The following transcript is from an interview between Brandon Laws and Lacey Halpern on the podcast episode entitled: “The Importance of an Employee Handbook in Small Business.”
Brandon: Why would a small- or medium-sized company need a handbook in the first place?
Lacey: I think it’s important for a company to have a handbook because oftentimes when a new employee onboards into your organization it’s really your first opportunity to show them how you are as a company. It sets the tone for the expectations that should be outlined for this new employee. And really it gives the organization the ability to hold folks accountable, and that’s really what most companies use handbooks for: to hold people accountable, to be consistent, and to set your expectations for your employees.
Brandon: Do you think there’s a specific size of a company that really needs to get a handbook in place?
Lacey: In my experience, I’ve seen companies with even just two employees have issues with employees not performing, not following policies, etc. So in those instances, those companies that chose not to have a handbook oftentimes look back and say “I wish we had this now.”
Brandon: So it almost seems like it’s after-the-fact. If something happens, a business leader realizes, “okay, I’m exposed to a lot of different issues that can arise.” Is it a reactive kind of a thing?
Lacey: Yeah. Sometimes I think companies decide it’s important to have a handbook because they’re in a situation where they want to hold someone accountable for performance, for not following a policy or procedure, it’s not written out and they don’t have something to go back to and say “you acknowledged receiving this information and chose not to follow these policies.” So in those instances, those companies come back and say, “Let’s get this on paper so that the next time it comes up we have something to show that we were trying to hold people accountable and setting these rules out.”
Brandon: In today’s day and age, it seems that there are a lot of changes in the state and federal regulations. It almost seems like it’s changing dramatically. But, as a business owner, how often should you be updating the handbook?
Lacey: We typically recommend that every few years a company take a look at their handbook and ask, “What legal things in the state that we’re in have changed? What things are important to us to communicate to our employees?” I’d say every two or three years it would be good to look at that.
Then, on the other side, “What’s important for your company policies?” So things that are specific to your organization. And some organizations are in rapid growth mode. So, in those instances looking at the policy more frequently might make more sense. It’s just important that when those changes are made that those changes are communicated to employees in a timely manner.
Brandon: Now, for something that changes instantly, say a federal regulation that just passed, do you recommend that somebody internally keeps up on those changes? Or should they look out to like an employment law attorney?
Lacey: I think it’s pretty difficult, even for people tenured in HR, to stay on top of things. Oftentimes companies will have relationships with employment firms. So, attorneys and lawyers who will keep them up to date. Sometimes companies choose to outsource their HR to companies like Xenium, where we’re the ones who are responsible for really staying up-to-date on those laws. So it’s up to the company to decide how they really want to handle that. But it’s true that keeping up-to-date on all those legal changes is difficult.
Brandon: Now, on the technical aspects of the handbook, how would you actually organize it? Would you start off with maybe a letter from the owner, or…?
Lacey: We see companies do it in many different ways. I think it’s great, in my opinion, to have a message from someone of importance within your company (whether that’s your owner, president, CEO, whoever that is that really has a voice and presence in front of the employees. Pieces about values, mission, or things that set the tone for the culture are also important to include in a handbook and you see those often in the front. Other things that are important to include would be benefits. So, we typically see these in the front of handbooks more recently because you want to set the tone for employees about what they’re getting by joining this company and becoming part of this team. And more often, the legal language (leaves of absence, harassment, those types of policies) is included towards the end of the handbook. And there’s always a receipt page that we recommend including so that employees are signing off and acknowledging that they received the handbook and that they are going to abide by the rules. And that is then included in the employee’s personnel file.
Brandon: It really sounds like the handbook should not only be policy-driven but it should be very culture-oriented and unique to that particular company.
Brandon: So, it sounds like you have a ton of experience in customizing handbooks. So would you say that a fair bit of time goes into customizing the cultural part of it?
Lacey: Yes, definitely.
Brandon: In working with a small- or medium-sized company you probably work with the owner a lot?
Lacey: Yes. Oftentimes in a small- or medium-sized company we’re working with the owner or some sort of leadership team that’s really trying to make sure that that language sounds like it’s coming from their voice. So certainly there’s legal language that you can find on the internet that’s got information about leaves of absence, types of protected classes, those types of things. But, really what’s important is that the voice of the handbook comes from the company. One company is not the same as another, and it’s your opportunity to really show your new employees, and your current staff if it’s the first time you’re rolling out a handbook, the tone of the company and what you’re going to be like moving forward.
Brandon: Earlier you mentioned that companies should be looking at making updates every two-to-three years. Do you think a company should update it more often to just stay ahead of the curve?
Lacey: I think that there are some companies that choose to do that, especially if it’s something that’s really important. There were recently in the last few years updates to family medical leave and protections for employees and what that means for them. Those are important things for employees to know about.
Maybe you’re revising the whole handbook, because there are other policies that need to be updated.
Sometimes a whole handbook revision and roll-out to employees is a good idea. If it’s just one or two little things, we often see companies doing addendums. And what that typically looks like is that the new policy is printed out and provided to employees, the changes are communicated, and employees are acknowledging receiving those revisions.
Brandon: So typically, like with the addendum, you’re definitely getting employee signatures, especially when they’re policy-driven. But what about in a new-hire orientation? Do they sign something as well?
Lacey: Yes, we recommend that they do. Like I said before, this is really your opportunity to set expectations and to set goals for employees and in that new hire orientation the handbook is a way to outline what you’re all about, the benefits we have to offer, the rules, and what the company is going to hold you accountable to. And the best way to acknowledge that an employee has received and is going to abide by it is to have a receipt page that is either torn out or set separate from that handbook that they sign, date, and that is kept in their personnel file.
