Our List of HR Policies Every Small Business Needs
As your small business grows, there comes a time when it’s no longer practical to rely on informal chats, verbal agreements, and one-off decisions to manage your team. People thrive on clarity, fairness, and consistency, and there’s just not enough time in the day to manage everything on a case-by-case basis.
This is why clear, sensible HR policies exist.
You don’t need a 50-page handbook or a folder full of legal documents. But you do need a solid foundation of policies that reflect how you work, what you expect, and what your team can count on.
If you’re not quite sure where to start, read on for our list of recommended HR policies — plus insights into why HR policies are so important for small businesses.
Why HR policies matter for small businesses
It’s easy to think of HR policies as “boring” paperwork. But they’re actually a practical tool that helps your business run smoothly.
For example, good HR policies can help…
Reduce confusion: People know what’s expected of them and what they should do if they have any issues.
Support fair decision-making: Having a consistent framework for managers to refer to helps reduce the risk of bias and management inconsistencies.
Make difficult conversations easier: It’s so much easier to address poor performance, absences, and conduct issues when you have a policy to refer to.
Reduce business risk: Clear policies help you stay compliant with UK employment law.
Reflect your culture: Your policies don’t have to feel cold or corporate; they can reflect your values, tone, and approach to people.
The ultimate goal of HR policies is to support clear, respectful working relationships so that everyone knows where they stand and what’s expected of them.
10 essential HR policies every small business should have
So, what types of policies does your small business need? It’s easy to get carried away and create a policy for everything, but it’s best to start with the essentials.
Here’s a breakdown of the 10 essential HR policies we recommend small businesses put in place first.
1. Code of Conduct
A Code of Conduct sets expectations around behaviour in and outside of work, helping create a shared understanding of what’s considered professional and respectful.
What to Include:
Expectations around language, dress code, behaviour, and social interactions.
Guidance on how employees should represent the business externally.
Processes for handling conflicts of interest.
Escalation routes for inappropriate or unprofessional behaviour.
2. Disciplinary Policy
A Disciplinary Policy outlines how your business handles misconduct or performance concerns. This policy is key for maintaining fairness, consistency, and legal compliance when addressing behaviour and/or performance issues.
What to Include:
Examples of misconduct.
Steps in the disciplinary process.
Estimated timeframes and documentation requirements.
Legal rights and responsibilities (such as the right to be accompanied by a colleague or trade union representative).
Appeal process.
3. Grievance Policy
A Grievance Policy explains how employees can raise concerns or complaints about their work or treatment at work. It provides a clear, formal route for raising issues.
What to Include:
Process for raising a grievance.
Examples of grievances.
Timeframes and documentation requirements.
Legal rights and responsibilities (such as the right to be accompanied by a colleague or trade union representative).
4. Sickness Absence Policy
A Sickness Absence Policy sets out what employees should do if they’re unwell, and how you’ll manage both short-term and long-term absences. This policy is essential for supporting employee well-being and making sure managers maintain a consistent approach to managing time off.
What to Include:
Process for reporting sickness.
Examples of when a doctor’s note is required.
Sick pay entitlement (statutory or enhanced).
Return-to-work processes.
Long-term absence guidance.
5. Annual Leave and Holiday Policy
An Annual Leave and Holiday Policy outlines how annual leave is accrued, booked, and managed. This helps prevent misunderstandings, making sure everyone is clear on how and when they can take time off.
What to Include:
Leave entitlement (including part-time staff).
Process for requesting time off.
Rules around holiday carryover or restrictions.
Approach to bank holidays.
6. Family Leave Policy
A Family Leave Policy combines guidance on maternity, paternity, adoption, and emergency leave for dependents. This policy shows support for working parents and helps managers apply leave entitlements fairly across all staff.
What to Include:
Who qualifies for each type of leave.
Notification requirements.
Pay entitlements (statutory or enhanced).
Process for returning to work.
7. Health and Safety Policy
A Health and Safety Policy outlines your business’s approach to keeping people safe and how legal requirements are met.
What to Include:
General health and safety commitment.
Roles and responsibilities (i.e., who’s responsible for reporting hazards and maintaining safe working conditions).
Process for reporting accidents or risks.
Safe working procedures.
8. Equality, Diversity and Inclusion (EDI) Policy
An Equality, Diversity, and Inclusion Policy sets the tone for a fair and respectful workplace. It outlines your commitment to treating everyone fairly (regardless of their background, identity, or circumstances). For small businesses, this can help prevent issues related to bias and discrimination.
What to Include:
Statement of commitment to equality, diversity, and inclusion.
Legal obligations under the Equality Act 2010.
Behavioural expectations and examples..
Process for raising concerns and how those concerns will be addressed
Ongoing commitment to EDI.
9. Data Protection and Employee Privacy Policy
This policy explains how employee data is collected, stored, and used. It’s essential for GDPR compliance, and just as importantly, it builds trust with your team by showing you take their personal information seriously.
What to Include:
What data is collected and why.
How data is stored and secured.
Who has access to employee data.
Employee data rights.
Third-party data sharing disclosure.
10. Remote and Hybrid Working Policy
A Remote and Hybrid Working Policy outlines what’s expected of employees who work remotely on a full-time or part-time basis. This policy helps avoid miscommunication around hours, communication, and responsibilities while working from home.
What to Include:
Working hours and availability.
Expectations around communication and meeting attendance.
Desk setup and equipment requirements.
Security and confidentiality measures.
Health and safety at home.
Additional list of HR policies to consider
Once the core policies are in place, adding a few extras can help reinforce your values, avoid misunderstandings, and support a well-rounded people strategy. Here are a few additional policies to consider:
Training and Development Policy, helpful for outlining how your business supports employee learning and growth.
Well-being or Mental Health Policy, helpful for creating a healthy, supportive workplace.
Social Media Policy, helpful for setting expectations around how employees use social media personally and professionally.
Flexible Working Policy, helpful for clarifying the process for requesting flexible working arrangements.
These policies aren’t necessarily essential from day one. But they’re good to keep in mind for later as your business and team grow.
Practical guidance for implementing new HR policies
HR policies should strike the right balance between covering your legal responsibilities and making life easier for everyone who works in your business.
Here are some practical do’s and don’ts to help you get it right.
Do’s and Don’ts of Implementing New HR Policies
| Do’s | Don’ts |
|---|---|
|
Use clear, straightforward language that’s easy for everyone to read and understand. Create policies that reflect how your team actually works. Include policies that you plan to use and apply consistently, making sure to keep things concise. Review and update your policies annually to verify they still make sense for your business and reflect current employment law. |
Use complicated legal jargon. Rely on off-the-shelf templates without adapting them to fit your business. Forget to involve your managers when drafting or changing policies. File policies away and forget about them. |
Creating policies that work in practice (not just on paper)
Clear, well-written policies not only help your employees understand what’s expected of them, but they also give your managers a clear guide for handling tricky situations.
The key is to keep it simple, start with the essentials, and make sure your policies reflect how your business really operates. The goal is not perfection, but rather to create policies that are actually useful for your business.
Do your current HR policies feel outdated, unclear, or like they’ve been borrowed from a corporate handbook that doesn’t quite fit?
It’s time for a refresh, and we’re here to help! Get in touch, and we’d love to help you develop practical, people-first policies that keep your values front and centre and tick all the legal boxes.
