Whether you're a new startup or an established business, an employee handbook is an essential tool for sharing your policies and showcasing the values important to your company—yet, only 26% of businesses with under 10 employees have one.
Creating an effective employee handbook can take time and effort, which is why we put together this step-by-step guide on what to include in your employee handbook, how to write it, and three unique examples you can use as inspiration.
What is the purpose of an employee handbook?
An employee handbook is a company guidebook that outlines your business' policies, procedures, and expectations for your employees. It covers a wide range of topics, including company culture, employee benefits, codes of conduct, and disciplinary procedures.
Employee handbooks are crucial for businesses because they provide a clear and consistent framework for setting up expectations, handling conflicts, addressing employee-related legal matters, and communicating goals to employees. Better yet, an effective employee handbook fosters a positive work environment by promoting transparency and fairness.
What are the benefits of an employee handbook?
It establishes expectations
A written document that outlines all the rules, regulations, and expectations for employees, ensures everyone is on the same page. This is especially important for new hires acclimating to their new jobs and the company culture. But a handbook helps all employees understand what's expected of them, which helps minimize confusion and misunderstandings later on.
An employee handbook can provide clear and concise guidance on topics such as:
- Performance standards
- Dress code
- Equipment and technology usage
- Social media usage
- Drugs and alcohol
- Conflict resolution
It protects employers
Since employee handbooks are meant to provide clear guidelines on how employees should conduct themselves at work, if an employee does otherwise, companies can always reference the handbook.
Having an employee handbook in place also provides some cover if any legal action is taken against your business by an employee. The handbook should clearly outline your company's expectations, working practices, and disciplinary process—all of which could be useful evidence if needed in court.
Another great benefit of employee handbooks is that they help ensure compliance with relevant laws and regulations, including wages and hours, health and safety, or discrimination and harassment. That’s why it’s also a good idea to review your policies regularly to stay up-to-date with changes in legislation, and always consult with legal counsel if you’re unsure about a new policy.
It’s a time-saving reference point
Employee handbooks serve as a basis for both new and veteran employees who have questions about standard company policies and procedures. They reduce the need for individual employees to seek out basic information from managers, which can be time-consuming and distracting. Instead, employees can first refer to their handbooks and then check with their managers or another coworker if they have lingering questions.
It aligns company culture
An employee handbook is an opportunity to inspire employees with your company’s values and mission. Clearly defining what your organization stands for helps create an aligned working environment where everyone feels comfortable bringing new ideas to the table, allowing for better interactions between staff, customers, stakeholders, partners, and more. And with research showing that only 22% of business owners believe that over 60% of their workforce can recite core company values, that’s a big opportunity.
Companies that effectively integrate their well-documented values into daily operations often find that employees internalize and memorize these values. This helps prevent the employee handbook from being a one-time read on the first day and quickly forgotten afterward.
What should be included in an employee handbook?
Here are a few overarching topics that you should keep in mind when writing an employee handbook. Be sure to consult with legal counsel on exactly what to include in your employee handbook.
This section should touch on how you expect employees to behave while on the job and when representing your company, as well as any general rules each employee should adhere to. This is also a good place to lay out your company’s mission statement and values.
The employee benefits section is about the different perks employees can expect once they join your company. These may vary depending on the employee’s work status, such as whether they’re full-time or part-time, as well as how long the employee has been with the company, so be sure to mention what employees are entitled to accordingly.
Each employee is entitled to certain rights that are typically protected under the law, such as equal opportunity employment or non-discrimination and harassment protections. But some of these rights may vary depending on what city, state, or country your business and employees are located in. Be sure to look into any region-specific employee rights before you craft your handbook.
Including an explanation of disciplinary measures in your handbook is an effective way to make employees aware of the anticipated consequences of inappropriate behavior. But it also provides protection for employees from unfair disciplinary decisions since there is an official written record for handling these situations.
How to get started with an employee handbook
Now that you know what should be included, let’s go through the process of how to write an employee handbook.
To get started, research labor laws in your state, industry regulations, and any other relevant information related to your specific business. You'll also want to take a look at any existing documents such as employee contracts and job descriptions, as well as company policies that are currently in place.
If you don’t yet have documented company values, consider talking with your current employees or managers to get feedback on what they think should be included in an employee handbook.
This will help you make sure that the handbook clearly covers the topics and values that matter most to your employees and your company.
Consult with legal counsel
A legal professional will be able to advise you on specific state and federal laws that need to be included, as well as appropriate company policies. They can also help you craft language that will protect your business from potential lawsuits.
