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Small Business Employee Handbooks: The Pros and Cons

Small Business Employee Handbooks: The Pros and Cons

Whether you’re just now setting up your small business or simply trying to make your current one operate that much better, one of the decisions you must make is whether or not to create an employee handbook. The U.S. Small Business Association (SBA) refers to an employee handbook as “an important communication tool between you and your employees.” As such, it holds various company policies, procedures, expectations, and responsibilities so that both you and your staff know what to expect from each other in regard to employment-related issues such as wages, benefits, work hours, and more.

So, the looming question is: Does your small business need one? To help you figure out the answer, it helps to look at the pros and cons of handbooks, as well as a few other additional factors that may help make the decision that much easier.

Handbook Pros

As far as the pros of having an employee handbook, there are many. For starters, as the SBA has pointed out, it is a great way to communicate your workplace expectations so your employees always know what their roles and duties are, as well as what you are willing to provide in return by way of compensation (both financial and otherwise), protection, and workplace safety. This helps reduce the number of problems that could occur in regard to policies and procedures that maybe weren’t clearly explained or clearly understood.

Employee handbooks are also a great resource to draw upon should you find yourself at odds with a member of your staff resulting in some form of legal action. By having your written words to back up your position in court, this puts you in better standing in front of the judge or jury, potentially increasing the odds that adhering to your policies will work in your favor, providing a more favorable (and less costly) verdict.

Handbook Cons

The one major con of an employee handbook comes by way of one that is either poorly written or somehow incomplete. In order to be a valuable resource, and one that both you and your staff can draw upon to help guide employment-related issues, it has to include enough information so that it is informative regarding issues related to the members of your team, while also not being so restrictive that it inhibits you from running your company effectively.

It should also provide information that adheres to the guidelines as set forth by various employment laws and agencies, such as the American with Disabilities Act (ADA) and the Occupational Safety and Health Administration (OSHA) to make it more complete. If it doesn’t, then you might realize that it doesn’t really do you much good should you find yourself in court.

Another con of creating an employee handbook is that it takes time and/or money. Whether you do it yourself or pay a writer to do it, it is going to cost you in either minutes or dollars, which may make developing one a little less appealing if you’re strapped for both.

Other Factors to Consider

In addition to considering the pros and cons of offering an employee handbook, there are other factors that you may want to take into account before making your final decision. These include:

  • The number of employees you have. While an employee handbook can make it easier to share employment information with a large number of staff, if you only employ a couple of people and don’t intend to employ many more (or if you use more contracted help versus hiring staff on payroll), it may be fine to go without one.
  • How much you like verbally explaining your policies and procedures. Some small business owners like employee handbooks simply because then they don’t have to explain everything that is in them. They can just give it to their employees, sharing the main points and letting them read the more detailed information on their own.
  • How it might look to your staff. Being able to hand staff an employee handbook says that you care about them and also that you are willing to be transparent about important employment-related issues by putting them in writing. It also makes you look more professional, which can help your employees take you and your small business more seriously.

Anything I’ve missed? Whether you do or do not have an employee handbook, I’d love to hear what factors helped you make your decision, so please feel free to comment below!

I’m always interested in learning other small business owners’ thoughts on relevant topics and issues, so if you have a comment or unique article idea, feel free to contact me at [email protected] (put “Businessing Magazine” in the subject line, please). If I use it, it’s a free link to your website!

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by Christina DeBusk // Freelance writer, author, and small business consultant committed to helping entrepreneurs achieve higher levels of success.

Opinions expressed by contributors are their own.