Show Notes
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 twenty-five pages-ish and it went through all the key questions an employee might have if they worked at
Less Annoying CRM. So, I'm actually a little surprised that you feel the need to invest a lot of energy and time into this because you are, in my opinion, one of the better people at employee handbooks.
Tyler: Well thank you. First of all, anytime you make any kind of internal culture document, I think it's important to update it. You don't need to radically change it necessarily, but over the years, things change. For example, we recently made the decision to start thinking of ourselves as a small business instead of a startup. And a lot of the language in the old one was very startupy, so I changed a lot of that. The other thing I wanted to address was it was getting too long. The first version of it was 10 pages, maybe. And then, every year a few new things come up. We have a few new policies, a few new philosophies, and it just became giant. So, we split it into pieces. I didn't radically change the content, but it's organized differently now.
Rick: How many pages is it now?
Tyler: The office policies one is 19 pages by itself. The salary and benefits is 15 [pages], and I haven't redone the philosophy one yet, but it's currently at seven [pages].
Rick: And that's probably the most important one.
Tyler: Yeah. In addition, for every new hire, we spend maybe four or five one-hour sessions explaining all of the philosophy to them. So even if we didn't have the document, we have a different way to communicate that information also.
Using employee handbooks as a recruiting tool
Rick: Okay. It sounds like you've been updating this regularly. What problem are you trying to solve?
Tyler: I feel like this is really valuable content, and when we share it with employees after they start, in many cases they're like, "Oh wow... your philosophy on benefits really makes sense and resonates with me" or "the way you do compensation is awesome." And it occurs to me when we give job offers, they don't have any of this information. So, I'm trying to figure out if I can repurpose this content and make it really valuable in the recruiting process and not just a tool for people who already work here.
Rick: I don't understand why you don't just share this with your [potential recruits]?
Tyler: It's easy enough to do it, but I mean there's a nuance to that.
Rick: Why?
Tyler: What do you mean by share it? Email it to them?
Rick: When you're going through an interview process, at some point, you stop evaluating and you start recruiting. Right?
Tyler: Yeah. That's what I want to talk about here is like strategies around what's the right time to do that.
Rick: Why haven't you already done it? What's holding you back?
Tyler: Nothing.
Rick: Okay. Do it.
Tyler: Yeah. But, what I wanted to talk about is what is "it".
Rick: Send them the employee handbook.
Tyler: When?
Rick: Whenever you get into recruit mode.
Tyler: OK. That's vague.
Rick: Is that a clear line for you?
Tyler: No. Well, I view recruiting as a marketing and sales pipeline. If you think of how you sell a product, you've got top-of-the-funnel [TOFU] all the way through bottom-of-the-funnel [BOFU]. It generally starts out very marketing heavy and it goes towards very sales heavy. And I want this funnel to be as sophisticated as our actual customer acquisition funnel.
Rick: I totally understand what you're saying now. This is about when to start sharing information about how you operate as a company with prospective employees, how transparent are you with the world at the top of the funnel, and then how do you package the employee handbook messaging pre-hire.
Tyler: Yeah. I mean it's hard enough to get people interested in the job in the first place. If we send them 60 pages of documents, they're not going to read them. But, if you pull out the right pieces at the right time, potentially that can help move things along.
Rick: This seems like the same thing as content marketing to me. You've got your core product messaging internally you've got your core product policies and then how do you translate that into articles and blog posts and ebooks and publicly accessible content like a help section of your website that people interact with.
Tyler: So I'm terrible at content marketing. So I agree with you that's what it is. But I need a little help with thinking that through.
Rick: OK. Who does most of the interviewing and recruiting at your company?
Tyler: So everyone gets 20 percent time. Emily, a CRM coach, spends her 20 percent time recruiting. She sets up career fairs and posts job listings online and stuff. Once applications come in, she does the first round of vetting like reading the writing sample to make sure you know they're literate, and then everyone on the team is kind of involved from there on. We normally do a phone screen, which will be me for programmers or Michael for customer service people because he's the head of that team. And then, they do in-person [interviews] where potentially six or seven people will interact with them throughout the interview.
Applying content marketing principles to recruiting
Rick: I'm going to go back. I keep asking you, "why are you worried about this?" And I now understand what solution you're envisioning. What I still don't understand is, why is this important to you right now as the CEO?
Tyler: It's because we keep hiring people and every time we do, their perception of the job is much much better a month in than it is when we're recruiting, and I want to fix that.