At a minimum, a lawyer should give you advice on how to write your company’s leave policy, anti-harassment policies, anti-discrimination policies, workplace safety guidelines, dress code rules, and more. But most of all, your legal counsel’s job is to ensure that the language used is clear and that the rules you set protect both the employee and your business.
Draft the handbook
Before you jump into writing, start with a basic outline using the information you’ve gathered so far. Consider your audience when building the structure of the handbook and think of how you can organize each topic in a way that flows logically and is easy to digest—check out the three examples below to get an idea of how to do this well.
Once you have your outline, fill in the details. Write all of your company policies, processes, and procedures in plain language that is simple for employees to understand—it shouldn’t be too wordy or filled with too much legalese.
Review and revise
After you’ve finished the first draft of the handbook, go through and make sure the overall message and structure makes sense. From there, get feedback from any other members of HR, senior managers or leadership, and your CEO—although the handbook will be for the benefit of all employees, you’ll primarily want to gather feedback from a small but influential circle of people during the drafting process. It’s critical that company leadership approves of everything included in the employee handbook, otherwise you could run into issues when documented scenarios come up later.
Once everyone agrees on the contents, you should also run the handbook by your legal counsel once again. Then, as a last step, consider hiring a professional proofreader to comb through for overall readability and grammar errors.
The review and revision process may take a while depending on how long your handbook is and how many people need to review it, but it’s important to be patient and not rush the process.
While you should update your handbook as internal and external policies change over time, the handbook will hold more weight with your employees if you refrain from constantly making changes.
Conduct an audit every year
As a rule of thumb, aim to review your employee handbook at least once a year, and then make updates as necessary. For example, if some of your employees work remotely or you’re planning on implementing a work-from-home policy, include a section that addresses the topic specifically.
Even if you’re only introducing a minor new policy or amending a current policy, it’s still a good idea to get some input from legal counsel before finalizing any revisions.
Distribute and review with employees
It’s not uncommon to give employees a physical handbook on their first day, but consider putting the handbook in a central, digital location where it will be easily accessible to everyone.
A document storage system like Dropbox, for example, will allow you to securely store and share the handbook within your company, ensuring everyone has access to the same up-to-date version at all times. You can still review the handbook with your new hires during onboarding and provide them with a link to find it at any point.
Do employees need to sign a handbook?
Although you should contact your legal counsel to determine if it’s legally required for your employees to sign a handbook—it’s highly recommended that employees do.
If an employee signs off on the handbook, then both the employee and the business will have proof of understanding and agreement to uphold the terms—as well as some legal protection in case of a dispute or lawsuit. And if you choose to make changes to your handbook in the future, having employees sign off on those updates can ensure everyone is up-to-date.
For the signing portion, you can include a signature field in the handbook, or have each employee sign and date an individual acknowledgment form confirming that they've read and understood the handbook. An eSignature solution like Dropbox Sign simplifies this process by allowing you to digitally templatize your handbook and electronically request signatures so that they can sign from anywhere.
3 employee handbook examples to borrow from
Sterling - creative and visually-appealing
With the help of Airmason, Sterling ditched the typical, paper-based employee handbook and opted for a slideshow format instead. Not only can employees access the handbook online, but when they do, they’ll be met with aesthetically-pleasing graphics, easy-to-understand verbiage, and unique layouts.
Motley Fool - comedic but thorough
While Motley Fool’s employee handbook is text-heavy compared to the former example, it’s still an easy and engaging read. Motley Fool’s employee handbook draws in readers with cheesy but entertaining language that shows off the company’s “foolish” culture and personality.
Plus, most of the sections are nicely organized in short paragraphs or bullet points, making them simple to digest.
Dollar General - traditional but extremely comprehensive
At 58 pages long, Dollar General’s employee handbook is packed with all the information an employee could need. From the company’s 401K to employee discounts to military leave and much more.
The sections are also alphabetically listed in the table of contents, making it hassle-free for employees to quickly find a specific topic and go straight to the page they’re looking for.
Dropbox Sign makes signing employee handbooks easy
Even though the process can be a lot to take on, creating an employee handbook is a necessity for any company that wants to set itself up for success. But even once the handbook is complete, getting it signed manually by employees can be a tedious process. That's where Dropbox Sign can help.
With Dropbox Sign, you can upload your handbook or acknowledgment form as a template, place the necessary signature fields within the document, and email the document to your employees—all from one platform.
And the best part? If you have Dropbox, the whole signing experience can be managed directly within the platform. This means no switching between multiple tools—you can locate your documents, format them with signer fields, and send them out for signature all from one place.
Plus, you and your employees can always refer to the signed handbook with just a few clicks.