8 Essential HR Policies Every Business Should Have

HR policies aren’t just bureaucratic paperwork; they set expectations, protect both employers and employees, and provide a framework for handling workplace issues consistently and fairly. Without clear policies, businesses leave themselves vulnerable to disputes, legal challenges, and inconsistent management practices.

Whether you’re a growing startup formalising your HR function or an established business reviewing existing policies, these are the fundamental policies every organisation needs.

1. Equal Opportunities and Anti-Discrimination Policy

This policy demonstrates the organisation’s commitment to fair treatment regardless of protected characteristics including age, disability, gender, race, religion, sexual orientation, or pregnancy and maternity status.

It should outline how the organisation prevents discrimination in recruitment, promotion, training, and day-to-day operations. The policy needs to explain how employees can raise concerns about discrimination and how complaints will be handled.

Beyond legal compliance, a strong equal opportunities policy signals organisational values and helps create an inclusive workplace culture.

2. Health and Safety Policy

Employers have a legal duty to ensure the health, safety, and welfare of their employees. A health and safety policy outlines how the organisation meets these obligations, identifies key responsibilities, and explains the procedures employees should follow.

This includes risk assessments, accident reporting, emergency procedures, and arrangements for consulting with employees on health and safety matters. For organisations with five or more employees, a written health and safety policy is a legal requirement.

The policy should be reviewed regularly, particularly when working practices change or after any incidents occur.

3. Disciplinary and Grievance Procedures

Every business needs clear procedures for handling conduct or performance issues (disciplinary) and employee complaints (grievance). These processes ensure fairness, consistency, and compliance with employment law.

A disciplinary procedure outlines what constitutes misconduct, the investigation process, potential sanctions, and the employee’s right to appeal. The grievance procedure explains how employees can raise concerns and how the organisation will respond.

Following proper procedures protects businesses at employment tribunals. Failure to follow fair processes is one of the most common reasons employers lose unfair dismissal claims.

4. Absence Management Policy

This policy covers how sickness absence should be reported, what evidence is required (such as fit notes), and how the organisation monitors and manages absence.

It should explain statutory sick pay entitlements, any company sick pay scheme, and the procedures for handling long-term absence. The policy might also cover return-to-work interviews and how persistent short-term absence is addressed.

Clear absence policies help reduce unauthorised absence and ensure genuine illness is handled supportively while preventing abuse of sick leave.

5. Annual Leave Policy

An annual leave policy explains entitlements (including statutory minimum and any additional company leave), how to request time off, notice periods, and how holiday pay is calculated.

It should cover what happens to unused leave at year-end, how leave is treated during notice periods, and any restrictions on when leave can be taken (such as blackout periods during busy seasons).

For employees with irregular hours or those who’ve recently joined or left, the policy needs to explain how holiday entitlement is calculated on a pro-rata basis.

6. Data Protection and Confidentiality Policy

With GDPR requirements and increasing data security concerns, organisations need clear policies on handling personal data, confidential information, and security procedures.

This policy should explain what data the organisation collects, why it’s collected, how it’s stored and protected, and employees’ rights regarding their personal data. It also covers confidentiality obligations, both during employment and after leaving.

For roles handling sensitive data, the policy might include specific security requirements and consequences for data breaches.

7. Flexible Working and Remote Working Policy

The workplace has changed significantly, and policies need to reflect modern working arrangements. A flexible working policy outlines eligibility for flexible arrangements, the request process, and how decisions are made.

This might cover options like remote working, compressed hours, part-time arrangements, or flexitime. The policy should explain what factors are considered when reviewing requests and employees’ right to appeal if requests are declined.

With remote working increasingly common, organisations may need separate policies covering equipment provision, home working arrangements, expenses, and communication expectations.

8. Social Media and AI Use Policy

A social media and AI use policy sets clear expectations around how employees represent the organisation online and how emerging technologies, including artificial intelligence tools, can be used in the workplace.

The policy should cover personal and professional use of social media, outlining what constitutes acceptable conduct, how confidential information must be protected, and how employees should reference the organisation in public forums. It should also address the use of AI tools for tasks such as content creation, data analysis, recruitment support, or administrative work, including where human oversight is required.

Clear guidance helps manage reputational risk, protect intellectual property, and ensure compliance with data protection and confidentiality obligations. As AI adoption accelerates, having a defined policy reduces ambiguity, supports responsible innovation, and protects both employees and the organisation from unintended misuse.

Making Policies Work

Having policies written down is only the first step. They need to be communicated effectively, accessible to all employees, and applied consistently. Managers need training on key policies, particularly around disciplinary procedures, absence management, and handling grievances.

Policies should be reviewed regularly – at least annually or whenever employment law changes. They also need to evolve as the organisation grows and working practices change.

For HR professionals, understanding core HR policies every specialist should know is fundamental to the role, whether working as a generalist covering all HR functions or as a specialist focusing on particular areas like employee relations or reward.

Building Your HR Function

Strong HR policies require HR professionals who understand both the legal framework and how to implement policies practically and fairly. Portfolio HR & Reward has been placing HR professionals since 1988, giving us over 35 years of insight into what makes HR teams successful.

As the #1 rated recruitment agency on Trustpilot with over 3,000 five-star reviews, we’ve built expertise in matching organisations with HR professionals who can develop, implement, and manage effective policies. Our consultants understand the difference between someone who can write policies and someone who can embed them into organisational culture.

We provide comprehensive support including salary surveys, market insights, and benchmarking advice to help you build HR teams capable of creating workplaces where clear policies support both business objectives and employee wellbeing.

Work With HR Specialists

Whether you need HR Advisors, HR Business Partners, Employee Relations Specialists, or Reward Managers, Portfolio HR & Reward brings specialist knowledge to your recruitment process. Our consultative approach ensures we understand your organisational needs and culture before recommending candidates.

For expert recruiters for compensation teams and broader HR functions, contact Portfolio HR & Reward today.