparent about salaries, you could include them in your employee handbook. If not, you can still include information about promotions, raises, and how you adjust salaries for inflation.
• Health benefits: What health benefits can your employees expect? You don’t need to include your entire policy in the employee handbook, but eligibility requirements and maximums for popular expenses can be.
• Company car: Which employees have access to a company car? What are your expectations around their use of it?
• Company spending accounts: What can employees expect to expense to the company? How much can they expense? What happens if there’s a disagreement about what should be expensed?
• Stock options: If your organization offers stock options, outline how that works in your employee handbook and point to resources that offer more details.
• Paid leave: How much time off do employees get each year? Do they need to get that time off approved? If so, how does that work?

Company processes and policies

To be clear, the goal is not to have every single process or policy outlined in your employee handbook. To do this would create a document hundreds of pages long that few people would actually consult. Instead, you should make your employee handbook a directory, which cites some of the most important processes and policies your company uses, while giving employees a reference they can follow if they want to consult the full document. 

The goal is to make sure employees know about the policies most relevant to them without overwhelming them. Here are a few examples of policies you might want to include in your employee handbook to get you started:

• Non-discrimination: Make it clear that your workplace is free of discrimination and outline the policies you have in place to ensure that’s the case.
• Health and safety: In some industries, this may be as simple as listing the policies your organization uses to prevent issues like back pain and eye strain while working at a desk. In others, you may need to go into more detail, like what PPE (personal protective equipment) employees are supposed to wear and how vehicles are supposed to be used.
• Drug, alcohol, and smoking: Outline your requirements around drugs, alcohol, and smoking, as well as the policies in place to keep your workplace free of these substances.
• Parental leave: Since this varies depending on your jurisdiction, it’s important to specifically mention the policies you have in place around parental leave.
• Technology and communication: Are employees expected to keep their phones off when they come to work? What devices can they connect to your network? These are just a few examples of the questions these policies answer.
• Separation procedures: Policies that cover the different situations where you part ways with an employee, whether that’s initiated by them or the organization, are important to mention in an employee handbook.

Writing the book on employee satisfaction

A properly written employee handbook is essential for clearing up any potential confusion around processes, policies, benefits, and more. It’s usually a hefty document and requires a significant investment to create from scratch. But between the potential legal issues, inter-employee conflicts, and misunderstandings it can avoid, the investment is more than worth it.