Do SMEs need an employee handbook?

Many SME owners ask why they need the formality of an employee handbook for their staff.

There are several reasons, in our view. A handbook provides clarity about the company’s expectations and details of additional terms and conditions that form part of the contract of employment but which might need to change from time to time.

It helps cut down on misunderstandings and could provide some legal protection for the company in the event of a dispute with an employee.

When demands on management time are considerable, as they often are in a SME, a handbook saves time and provides clarity about what is expected from new recruits during their induction, when there is a lot of information to digest. It also acts as a useful reference for everyone in the company especially when dealing with employee- related issues.

Well written, in clear and simple English it can offer a welcome and sense of belonging to the nervous new recruit.

Equally importantly it helps a company define what it stands for and can be used to communicate company aims and values.

So what information should be included? The basics are general company policies, rules and regulations (dress code; how people interact with customers; harassment; safety regulations; use of phones and IT for personal purposes), info on reclaiming expenses, booking holidays, sick leave, salary and performance reviews, company benefits etc. Although statutory it is useful to set out the steps for disciplinary and redundancy procedures which can also be used as a checklist by both managers and employees.

An employee handbook does not need to be expensively produced and most of the contents are standard and freely available. It is more important that it contains accurate, correct and easy to understand information.

It is, however, a good idea to have the handbook checked either by an HR or legal professional to ensure everything it contains is clear, accurate and complies with any employment legislation.

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