What's an Employee Handbook and How Do I Create One?

Helen Jackson

Last updated on September 17, 2024

Creating an employee handbook might sound like a lot of work, but really, it’s just gathering relevant policies and documents you might have shared with new starters anyway.

And although your to-do list might be as long as your arm, we highly recommend adding ‘create a staff handbook’ to that list. It helps set standardised expectations across your organisation for all employees, regardless of their level.

Employees deserve to feel in control, and this handbook will give them access to all your important policies and procedures. This ultimately saves your HR team time because staff can now self-serve (no more fielding basic questions!).

What is an employee handbook?

Also known as a staff or ‘workers handbook’ this handy resource is both for new starters and existing employees and outlines company and HR policies, codes of conduct, benefits, and procedures (i.e. employee performance management reviews). It’s also the perfect place to cover your company’s values.

A staff handbook introduces much-needed standardisation so every employee knows what’s expected of them, empowering them with important information about how the company works and how to properly follow procedures.

Is it a legal requirement to have an employee handbook in the UK?

No, a staff handbook is not a legal requirement for UK businesses. Although, some of what you can include in your handbook you are legally required to share with employees, including data protection and privacy policies, disciplinary and grievance policies and equality and diversity policies.

What is the difference between an HR policy and an employee handbook?

Where HR policies govern more globally how a company employs and manages its people, a staff handbook focuses on the employees themselves - how they should work and engage with their company.

An HR policy covers guidelines relating to a wide range of HR functions, such as hiring, training, compensation and providing leave. Your policy should also provide a clear idea of how your company will treat its people and its property. HR policies are very closely tied to legal compliance and serve to protect your company.

An employee handbook, on the other hand, provides an overview of some of these policies and how your people should collaborate and work together to maintain a safe and positive work environment. It should be made accessible and written in a way that’s easy for all employees to understand.

Six benefits of having an employee handbook

Clear communication is a big part of retaining employees. You want your employees to feel motivated and informed. But you can’t deliver that unless you clearly communicate your expectations in the first place — they have nothing to guide them!

Here are five reasons you should consider creating a staff handbook template.

1. Explains company values

Starting a new job can be daunting, but equipped with an employee handbook, the new starter can learn all about your company, its values, culture and mission immediately. Having this resource to hand means employees can slot right into the culture, feeling comfortable and included in their new surroundings.

2. Employees know what’s expected of them from day one

Research shows that new employees don’t fully settle into their roles for four months. But you can help by making their transition smoother with access to a staff handbook. From the handbook they’ll understand codes of conduct, company policies and general expectations, so there are no grey areas to navigate.

3. Outlines employee benefits and perks

All employees will be desperate to understand the benefits they can enjoy, and you can include them all in your workers handbook — e.g. annual leave, perk rewards programmes or gym memberships. Making sure employees know what they’re entitled to can help increase employee morale, retention and job satisfaction.

4. Employees feel better prepared and empowered

Giving employees instant access to all this important information empowers them to make decisions and follow procedures built to make their workplace experience better. Without access to this information, your HR teams might find themselves fielding tons of questions, draining time and resources. This way, employees self-serve - who wants to wait around for a response from HR?

5. Policy enforcement is standardised across the organisation

Having every employee book time off the exact same way, or following the exact same grievance or disciplinary process helps keep HR tasks streamlined, making it easier to pinpoint patterns or issues should they arise and keeping every employee’s experience the same. This is particularly useful when onboarding new managers, they can adhere immediately to these processes, hitting the ground running.

6. Decreases legal risk for the company

Having documented policies and procedures can help demonstrate your organisation complies with UK employment laws, which can help you defend yourself should you come up against any potential lawsuits.

How to structure your employee handbook

If you’ve never written one before — where do you start? Here’s a rough employee handbook template tailored to the UK.

Start with an intro

This could be your employee’s first interaction with the company, so you’ll want to welcome them to the team and give them a quick overview of what they can find in your workers’ handbook.

Talk about your team culture and company values here, too. Give them a complete overview of the company’s history so they feel well-informed when they step into your office for the first time.

Cover the employment basics

Although some of what you include here might be already in their contract of employment, it’s good to outline exactly what they can expect from you as an employer.

Cover things like probationary periods, performance reviews (i.e. their frequency and the process), dress code (if you have one), core hours and flexible working policies (in line with the new flexible working bill) or remote work policies.

Employee benefits and compensation

Although the contents of the job itself is important, understanding their benefit entitlements are just as vital. Clearly outline your:

Overtime policies
Pay frequency (and how they'll get paid)
Let them explore your employee portal, how to get on it, what it includes etc.
Workplace pension scheme
Statutory leave including MAT pay and adoption pay
Annual leave policies and how to book/request time off
Any perk schemes you're part of and how to access them

Your organisational structure

When you’re brand new (or even just a few months in), you don’t know who to raise certain problems with. So knowing the hierarchy, who reports to who, who makes up the stakeholders etc. Can be very useful information for any employee.

Consider including a diagram of your organisation structure, so new starters can see a visual representation of all your departments and who heads up each.

Health and safety procedures

In this section, share all your health and safety procedures, so things like what to do in case of emergencies e.g. fire. Share workplace safety guidelines here, too.

General company processes and policies

This is where you’ll want to include important company procedures, including:

Disciplinary procedures
Equal opportunities policy
Return to work processes
UK paid sick leave policies
Onboarding processes
Performance review processes
Grievance procedures
How to give your resignation

All these procedures are vital for both standard level employees and management. When a new manager starts, they can quickly sift through the document to learn how to oversee a return to work meeting, for example. These are important documents that employees should always have easy access to.

Four best practices to follow when creating a UK employee handbook

Ready to create your employee handbook? Here are four best practices you should keep in mind!

💡 Don’t speak in technical terms or jargon. Not only is jargon only familiar to those who already work with you, it makes for a frustrating read. Keep your language simple and your paragraphs short.

💡 Get others involved. Liaise with different departments when creating it. You might not know the ins and outs of every department, so approach department heads and ask if there are any processes or policies they feel are important to mention in the handbook.

💡 Keep your layout clear. Lay out your handbook using clear headings to help new starters navigate through the document. The document could be pretty extensive by the time you’ve finished with it, so make it easy to flick through and understand. Consider making this document digital and ensure it’s searchable for keyword phrases so it’s easy for employees to find exactly what they’re looking for.

💡 Don’t just create it and say DONE! This is a document you’ll need to consistently update. Perhaps there’s a new department to add to the structure, or you change your annual leave policy to include birthdays off. Whatever the changes, make them promptly so the document remains as up-to-date as possible.

How PayFit can support the implementation of your employee handbook

We have lots of great payroll and HR features to help you manage and deliver on the details within your handbook.

Automatic leave calculations. Someone goes on holiday? No worries. Our system automatically calculates holiday pay and makes adjustments to the employee payslip on your behalf. No admin tasks here.

Employee portal. Employees can log into the PayFit employee portal and access all payslips digitally, manage and request annual leave effortlessly and learn more about where their money goes with our helpful payslip breakdown.

Manager approval workflows. PayFit allows you to create specific leave approval workflows, so any time employees request leave, they receive a notification to sign off or reject, streamlining the process of booking leave.

Compliance with UK regulations. Align your policies with the UK regulations automatically through PayFit to remain compliant, always.

Track trends with PayFit’s reporting capabilities. Quickly identify leave and sickness patterns with PayFit’s HR reporting features. Accessing accurate HR data means your HR teams are empowered to make informed decisions based on resource allocation.

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