An HR policy is a crucial aspect of any business, alongside marketing and financial strategies. However, it is more than a mere set of rules and regulations.

When properly implemented, it can define your business, inspire your staff, and communicate transparency on goals and objectives.

What is an HR policy?

The main purpose of an HR policy is to provide clear guidelines to employees, ensuring that they understand what is expected of them.

It typically covers two primary areas:

• Managing business risks, such as data protection, privacy issues, health and safety, and working from home
• Helping employees do their jobs, such as managing absence, sick leave, and holidays, and ensuring business continuity.

The policy includes existing rules on recruitment, payroll, equal opportunities, diversity, rewards and benefits, maternity leave, working from home, disciplinary procedures, data protection, and holiday entitlement.

How to create an HR policy?

When developing an HR policy, the first step is to identify the goals of your small business. HR policies become progressively valuable as a business grows, and it’s essential to consider the development of a good company culture.

For instance, before the pandemic and the introduction of furlough, many companies did not issue staff contracts, leading to issues when trying to obtain furlough from the Treasury.

In addition to keeping up with statutory legislation changes that occur every two to three years, it’s crucial to monitor the changes within the company culture itself.

Having an HR policy in place is vital for any small business, and creating one goes beyond keeping up with employment law changes – it’s also a way to identify the purpose of your company.

Do you need support improving your HR functions in line with your accounting and payroll procedures, please get in touch.