When it comes to running a business, an HR policy is as important as your marketing strategy and financial policy, but it’s so much more than just a set of rules and regulations.

If handled correctly, the policy can help define your business, inspire staff, and show transparency on what they are working towards, while also giving you the ability to take action where it is breached.

What is an HR policy?

The point of an HR policy is so that employees know what’s required of them, ensuring everyone in the workforce is following those guidelines.

It typically covers two main areas: managing business risk, such as data protection and privacy issues, health and safety or working from home, and how to help employees do their job, such as managing absence, days off sick, holiday entitlement or ensuring business continuity.

It is, simply put, an umbrella term that includes existing rules on areas including but not limited to:

  • Recruitment
  • Payroll
  • Equal opportunities
  • Diversity
  • Rewards and benefits
  • Maternity leave
  • Working from home
  • Disciplinary
  • Data protection
  • Holiday entitlement

How can you create one?

First and foremost, you should ask yourself what your small business is trying to achieve. What are your goals?

HR becomes progressively valuable as you grow, with expectations growing alongside it, along with the development of a good company culture.

For example, before the pandemic and introduction of furlough, many companies hadn’t issued staff contracts. This meant that everything was left unwritten, creating issues when trying to obtain furlough from the Treasury.

Keep an eye on changes

As well as simply revising statutory legislation, which alters every two or three years, it is even more important to note how your company culture itself has changed.

Having an HR policy in place is vital for any small business, and when it comes to creating one, bear in mind that it’s not just about keeping up with changes in employment law, but it is also a means to identify the very purpose of your company.

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