What, exactly, is the difference between an employee handbook and a human resources (HR) manual – and does your organization need both?
It’s a good idea for companies to develop both an HR manual and an employee handbook. Even though they cover many of the same topics, these documents have different purposes.
Different readers, different goals
It can be helpful to think of your employee handbook as the “what” of your company culture and the HR manual as the “how.” With an employee handbook, the goal is usually to:
- Communicate company policies.
- Set expectations.
- Reduce potential liability.
- Give new employees a strong start with your company.
A human resources manual, on the other hand, is written for the HR department, leadership and managers.
Its purpose is to outline the key processes behind your organization’s policies, expectations and business operations. The goal is to ensure that your policies are implemented consistently and in compliance across your organization.
For example, your employee handbook might outline your organization’s expectations for employee conduct. Your HR manual would explain the process for dealing with employees who violate the code of conduct.
Or if your handbook outlines your employee incentive programs, the HR manual might cover exactly how those incentives are delivered.
An HR manual can reduce liability.
The purpose behind the HR manual is to ensure that your organization’s employee-related practices are fair and consistent across the board. A well-written HR manual will offer detailed guidance for managers based on compliance requirements.
For example, your company’s employee handbook may include your policy supporting employees who need to pump breastmilk at the office. However, your HR manual would include information about applicable laws and requirements.
That relieves your managers of having to figure out how to interpret and implement the policy. It also ensures that your policy for nursing employees is applied consistently.
Human resources guides can make the employee handbook more usable.
Every employee issue, whether it’s a request for family leave, remote work or something else, will be a little different. So, another benefit to having an HR manual is that you don’t have to outline all possible variations of each potential issue in your employee handbook.
Instead, you can outline your policies and general scenarios, and then refer employees to talk with HR or their manager about their specific situations. That keeps the employee handbook at a manageable length, so it’s easy for employees to find the information they need.
When does an organization need an employee handbook and an HR manual?
The 50th employee is commonly thought of as a starting line for implementing employee handbooks and HR manuals. That’s because 50 employees is the trigger for compliance with federal employment regulations such as:
- Employer shared responsibility under the Affordable Care Act (ACA)
- Family Medical Leave Act (FMLA)
- EEO-1 reporting for companies with federal contracts
Some states and local governments have their own laws that affect employers with 50 or more employees, too. So, it’s crucial to have your HR manual and employee handbook in place to ensure compliance across the board.
However, there’s no need to wait for that fiftieth hire. There are benefits to beginning to build your HR manual and your employee handbook as soon as possible.
Creating these documents when your company is just launching, or while it’s still small, allows you to be proactive about shaping your company culture. The handbook sets the tone for your organization by outlining your policies and expectations.
At the same time, the HR manual sets out procedures to make sure those policies and expectations are handled consistently and in compliance with employment laws from the very start. As your employee policies expand and become more detailed, your HR manual will grow along with it to support those changes.
Having your policies and procedures documented as you grow can make the shift to federal compliance requirements easier when your company hires employee number 50.
Where to start with your HR manual and employee handbook
If your organization is just getting started with both of these documents, it may be most efficient to start by working on your employee handbook and then building the HR manual to support your handbook policies.
If you already have an employee handbook, you may want to review and update it before starting to write your HR procedures guide.
This approach allows you to focus on your company culture goals first and develop policies to create and sustain that culture. When those employee-facing policies and expectations are written down, you can use them as stepping stones to build up your HR procedures and infrastructure.
How often should you update your HR manual and employee handbook?
It’s important to update your organization’s policies and procedures whenever new employment laws that impact your business take effect. Even if there’s no new legislation, it’s wise to review and update your HR manual and employee handbook at least every two years.
Those reviews give you a chance to make sure that your policies – and how you implement them – are still relevant to your business goals and supportive of your culture. Other triggers for updating your employee handbook and HR manual include:
1. Changes in upper management
When your company’s leadership changes, the new team may set a fresh course for the company culture, including new policies and practices.
Updating the HR manual and employee handbook as soon as these changes are announced can cut down on confusion and make the transition to new leadership smoother.
2. Changes in office location
Because many states, cities and counties have their own employment regulations, it’s wise to review your HR manual and employee handbook whenever your company relocates. This also applies when your company expands into new regions, to help you stay compliant in every jurisdiction where your company operates.
3. Development of new processes
Is your company implementing a remote working policy? Allowing employees to bring their dogs to the office? Converting a conference room to a lactation space for nursing employees?
Updating the HR manual before any new process takes effect can help managers prepare to answer employee questions accurately and oversee the new programs consistently. Updating the employee handbook as new programs roll out can cut down on the number of questions employees have for managers, too.
Learn more about creating processes and procedures that support your company’s culture and mission. Download our free magazine: The Insperity guide to leadership and management.