Rick: Why? Is it because you need to hire more people? Do you need to speed up your hiring process? Why is this more important in getting more users?
Tyler: We're going to be recruiting either way as we have positions to fill. So I figured we might as well do it well. I don't think that is coming at the expense of getting more users.
Rick: Okay. This is obviously important enough for you to worry about. Is it because you want to hire more people faster?
Tyler: No. I would say, it's really about increasing the top of funnel. We're very happy with the people we've hired. But, there's nothing more important to the success of a business than hiring the best people possible. We're always going to be pushing to get better and better at hiring. There's never going to be a point where we're like, "well there we go, the people are good enough, so let's stop trying to improve here."
Rick: So it sounds like you view the recruiting funnel right now as a really important part of your stability and near-term growth?
Tyler: Yeah. And let me add one other thing. For me and for the company, increasing diversity and inclusion has been a big priority recently. Most of the people who we don't need to sell are people like us. When I say like us, I mean like me: people who come from privilege, are already kind of startupy, get how the tech industry works. We want to make people who otherwise wouldn't be applying for this job feel more comfortable with [realizing] that this is actually a thing that's accessible to me. If there is a problem, so to speak, it's trying to get a broader group of people applying.
Rick: Oh. That's cool. All right. I understand where you're coming from on this, which helps me maximize this conversation for us. First of all, let's talk a little bit about what you have in your employee handbook, specifically. And then, we can talk about how it can be repurposed. I agree with the sections, so I don't think we should talk about that. There's philosophy. There's compensation and benefits. There's policies. And there's CYA, cover-your-ass: government requirements, which vary by state. Let's not even try to talk about those.
Tyler: There's no way CYA is what you want to send to a recruit.
Rick: No.
Tyler: That's obvious.
Rick: CYA means you have to do it and it's not fun. It's actually really hard to communicate those things to employees. Sometimes, the rules that are designed to protect employees actually create more confusion and fear than protection. But, we're not going to cover that today. That's a state and federal law issue. Go talk to someone who knows what they're doing about that. The rules are different in Saint Louis than they are in Salt Lake City. For me, I think the most important part of an employee handbook is the first part, philosophy. It's an introduction to what you need to know to be successful at this company. Here's where we've been. Here's where we are. Here's where we're going. How would you break down the philosophy section?
Tyler: So first of all, you said, "where you have been" I'm embarrassed at this point. That's one of the big things we talk about when we rant at new hires about everything. It's not actually in the documentation right now. So maybe that would be a good thing for me to add. What we have right now, and I'll just run through the categories. We have: what is our mission, which is to help small businesses succeed; why [the focus] on small businesses. Our number one pillar that differentiates us from any other company is bootstrapping. So, we have a section on why we think venture capital is antithetical to our values and what we do instead. And then, we have a section on company culture which the subcategories are: the customer comes first; how to be ambitious without moving at the speed of a venture-backed company because a lot of people think, “if you don't raise money, you aren't ambitious.” It's something we have to balance. We have a section called craftsmanship, which is about how basically we don't want a culture where everyone views their own personal development as becoming a manager. I think there are a lot of really problematic things that come from ladder climbing. So we try to emphasize how it could work instead. And then, there's one called open communication.
Rick: I think what you're talking about here is values: what behavior is the right behavior and what mindset is right mindset to be successful here.
Tyler: You said to be successful here, which almost all comes down craftsmanship. So maybe that one section needs more of an emphasis than it has right now. Because you're right. Or maybe not in the employee handbook but for someone who's applying, I can see that that's a much more important piece of information than like, why bootstrapping is important.
Rick: Yeah, totally. OK. So, the second section is about salary and benefits. What do you have in there?
Tyler: It's broken into two sections salary benefits. Benefits is pretty straight to the point. We have a brief section on our philosophy on what should be a benefit and what shouldn't. Because of where you and I both used to work where we sold health benefits administration software, I have strong opinions about this. Most of it is about how health insurance works and how vacation works. We have a lot of weird approaches to benefits. It needs explanation. The salary one is a little more high level. At the end, it says here's what everyone's paid. Developers make this, customer service people make this, and so on. But, the vast majority of the content is about how we think about how raises should work, here's how we think about balancing paying someone for their performance versus everyone being able to thrive. It's much more philosophical. That's probably the main part that I'd say resonates with people after we've hired them. One of the big points we make is that your compensation is completely separate from, for example, getting promoted to different responsibilities or anything like that. So, it takes a lot of pressure off them that otherwise would be stressing them out.
