Creating an Employee Handbook For Your Startup: What to Include and Why

Eric Mochnacz
October 16, 2023

As you scale your startup, having a strong human resources foundation is critical.  Table stakes are having an employee handbook that clearly outlines your company policies and expectations for your workforce.  Your handbook is often the first critical piece of HR documentation and sets the tone and direction for your company’s human resources function as it grows.  

The Importance of an Employee Handbook For Startup Companies

As you build your human resources infrastructure from the ground up, an employee handbook is a critical piece of your HR foundation.   An employee handbook is the centralized, single source of truth for employee information.  It outlines company policies, procedures, and expectations from the employer’s perspective while serving as a guide to employees in understanding their rights and responsibilities.  For startups, a well-written handbook helps maintain consistency across the organization, especially as you scale and your workforce evolves.  Taking a comprehensive approach to policy development from the start ensures you apply those same policies to your first employee and your fifteenth.  But, a handbook is also a living document and can evolve as the needs of your workforce and business change.  As one of your guiding documents, the employee handbook is a prime opportunity to communicate company core values, especially since it is one of the first documents an employee receives and the one they will most likely refer to during their employment. 

What to Include in Your Employee Handbook as a Startup

Although one size doesn’t fit all, there tend to be sections of employee handbooks that are universal.  You want an employee handbook to be comprehensive, but not overly complicated or stuffed with legalese.  It should reflect your company values and your commitment to your employees while outlining their rights and responsibilities and your expectations for them. 

Your Company’s Vision and Mission Statements 

There are a variety of ways a company articulates its vision, mission, and core values.  Clearly stating them in your handbook demonstrates a firm commitment to the vision, mission, and values.  How you develop policies and how your handbook is written is another opportunity for you to articulate the company’s purpose and how you demonstrate your values in business operations and the employee lifecycle.  The employee handbook is one way employees interpret how your business operates, so use it well to articulate your vision.   

What Legal Protections Employees Have 

The employee handbook is a valuable compliance tool, outlining the rights and responsibilities of the company and the employee.  It is the one-stop shop where employers and managers can go to understand the applicable laws, regulations, and expectations that influence their employment and management decisions.  For specific industries, the handbook outlines specific safety regulations and protections.  Having this information in the employee handbook demonstrates the company is compliant and the employees are confident the company is mindful of their safety.  

Compensation and Hours  

The most important thing about compensation is employees understand what they need to do to get paid and how and when they will get paid. Clear compensation guidelines remove any confusion about your company’s pay practices.  Although your handbook won’t outline the company compensation structures and individual employees, it should outline specifics around working hours and pay schedules.  Articulate what you consider the work week, because when your work week ends and begins influences overtime pay for non-exempt employees, especially if you have employees who work on the weekends.  Outline your standard work hours of when you expect people to be in the office or online and available to work.  Other things to include in your handbook under the compensation and hours section are your overtime policies, pay increase schedule and criteria, approach to breaks and meal time, attendance and punctuality policies, and time tracking expectations.

Expectations For Conduct in the Workplace 

If you look at your employee handbook as a behavioral guide for your employees, then it should be the repository for behavioral expectations.  And more often than not, how you expect your employees to act is directly tied to your core values and company mission.  Although employees should be able to clarify behavioral expectations with their manager, the handbook is a tool for them to quickly understand what’s expected of them when it comes to their workplace behavior.  From an employer perspective, clearly outlining conduct expectations makes it easier to address behavioral issues if they arise, especially since the expectations, and consequences, are detailed in the employee handbook.  Your handbook should also always include your anti-discrimination and harassment policy, with most (if not all) states requiring it to be included in your handbook. 

Discipline Policies

What happens when an employee violates your conduct policies?  It shouldn’t be a surprise for the employee when they are held accountable and the manager should have clear guidelines on how to address discipline issues.  That’s why having a detailed discipline policy in your employee handbook is critical.  Managers know the steps to address policy violations and employees aren’t confused or surprised when they are held accountable.    

Employee Benefits 

Employees want to know what benefits your company offers.  Employee handbooks outline time off policies, including paid holidays.  Although you may want to reference the other benefits entitlements your company offers, like health benefits or 401k, since those may change over time, don’t get too granular about the mechanics of the plan.  Talk about the plan, eligibility periods, and then refer the employee to the summary plan documents HR traditionally has on file.  Remember, the employee handbook is a guide for employees and employers, so having this information readily available equips everyone to quickly understand what benefits they receive as part of their employment.   

An Outsourced HR Consultant Can Help With Your Employee Handbook

As a startup, you may think an employee handbook is all you need from your outsourced HR consultant.  But reframing it so the handbook is seen as the first step in building your HR infrastructure means it’s the launching point for the interim relationship with your outsourced HR.  We help you develop the best policies for your company, implement them, and adjust them as your company scales – and make sure your employee handbook keeps pace with growth.  Let’s talk if you’re ready to build a substantial HR function with expert HR consultants from the ground up, starting with a comprehensive employee handbook!

Photo Credit – Photo by Beatriz Pérez Moya on Unsplash

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