Employee Handbook Review: Top 5 Pitfalls

Employee Handbook Review: Top 5 Pitfalls

Check out these 5 pitfalls small businesses and HR departments should avoid when creating or reviewing employee handbooks in 2021.

Creating and deploying a clear and concise employee handbook is one of the most important jobs for human resource departments and small businesses. The goal of an effective employee handbook is to provide constituents with clarity, guidance, paths for communication, and overall direction during their employment period. Creating a concise employee handbook can help a small business in many ways including communicating formalized policies, promoting equality, improving onboarding, outlining company culture, and saving time, long-term.

According to a recent study, 87% of small businesses, sized 10-200, have employee handbooks. Organizations investing time and resources into employee handbooks should consider the following 5 pitfalls when creating or reviewing handbooks in 2021.

Pitfall #1: Outdated Policies and Procedures

Although the majority of small businesses have a handbook on file, many do not consistently review this resource and update it to match current policies and procedures. According to an article published by the Society for HR Management, SHRM, employee handbooks need to be reviewed, at minimum, on an annual basis. Frequent review can help a small business optimize its handbook and maintain both federal and state guidelines. Stephanie Peet and Timothy McCarthy, attorneys with Jackson Lewis in Philadelphia, recommend that small businesses review employee handbooks midyear, to stay ahead of changes to labor and employment laws on an ongoing basis. Finally, it is key that organizations alert employees anytime an update is made and have them sign an acknowledgment of receipt.

Many small businesses do not have the bandwidth or resources necessary to review employee handbooks, and other important HR documentation, frequently. Taskly, an on-demand outsourced HR solution, can help by completing HR tasks for small businesses at an affordable cost.

Pitfall #2: Lack of Specifics, Too Broad

An employee handbook is an instrumental tool for both organizational staff and stakeholders. For it to be effective, this resource should contain specifics on policies, procedures, and further communication. Being too broad can negatively impact the clarity of an employee handbook. Organizations should focus on communicating a clear path for employees to follow, in an easy-to-understand format. The most effective employee handbooks aim to accomplish three goals. These goals are to provide a valuable resource for employees, create positive outcomes when policies are followed, and provide a concise list of expectations.

Handbooks that lack specifics, and are too broad, can misdirect organizations away from these goals.

Pitfall #3: Unintended Loopholes

An employee handbook should protect an organization through policies and procedures, and provide clarity and direction for employees. Outdated and misguided handbooks can lead to unintended loopholes and confusion. To avoid this, organizations need to update and optimize this resource, train management on the accordance of policies and procedures, keep legal in the loop, and get feedback from stakeholders. A few of the most important policies organizations should be clear about include social media and data use, reasonable accommodations, codes of conduct, paid time off (PTO), vacation benefits, wages and overtime, and drug and alcohol use. These policies and procedures often can become loopholes if expectations and consequences for misconduct are not clear and concise.

Pitfall #4: Not Providing Job-Related Specifics

One of the most important components of an employee handbook is the communication of job requirements and specifics. This section of the employee handbook should guide organizational staff towards fulfilling their duties and meeting job-related requirements. Even though you might think this is one of the main reasons for producing and distributing a handbook, many organizations lose sight of this crucial section when drafting content around other processes and procedures.

Organizations can use this section of the employee handbook to reinforce the code of conduct and provide staff with information on timekeeping requirements, dress code, travel policies, job-related reimbursement, pay schedules, salary increases, and more.

Pitfall #5: Not Receiving Outside Perspective

Every organization can benefit from receiving outside perspective on its employee handbook and other HR documents. Often, it is easier for the outside counsel to identify loopholes, missing policies, and procedures, and make strategic recommendations that benefit the organization.

All organizations should consider having their employee handbook reviewed both internally and externally, at least, on an annual basis.


Producing and distributing employee handbooks is one of the most important steps an organization can take to provide staff with information, expectations, procedures, process, and communication avenues. For small businesses, there are many resources available for creating and reviewing HR documentsTaskly, an on-demand outsourced HR solution, can help with employee handbook review, I-9 audits, HR information system recommendations, wage surveys, and other HR needs.

Blythe Coons is the Director of Operations for Taskly, a company providing on-demand HR expertise. Blythe has worked in B2B services for over five years with the singular goal of surprising and delighting clients.

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