Rick: And then in the policy section, what kind of policies [are there]?
Tyler: I'm generally of the opinion, "don't document stuff." That's actually something I want to talk about later: when should you have a policy for something and when shouldn't you? Most of them are things that could potentially lead one employee being mad at another or being confused because they don't know what to do. There are a lot of stuff on the office like, can you make noise, and when and where and how do you use conference rooms. And there's a lot of stuff on how to take days off: vacation; sick days; work-from-home. And etiquette around cleaning up the refrigerators, the equipment we provide, and drinking alcohol at work.
Rick: You've got this great asset internally that maybe you need to refresh based on your new small business focus. It sounds like it's pretty good, though. It seems like your challenge is around how to leverage this asset higher up in the recruiting funnel so that: 1) you can expand your pool of applicants; and 2) you can have onboarding go smoother for the new hires.
Tyler: I'm going to rename the title of this podcast from "employee handbook" to "how to use an employee handbook to help with recruiting". Yes, that seems to be the topic here. We've talked around a lot of issues here, and I've learned certain things and gotten different ideas, but I'm interested in your thoughts. I've got 60 pages of documents. The flow for hiring somebody is: job listing online; lots of emails back and forth to schedule a phone interview; an in-person interview; and then eventually an offer. How would you introduce the topics I just described in that process?
Rick: I would treat this like an inbound marketing funnel. So, the first thing I would do is look at your employee journeys. So I would map out from the recruitee perspective: how do they first hear about Less Annoying CRM; where are they hanging out that they should be hearing about Less Annoying CRM, but they're currently not. I'd go through the full journey of the ideal employee for Less Annoying CRM. I would look at it from the perspective of the employee and try to figure out where does Less Annoying CRM want to be found. And the earlier someone is in that journey, the more applicant content is. The way we buy today as consumers is not too different from the way we shop for jobs. We go online, we do
Google, we go talk to friends, we might talk to some important advisors, we might go to
Linked-In and start looking around, we might talk to some recruiters. Oh, then now we start looking at a specific type of company. Maybe, I'm now using a more sophisticated tool to find specific companies. Maybe, I'm looking at venture-funded companies. [If so], that's
AngelList or a local investors portfolio page. There are alot of content opportunities here.
Tyler: I don't think we're realistically going to get a lot of applicants through like SEO, but they meet us at a career fair or we've already got our foot in the door somehow.
Rick: Are you familiar with TOFU, MOFU, and BOFU? I think what you're talking about is more of a middle of the funnel or bottom of the funnel issue. You have a relationship with these people. They know who Less Annoying CRM is, but you want to help them better evaluate Less Annoying CRM and realize how different you are. In other words, how do you differentiate? Is that it?
Tyler: Yeah. Especially because we do a lot of recruiting in college where they're so clueless about how the world works. They're really smart talented people, but they probably don't even know what questions they should be asking. So I think there's a great opportunity to get ahead of it and say, "why don't you ask every other company you're applying for these questions."
Rick: This is a classic playbook for content marketing at the middle of the funnel. Your middle-of-the-funnel [or MOFU] content is gonna be how to interview, how to find a job that best fits your profile, and what questions to ask. It's more teaching them how to interview. And then, the BOFU content. In the bottom of the funnel, typically you're at the stage where you've narrowed down to two or three employers and you're trying to choose. In the middle of funnel, you've narrowed it down to types of companies, and you're you're actively creating a list of employers you want to actually apply to. The way I like to do content marketing is I like to have an evergreen strategy. Are you familiar with that?
Tyler: Yeah. It's the idea that you write something that year-after-year-after year continues to be relevant.
Hub and spoke content for recruits
Rick: You've got it. And there's another term called hub and spoke, where the hub is your 60-page employee handbook and then you have spokes that you take out of that hub content and repurpose it to [hit] different stages of that recruitee journey that we talked about. So, I would employ an evergreen content strategy to this where I would leverage your employee handbook. I don't like creating new content. I don't like having multiple sources of content to manage.
Tyler: I agree with that. Although, I think it's important to have a way to offer this in bite sized chunks to people because it's such a long document otherwise.
Rick: Those are the spokes. Is there anyone you wouldn't share your employee handbook with if they asked?
