The 3 Essential HR Foundations Docs Every Business Should Have

At Now Actually, we always say that no two businesses are the same. Why? Because no two companies have the exact same team members and management, regardless of what industry they’re in.

Your business doesn’t have the exact same mission and vision, values and culture as any other company. In saying that, however, there’s a common thread going through all successful businesses: a stable foundation in Human Resources. 

So how does a business get a stable foundation in HR? By having the right documents in place. Having the 3 essential HR foundations documents gives a business owner or employer peace of mind when it comes to compliance, and confidence that they’re setting their business up for success.

Essential HR Foundation Documents

The 3 essential HR foundation documents are ones that we, from our experience in working with businesses, believe are crucial for every company to have. 

Employment contracts, updated position descriptions, and employee handbooks are the 3 essential HR foundation documents for any business. These documents form the backbone of HR in a company and help set them up for success. Time and again, we’ve seen how simply having the right documents and processes goes a long way towards setting a business up for success.

HR Foundation Document #1: Compliant Employment Contracts

Every business owner or employer is familiar with employment contracts. They toutline the T&Cs of employment and are one of the foundational documents  every business with employees needs. 

A compliant employment contract should have the following core elements like job details, compensation, work hours, terms of employment, and confidentiality and non-compete clauses clearly outlined. 

Here are 3 advantages of having compliant employment contracts:

• Ensures legal clarity and mutual expectations
  Employment contracts set expectations for employer and employee alike. Having clearly defined terms help prevent misunderstandings in the employment relationship.
  
• Protects confidential information
  Employment contracts have rules to protect a company’s private information and stop it from being used without permission.
  
• Encourages stability in a workforce
  Clear and fair employment terms contribute to employee satisfaction and may enhance retention rates. When employees understand their rights and obligations, they’re more likely to feel secure. Losing good talent can be expensive and time-consuming for businesses of any size, and it’s in the best interest of any business to retain good talent.
  

Case Study: Creating Employment Contracts for a Niche Industry 

Now Actually worked with a client who needed to hire a new employee, and needed a compliant employment contract for the potential new hire. 

The business was in a niche industry, and therefore needed plenty of research when it came to what the employment contract should contain. Only a handful of businesses like this existed across the country, and they are very specific in what they do and offer to their clients. 

Now Actually researched the best way to establish the employment relationship. Advisors consulted with the Modern Awards, the NES, and association guidelines.

The team created an agreement that was fair and equitable for both parties, and the business was able to successfully onboard a new employee.

As a result, the business got straightforward and tailored advice that was also compliant with the law. 

Read what Olivia Soha of Uncovery Ptd Ltd had to say about their Now Actually experience here.

HR Foundation Document #2: Employee Handbook

The second essential document is the employee handbook. 

An employee handbook is tailored for your business. It’s written to address the specific needs of your business, as well as the industry you operate in. One organisation’s employee handbook isn’t interchangeable with another’s. 

Here are 3 advantages of having an employee handbook:

• It promotes transparent communication
  Having an employee handbook ensures employees know the organisation’s values, standards and rules.
  
• It promotes compliance and mitigate risks
  Employee handbooks contain workplace policies and safety regulations for employees. Having a handbook in place fulfils your obligations as an employer by ensuring that staff are aware of the legal consequences of not adhering to these policies.
  
• It gives new employees an understanding of the business when they start
  A handbook is a great resource for a new employee. It’s a reflection of a business’s commitment to ensuring that new hires know all about the company right as they start.

HR Foundation Document #3: Position Descriptions

The third document that completes the set of HR essentials is an up-to-date position description (aka, a PD). PDs outline the roles, responsibilities, duties and requirements for each job in an organisation.  

Here are 3 advantages of having up-to-date position descriptions:

• Provides clarity on roles
  Updated PDs provide clarity on each employee’s roles, responsibilities and duties.
   
• Aids in Performance management
  PDs can support you to set measurable goals and expectations, serving as a roadmap for employee performance and growth.
  
• Adapting to changes in the business or employment law
  Job roles and responsibilities may evolve over time due to changes in technology, organisational structure or industry trends. Keeping PDs updated allows companies to adapt to these changes, ensuring that roles remain relevant and effective. Updating a PD could be as simple as reviewing it once a year, or even in conjunction with performance reviews. We also recommend that a PD is reviewed when hiring to ensure it’s still applicable to business requirements.

How strong are your HR foundations?

We explained the 3 essential HR foundation documents businesses need in this article and why they’re the basic HR building blocks of any company. Whether you’re a small business with 5 employees or an enterprise with more than 200, these documents are crucial in ensuring compliance with employment law and setting you up for success in business. 

If you need help crafting an employee handbook, updating your PDs  or making your employment contracts compliant,you’ve come to the right place. Contact us today.