The ROI Of An Employee Handbook

Mindy Flanigan
September 19, 2011 — 2,315 views  
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Question #1, how much does it cost? Well, that depends. Books or software can run anywhere from $50 to $100. Then you have to do the work yourself or delegate to an administrator who may not know what is or is not appropriate content. As the business owner you probably know the basic policies and practices you want current and future employees to follow. But do you know what labor laws you are required to comply with, and what optional policies might benefit your organization? Would it be more efficient or effective to hire a consultant? Experienced HR Consultants run from $80 - $120 per hour, and legal counsel costs can tend to run much higher than that. So, is the cost worth it? YES! Here is why:

Time is Money

First, let's evaluate how much your time is worth. If you or other Senior Managers, who handle day to day employee questions or challenges, also spend time on revenue generating activities, such as sales or business development, it is likely that your time is worth at least $100 per hour. So, if you spend just 15 minutes, 4 times a month answering the same company policy questions over and over, that could otherwise be answered by an employee handbook, you are losing $100 a month, or $1200 a year. An employee handbook project may initially cost $800, but in just 1 year in this scenario, you would be saving $400.

Consistency and Accountability

There is no better way to create an equitable, non-discriminatory organization, where employees are held accountable for their conduct and performance, than through the implementation of a compliant and thorough employee handbook. It tells your employees the rules, and provides a roadmap for managers and supervisors on how to handle policy violations, performance concerns, and other employee management challenges. This roadmap will save you time and money; allowing you to comfortably delegate to your supervisors. Without an employee handbook in place, it is likely that you would be called on to address an employee management concern; perhaps just once a month, at 30 minutes per session. But wouldn't you rather save the $600 of your time for more productive activities?

Wage and Hour Guidelines - Cost of Overtime

Do you have hourly employees who are bleeding you dry in unnecessary overtime? Do you have to pay them if the overtime wasn't approved? Well, yes, BUT, why not let a policy in your employee handbook address how to handle the matter? The compensation section of your handbook should not only include paycheck and payday information. There should also be a very clear policy on non exempt overtime, and that supervisor approval is required before working overtime. If an employee continues to violate that policy, it is grounds for corrective action, including termination, if repeated.

Employee Conduct and Performance

Did you make a bad hiring decision? Has a complaint about Harassment or Hostile Work Environment landed on your desk? Whatever the challenge, don't delay in correcting the situation, and taking appropriate action. An employee handbook should always include a section on standards of conduct, clearly state zero tolerance in regards to harassment, and outline your right as an employer to correct the situation with the appropriate disciplinary action, up to and including termination. Let an employee handbook give you peace of mind that you can trust your supervisors to handle any type of misconduct properly. A charge of discriminatory treatment from the Equal Employment Commission, or a complaint of Harassment, is a huge hassle and can be very expensive. The contents of your employee handbook are your best assurance and best defense that a situation has been handled in a fair, consistent and compliant manner.

Get a Signed Acknowledgement!

Addressing employee misconduct or poor performance is never easy. Often dreaded and avoided by those of us who don't like confrontation. But that underperforming employee may be costing you money, directly or indirectly. If the situation has been properly addressed and documented, your employee handbook has a policy regarding conduct, performance and discipline, the employee signed the acknowledgement, and the problem hasn't been resolved or continues, don't be afraid to terminate! When you do decide to terminate, you don't want the employee collecting unemployment benefits? Protect yourself from an unemployment rate increase with good documentation and a signed Employee Handbook Acknowledgement.

In conclusion, you may also want to consider an employee handbook in order to better communicate attendance standards, update your Email and Internet Use policies, add a Privacy Policy, or amend your Family and Medical Leave information to include Military Leave changes. Whatever the reason, the costs of creating or updating an employee handbook are far outweighed by the return on investment.





Mindy Flanigan

Inspiring HR, LLC

Mindy Flanigan is a 20 year Human Resource Management Professional, PHR certified through the Human Resource Certification Institute since 2002. As the founder of Inspiring HR, LLC she is dedicated to the success of small businesses.