How an employee handbook can help with recruiting

What’s an employee handbook?

Tyler: The topic this week is employee handbooks. This has been on my mind because we redid our whole employee handbook this last spring leading up to hiring some new people. So I rewrote it and put a lot of thought into it, but I wanted to talk through it with you. I'd like to cover things like what should actually go into it. And one thing that I hadn't thought of prior to now is when and how should the information in an employee handbook be communicated. What we used to do is everybody would start working here, and then we'd give them the employee handbook and say, "read this." And more and more, I'm realizing a lot of this information might be relevant earlier in the [hiring] process. I'm interested in your thoughts on how this should work. 

Rick: Yeah. When I hear employee handbook. I associate it with zero value to employees and 100 percent cover your ass (CYA) for the company. I don't think that's what you're talking about here. So what do you mean by employee handbook?

Tyler: Fair enough. Maybe there's a different term for this that at the end of this podcast we will have figured out. What I mean is that, over the years, we have amassed a lot of institutional knowledge on how we do things and our philosophy on things. Plus, there are a lot of policies and stuff like that. I've actually recently split it up into three things. One is company philosophy. One is information about how compensation and benefits work. And the third one is all of the various policies like: You want to take a vacation day? Here's how you do it. You want to use the nap room? Here's how you book it. That type of stuff.

Rick: And where does the CYA, or cover your ass stuff, fit in?

Tyler: We probably do that less than a lot of companies would. We do have random stuff people sign when they start like, "acknowledge that we're providing all of the benefits required by law" and stuff like that. So I think we're covering our ass to some extent, but probably not as much as some companies do. 

Rick: So let's call that a fourth bucket, which is different than unique policies to the company. So, one is philosophy. Second is compensation and benefits. Third, policies. And fourth, CYA. 

Tyler: I'm least interested in CYA because some lawyer writes that up, and no one reads it and no one cares. I'm probably more interested in the other three. What's the right information to include? And the thing that has really been on my mind is, "when?"  Should this information be made 100 percent public and used as a marketing tool for recruiting?

Rick: I 100 percent think so. Yes. I'll give you my experience with employee handbooks. I'm unique in that, at my last company, I was there for twelve years. I've never experienced another employer, but we went through lots of iterations of the company as you well know. At first, I was the 13th employee of the company. Then, I was one of 35 employees. Then, we went down to four people. You, of course, were one of those four people. Then, we went up to 60 something 70 employees. Then we went back down to 35. Then, we were down to 20. Now, I don't even know how many people are there. And every time there was a big switch, someone at the board would say, "we need a new employee handbook." It wasn't until probably three years ago that I really took ownership of what an employee handbook was. Before that, and I think this is what most people think, I believed employee handbooks were CYA material. My experience as an employee getting an employee handbook was: "This is unhelpful. I can't understand the language. This seems like something that you're trying to screw me with."

Tyler: Yeah. When you say CYA, it's so employees can't sue you and [claim] you didn't provide some piece of information. You'll be like, "look you signed this thing that said we gave you this document."

Rick: So, over the years we had different versions of this. One was there from before I got there. Then, you know, the board was like, "we have to have an employee handbook". I was like, "why?" And they were like, "because we have to cover our asses," you know. And, I said, "OK". So we hired some third party to come in and build an employee handbook that provided no value because they had no idea about our business. So it was, again, all these new rules that I didn't even really care about honestly. It created more problems. Every time we rolled out an employee handbook, it created more problems than it solved. The last time I let someone else do this was probably four or five years ago where we had a really really smart senior vice president who knew that employee books were important.  So, she brought a third party in. I was uninvolved in the building of the handbook because I didn't care about it. I didn't think it was a priority, but I was listening to the person who was more experienced and smarter. And she was right. But, I think that an employee handbook that doesn't have your imprint on it [as the CEO] could be a really bad thing because it can send the wrong message. But the point here is that when that handbook came out, I saw it I was like, "holy crap this could provide so much value because it did touch on the philosophy stuff and it did touch on the things that employees needed to know to be successful at the company. So, I actually wrote my own handbook after that. And now the employee handbook, to me, is the most important tool of a CEO to communicate to their employees consistently and clearly. 

Tyler: OK. So at the beginning of this you said, "you think it's a CYA tool." You used the term employee handbook and just kind of redefined what that means to you and then thought of it as a really high priority for you. 

Rick: Absolutely. It went from a high company value tool with low value to employees to a very high employee value and high company value tool. 

Tyler: Once you decided to take ownership of it and decided this is going to be really valuable for employees, what did you put in there and did you get any feedback on it? 

Rick: I don't know how helpful my iterations are gonna be because I would say I learned more about what not to do than what to do. 

Tyler: I think those are the most valuable lessons. 

Rick: Well, I think you've done this well for a long time. When I started thinking about this, and I don't know if you remember this, but I said, "hey Tyler, can you send me your employee handbook?" Do you remember sending that to me? 

Tyler: Yeah. 

Rick: [Your handbook] was actually really useful. Once I realized this employee handbook thing was a good thing and not a bad thing for employees, there were a couple of companies that I looked at it [as examples]. I looked at yours. I looked at Basecamp’s [employee handbook], who shares it publicly. 

Tyler: Yeah, there's is on GitHub, and you can just read the whole thing.

Rick: So I looked at [Basecamp's] and I thought theirs was good, but it was a little bit different than the culture I wanted to build. And then I looked at yours, and I thought yours was really useful it. It was in a Google Doc. It was twent...