Brandon: I imagine that there’s a part of the handbook that a culture-oriented and that the other part is legalese. Who gets a stab at writing it? Is it a legal professional? Does the owner get a chance to write the entire thing? What do you usually see?
Lacey: It’s really a collaborative effort. A lot of the time when Xenium works with business leaders, we are going out and meeting with companies and working through the types of policies they have, their specific benefits packages, the types rules that they have, types of safety practices, all of those things that the company really needs to set specific guidelines for, that’s all part of an intake at Xenium. And what happens is a draft is created that includes policies that we’ve worked on and had legal review over the years. That draft is then presented to the business owner, president, and HR professional in that organization and oftentimes there’s a lot of back-and-forth. So everyone the organization wants to have input from, they all have the opportunity to do so.
Brandon: So let’s say you have a handbook, but something happens that isn’t in the handbook. Which I’m sure you’ve seen a lot. What would happen at that point?
Lacey: Most often we recommend that the company look at past precedents. “What have we done before this type of situation?” How have we handled it? And if it’s something that has never come up, then there is an opportunity for the company to set precedent. So, “if this were to happen again, how would we want our supervisors or mangers to handle these situations?” If it’s not in the policy, it’s difficult to hold folks accountable. If they haven’t been communicated to that they are not allowed to perform these certain actions in the workplace, it’s difficult to say “we expected you not to do this.” So we recommend that when those instances come up and you wished you had a policy, it would have made the situation much easier to handle, that’s the time to make a revision to your handbook or to create those addendums and give those employees the opportunity to see them.
Brandon: Lacey, what would you say to a business owner that feels that there’s a lot more risk to having a handbook than not having one?
Lacey: I think that’s the buzz that’s going around right now. Small- and medium-sized companies say, “I’ve never had one before and I’ve heard that it’s way more risky to have a handbook in place.” I would say that it’s very difficult to hold people accountable to policies that are just kind of “out there” and most employees know that they are supposed to follow them. When they’re not written down it’s very difficult to hold them accountable and to move forward with progressive discipline if that’s what your company wants to do. If it’s warranted. For instance, if an employee breaks a policy that most people in the company assume is pretty common sense, and the employee says “at the last company I worked at it wasn’t a problem, we were always allowed to play on the internet and on Facebook” and you don’t have a policy about that, it’s difficult to hold those people accountable, especially if it’s something that hasn’t been held accountable before or there have been instances where other people have been allowed grace and they haven’t been written up or suspended or any of the steps in your progressive discipline policy. Best practice is to have policies, to have procedures. Even for small companies small handbooks work. Something that’s communicated to employees that lets them know what you’re about and what your expectations are.
Brandon: So on the other side of that, let’s say that I’m a business owner with a few employees and starting from scratch really. What sort of things do I need in a handbook? What things absolutely need to go in it?
Lacey: I think something that is really important is your culture. Something that speaks about who you are, what you do, how long you’ve been in business, your values, your mission, those sorts of things at the beginning of your handbook are really important. There’s also a great opportunity in addressing benefits to show your new and current employees all the great things you offer and why they should stay with your organization. It helps with retention by outlining those benefits. Work rules, expectations, especially things that you have seen over the years are problems that come up quite a bit. You want to be able to fall back on a policy. Attendance is a perfect example. A lot of companies struggle with people showing up on time and being reliable. Having an attendance policy outlined in your work rules section is really helpful to hold people accountable. I would also say that if there are protections that employees are allowed under the law based on your company size, like for instance Oregon Family Medical Leave, domestic violence leave, harassment, ADA protections, all those sorts of things are really important to include in a handbook. It shows the state and governmental agencies that you are in compliance and that you are a well-intentioned employer. And then a receipt page, showing that employees acknowledge that they have received it.
Brandon: What do you see employers actually adding to the handbook right now? What’s really hot right now?
Lacey: What’s hot is social media and bullying. So we’re noticing that employers that had policies about computer use and internet use are really beefing those polices up and including details about social media, what employees allowed to do on their personal time that might pertain to client information, customer information, just general company information. And then what are they allowed to do in their jobs when their jobs interact with social media. So people in marketing are allowed on social media sites. What are they allowed to do in the workplace?
The other policy we’re seeing companies add are policies about bullying. Most organizations that have had handbooks in place that have been reviewed by legal oftentimes have anti-harassment policies that outline the certain protections that folks have based on protected classes and that companies will not tolerate harassment. Well something that has been coming up, and we’ve seen it in the media, we’ve seen it in schools, is bullying. So, just not being very nice at work. So companies are outlining, most recently, policies about zero-tolerance for bullying in the workplace. Those two are probably the hottest new topics that we’ve seen added most recently.
Brandon: So if HR people or business owners are looking to get started or make some updates, what should they do? What next steps should they really take?
Lacey: I would sit down with the leadership team at the company and look at what has happened recently where we wished we had a policy. So what types of instances, employer-relations issues, have come up where it would have been helpful to have a policy. Look at your employee size and really find out where you fall under the law and what protections your employees have under the law, in Oregon and federally. Then I would work with an attorney, an HR professional, or an outsourced firm like Xenium to make sure that not only does the handbook speak of the company and what you’re all about but that it’s also something that could stand up if you really needed to hold an employee accountable.
Brandon: Our guest has been Lacey Halpern of Xenium; thanks for being part of our show.
Lacey: You’re welcome!
For more information on employee handbooks contact Xenium HR at 503-612-1555 or visit www.xeniumhr.com. This post is intended as information only and is not a substitute for legal advice. Xenium HR is a professional employer organization specializing in strategic HR partnership with small and mid-sized businesses in Portland, Oregon.