By: Lindsay Wissman (Zane Benefits) August 2016

Having an employee handbook is an essential part of any employee retention Why Do I Need an Employee Handbook for My Small Business?strategy. You may be thinking that there is little time in your day to be worried about writing a handbook, but there are many ways that doing so can save you, both financially and legally. Here are some of the most important reasons your small business needs to have an Employee Handbook.

Handbooks Communicate Expectations

A major reason that a solid employee handbook is crucial to any employee retention strategy is simple: handbooks not only communicate to workers what is expected of them, but they help show new hires what the company culture is like. After all, company policies are indications of the larger personality. For example, if your handbook outlines a policy that allows employees to telecommute one day a week, new hires may perceive the company as flexible, which could carry over into other aspects of their job.

The handbook can act as an extension of your voice. You are swamped with customers and paperwork, so in order to be more efficient, let the handbook offer answers to common questions. Your employees will feel empowered to obtain the information themselves and your inbox will be less cluttered.

Most importantly, handbooks keep everyone on the same page. This is your opportunity to outline expectations, overtime regulations and policies, compensatory time rules for exempt employees, and general information that people can refer back to. Be sure to include a final page that new hires sign and return to you, acknowledging that they read and understand the handbook.

Handbooks Outline Your Benefits Packages

An employee handbook is the perfect place to outline your benefits packages. This is where you can list policies on paid time off, any retirement benefits you provide, profit sharing guidelines, group health or defined contribution plans, and any fringe benefits you take pride in. If the employee ever has questions regarding these policies, they have them in writing.

Handbooks Protect You and Your Business

Running a business can be downright frightening at times. You can dutifully follow the letter of the law and one lawsuit can cause your doors to close and your livelihood to disappear. You may assume that an angry customer would be the one on the other end of that lawsuit, but that isn’t always the case.

Employees (both current and former) have been known to sue companies for a variety of reasons. Usually these lawsuits center around discrimination or wrongful termination, but no matter what the circumstances are, you need paperwork to back you up with the lawyers. Paycor, an HR and payroll service company, believes that having a “thorough and compliant employee handbook will help to show that the organization exercised ‘reasonable care’ towards its employees.”


Employee handbooks can be a wonderful tool for small business owners’ employee retention strategies. Handbooks can protect you (as well as the employee) and keep everyone on the same page. Remember that it is important to keep this document up to date – don’t write it and then forget it exists. Revisit it once a year to be sure that your handbook is growing with your business and that your employee retention strategies still make sense.

Zane Benefits