Why Small Businesses Need an Employee Handbook


Human resources often time is one of the biggest challenges for small businesses.  A general lack of expertise in the area leaves many small employers in danger of HR related employment law violations that can result in significant penalties.

One thing small businesses can do to help prevent these HR compliance issues, while at the same time benefiting other areas of the company, is to create an employee handbook.
Employment handbooks aren’t a new resource.  However, they are now starting to add in a lot more HR regulatory compliance than in the past.  Here are some of the basic things to have in an employee handbook which include:

  • Company mission and values
  • Workplace harassment policies and procedures
  • Company-specific policies
  • Dress Code
  • Time off policies
  • Benefits offerings
  • State and Federal employee mandates

As HR has evolved and become more complex, the role and importance of employment handbooks have grown as well. Due to the rising complexity in employment regulations, handbooks encompass many important company policies and procedures. These additions enable them to be a go-to resource in today’s HR climate.

For small businesses specifically, there are a few reasons why employee handbooks are essential for HR compliance and business success.


One of the most important reasons to create an employee handbook is that it helps to lower the risk of employment liabilities and reduce the likelihood of employee lawsuits.  Employee Handbooks allow a place for processes and policies to be put in writing that help to reduce the risk for employers.

One of the more prevalent work-related issues that have become recent headline news is a workplace and sexual harassment. Creating workplace harassment policies and educating staff are a must for all companies. Employment handbooks present a place for businesses to include an anti-harassment policy, including how and who to report any grievances to.

Be sure that all compliance and workplace policies are well-written to prevent any potential issues from arising. Staying compliant with various employment laws (at the federal, state, and local level) is more important than ever, which is one reason why small businesses need to invest in an employee handbook.


When employers take the time to invest in and create a great employee handbook, it becomes a valuable tool for employees. Should an employment or work policy-related question arise, employees know that they can turn to their handbook to seek an immediate answer.  Should the handbook not have the information needed, it should also state where or who an employee can go to for an answer to their question.

Because of the importance of the handbook for employees, they should be very easy to access. Ideally, this can be done in a few ways. Handing out hard-copy versions during onboarding is a great start, but they should also be added to other easy-to-find places. A company intranet site is one example.

Also, infusing company culture and uniqueness into the employee handbook makes it much more valuable.


For both employees and employers, onboarding is an incredibly valuable and important process. This is the new employees’ first impression of working for their company, and the beginning of their new journey in their career. For an employer, it represents a chance to move the business forward as the employee develops and grows in their new role, and over-time rises within the company.

This is why an employee handbook is so valuable for the hiring and onboarding process. It helps to get new hires acclimated to their company culture, environment, policies, procedures, mission, and much more. For many companies, the employee handbook serves as a guide for the new hire process.

An employee handbook should provide new hires with all the relevant company information needed to get them adjusted to their new workplace and help prepare them for success with their new employer.


It comes as no surprise that company culture is important. This is true for both employees and employers. This is another area where employee handbooks provide value.  If written clear and precise, handbooks can serve as the roadmap for workplace conduct and expectations, which go a long way in establishing a company culture. Employee handbooks can also set the tone for business expectations, including the company’s mission and values.

It’s important that workplace policies, and more importantly how companies and leaders uphold them, help to create a safe and engaging work environment. These are some of the building blocks of great company culture.

Lastly, company culture is a critical factor in achieving business success. The culture of the company is a great marketing tool for recruiting and is very important for employer branding and employee retention. Also, better cultures lead to happier employees, and happy employees are more productive. If employees are happy and productive while at work, chances are the business as a whole will benefit.


The thing to keep in mind with employee handbooks is that they don’t have to be dull and boring. While this has been the case in the past, some employers are taking a new approach and making their handbooks more engaging. These same employers realize that their handbooks can and should be a valuable resource for all employees, not just new hires.

But most importantly, creating an employee handbook will make for a safer and happier workplace, as well as help to keep your small business compliant and reduce the likelihood of fines, penalties, or lawsuits that can do severe damage to the company. Once you create the employee handbook, it is important to realize that it is a “living document” and should be updated regularly.

At Morgan & Franz we actually provide a service to our clients to assist them with the creation of or the updating of an existing employee handbook.  Ask us how we can help you today get your updated employee handbook.  Don’t put this off any longer this can be a lifesaver for today’s small businesses.  

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