What Is a Company Handbook?
A company handbook is a document that sets out your workplace policies, procedures, and expectations. It acts as a reference point for both employers and employees, helping everyone understand the day-to-day running of the business. This often includes policies on booking holidays, reporting sickness, dress code, performance management, raising grievances, and health and safety.
While not a legal requirement, a well-written handbook can offer clarity, consistency, and protection for your business.
Importantly, a handbook is not a contractual document and should not be used in place of an employment contract. A contract of employment is specific to each employee and covers individual terms like job title, salary, and hours. A handbook, on the other hand, applies to all staff and outlines general practices, such as sick pay, referral schemes, or benefits beyond statutory minimums. These can be changed as business needs evolve and do not usually form part of the employment contract.
The Pros of Having a Company Handbook
1. Clarity for EveryoneA handbook sets out clear expectations around behaviour, holiday booking, sickness reporting, timekeeping, and performance. When everyone understands the rules, it reduces confusion and ensures consistency across your team.
2. Legal ProtectionProviding a handbook with clear policies—such as on bullying, whistleblowing, and health and safety—demonstrates that you’ve communicated your expectations to all staff. In the event of a dispute or tribunal, it shows that you operate a fair and transparent working environment.
3. Smoother OnboardingNew starters can settle in faster when they understand your expectations from day one. A handbook helps establish a culture of fairness and professionalism and supports good performance from the outset.
4. Reinforces Company Culture and ValuesA handbook is a great place to define what your business stands for. When your values are clearly articulated—and linked to appraisals, recruitment, and development—they help attract and retain the right people.
5. Saves TimeInstead of repeatedly explaining the same processes, a handbook acts as a go-to guide. All key information is in one place, saving time for both managers and employees.
The Cons of a Company Handbook
1. It Can Be Too RigidWhile consistency is important, small businesses often need flexibility. Not every situation fits into a policy, and applying discretion on a case-by-case basis is sometimes more effective. A too-rigid handbook can become a barrier rather than a guide.
2. Risk of Being OutdatedEmployment law changes frequently. If your handbook isn’t reviewed regularly, it can quickly become outdated—and potentially misleading. Multiple or conflicting versions can create confusion among staff.
3. It Can Be OverwhelmingLong, formal handbooks often go unread. If the content isn’t clear or engaging, employees may not absorb or follow it. Without reinforcement, even the best policies can be forgotten.
4. False Sense of SecurityA handbook is a support tool, not a substitute for good management. It doesn’t replace conversations, coaching, or leadership. Relying on the document alone can lead to issues being overlooked.
How to Get It Right
If you’re considering introducing a handbook, keep these tips in mind:
- Keep it short, relevant, and user-friendly- Focus on essential policies, don’t try to include everything- Avoid jargon or overly formal language- Review it at least annually to keep it up to date
For smaller businesses, a mini handbook or welcome guide might be more suitable than a full, detailed manual.
Conclusion
A company handbook can be a valuable asset but only if it’s clear, current, and actually used. It should support your team, not overwhelm them.
Not sure what to include or whether you need a handbook at all? Let’s chat, drop me an email at bev@bdhr.co.uk and I’ll help you create something that works for your business and your people.