Tyler: We've never officially decided to make it public, but I've shared it with everyone who's ever asked. So I think I'm comfortable making it globally public.
Rick: Cool. If that's the case, then that's available somewhere, and you start pulling out pieces of it to address the specific needs of the recruit. Here's a question. What big pieces of the employee playbook would you pull out and where [do they fall in the recruitee] journey?
Tyler: What seems clear to me having had this conversation [is that] BOFU is the place to focus for us because no one that we view as super promising drops out at the top levels of interaction with us. From their point of view, it's like, "why not go through it,” and then they make a decision at the end. You asked earlier do I know when we go into sales mode. Obviously, we do when we give the offer, but it's probably when the in-person interview happens. We don't interview that many people in person. There's a very high likelihood they're gonna get an offer if they do. I shouldn't say that because you know someone might misinterpret that and get their hopes up. Anyway, I think BOFU is where we should be focusing, and specifically we send a lot of emails back and forth with them anyway so it's a great opportunity to push content to them there. Let me throw an idea at you. What if before the interview we just say, "you're gonna have opportunities to ask questions to people. If you don't know what types of questions to ask, here's a bunch of info. You might want to read it, and then that'll give you some ideas of topics you want to discuss with people when you come in."
Rick: Yeah. That's great. One thing to do is to test. I know you're saying BOFU is more important, but maybe you test three pieces of content: one for TOFU, which is about how to find the right career; one for MOFU, which is about how to interview; and one for BOFU, which is how to choose the right employer for you.
Tyler: Yeah. And you know we've actually thought about this as part of the equity, diversity, inclusion side of things. One of the ways in which companies fail to be diverse is they set up an interview process that some people know what to expect and other people don't. So, we wanted to put together something like, "there will be absolutely no secrets here. There will be no surprises. We're gonna tell you what we're looking for.” So, that's kind of MOFU to TOFU. It's not how to interview everywhere, but it's how to interview with us. OK. So it could be, "here's how you interview with us trickling down into one of the things you should do is ask us questions and talk about values. Here are our values so that you can prepare for that." And then it won't even seem like we've been selling them because we're providing them with information on how to give a good interview.
Rick: It's almost like you take your employee handbook and create a new thing called, "The Guide to Getting a Job with Less Annoying CRM."
Tyler: I love that. "The Guide to Getting a Job with Less Annoying CRM." Yeah. We find people get stressed out over every single step of this process, and one of the big reasons people tend to like us is that [our interview process] is a less stressful experience. So, the more we can emphasize that and say, "we're we're giving you all the prep material you want," I think that'll really leave a good taste in their mouth. Cool. OK. I'm into that. Have you ever done anything like this before?
Takeaways
Rick: I never had time, but it makes so much sense to me that this would be a huge differentiator. I never got to the point at
PeopleKeep where recruiting was my number one focus. I was always worrying about something regulatory-related or product-wise or lead generation. I wish I had spent more time on recruiting through all that because we would have been able to solve those problems faster. If people are important, why wouldn't you spend time doing this? It seems like a no brainer. Ok, let's summarize takeaways from this episode. One is that an employee handbook is a great thing, especially when you make it focused on value to the employee and making them successful. We identified four components. One is a company philosophy - how we do things here and how to succeed. The second is compensation and benefits - being clear about what your policies are around the most important thing people work for, which is moolah. Number three is policies - make sure people don't get mad at each other [by defining some rules]. And four, from state-to-state and federally, there are certain laws and regulations in place that you as a company must meet. The second [takeaway] is that you can use the employee handbook asset to recruit and then [hire] people. Would you add anything?
Tyler: Yeah. There was one thing you said at the beginning that may be a minor point, but it really stood out to me, which is, you think that the CEO or whoever is setting the culture really needs to have their fingerprints on this. And I think what you said at the beginning that you used to think that this is a worthless document and now you don't. That's the whole differentiator, right? Is this some boilerplate thing you got off
LegalZoom or is this you communicating your vision to the whole company?
Rick: Yeah. Listen. If you're gonna build an employee handbook as a CYA tool, 1) don't expect people to read it, 2) don't expect it to add value to your company other than covering your butt. If you want to build an employee handbook that actually provides value, it needs to be something that creates massive clarity for every single person in the organization if they were to read it. I don't know how that document gets created without the CEO and senior leaders being heavily involved in building and maintaining that.