A hiring policy simply defines the practices and procedures used to hire a new employee. It covers everything from identifying the need through making the offer and considers fair practices, steps, and responsibilities.
You will typically only need a single policy for your company—though you may have different policies for different occasions. For example, seasonal businesses may have different hiring policies for high and low seasons, or you may need a different policy for salary workers in the office vs hourly laborers in the field. Regardless, these should take into account the legal issues, anti-discriminatory practices, and basic how-to-hire steps.
We’ve created a hiring policy template to get you started in the right direction. It’s meant to guide you in building out a hiring policy that’s best for your small business.
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Things to Include in a Hiring Policy
- Statement of Purpose: This explains the reason behind the policy and touches on your hiring philosophy and your main goal in finding the right candidate.
- Statement of Fairness: Some businesses include a statement that they adhere to the Equal Employment Opportunity Commission guidelines. Other businesses consider it understood throughout their practices.
- Scope: This covers where and when to apply the policy, and may include departments and specific employment types (job, wage-vs-salary, union-vs-non-union).
- Steps for hiring: Cover all the important steps in the process, starting with identifying the job and ending with the acceptance. You can get as detailed as you need to (such as including what software you use and who is responsible for specific steps). Some steps to include are:
- Identifying the job
- Crafting the job ad
- Posting the job (include here whether you should search internally first, how long to post the job, where to post)
- Accepting and screening resumes (where, who, and any standards to consider)
- Conducting interviews (how, who, and best practices)
- Reference and background checks (as needed)
- Job offer (how, contingencies, how long do you wait for acceptance, what negotiations are allowed?)
- Onboarding: This is just a quick overview of what happens in onboarding with approximate time.
- Legal considerations: Throughout your document, you need to consider compliance with hiring laws at the federal, state, and local level. For example, what are the laws concerning a background check? If you want to hire minors, what changes in your job description? What questions can you not ask in an interview by law? How do union rules affect the job offer?
- Special circumstances: Include some guidelines for things like hiring family members, hiring internally, rehiring, or hiring someone recommended by a current employee.
How to Create a Hiring Policy—Steps
When creating your hiring policy, it’s best to take stock of your stakeholder’s opinions, as well as the internal purpose and philosophy that your company will want to have regarding your hiring. To ensure that your policy creation makes sense, follow these steps:
Step 1: Gather the Stakeholders. These are the people involved in the hiring process, such as HR, managers, and your legal department or counsel. They may not be writing the policy, but they should have a say in what goes into it.
Step 2: Determine the Purpose/Philosophy. Avoid generalities like “finding the perfect candidate” or “creating a fair hiring process.” Instead ask, how does this hiring policy support your business and brand?
Step 3: Set the Scope. Be sure your team understands to whom the policy applies.
Step 4: Set a Game Plan. Set the timeline for writing the policy, assign sections to those who are involved in the writing, and gather whatever information you need (like where you post jobs, what applicant tracking software you use, and what laws specifically apply to your situation)
Step 5: Write the Procedures. Use our template or hiring policy sample below as a guideline. You might also look for hiring policy examples in your industry to use as a basis.
Step 6: Review the Hiring Policy. Run the policy through some of the stakeholders to ensure the hiring policy and procedures are clear and cover the most important points. You should also have your legal department or counsel review it to ensure nothing conflicts with the law.
Step 7: Publish. Make sure everyone involved in hiring (not just stakeholders) knows where to find your hiring practices policy.
Hiring Policy Sample
We’ve created a hiring policy sample for JollyPants, a fashion company with 90 employees in sales, manufacturing, and fulfillment. This is a simplified hiring policy to give you a basic idea of what to include and verbiage to use, but should not be considered legally binding. Click each header below to see how each section is laid our—or jump to our hiring policy template above for complete instructions.
The right employee ensures the future of our business. This hiring policy not only ensures a fair process for finding the most qualified employee but also demonstrates our values of Quality, Teamwork, and Safety to attract candidates who are a good fit.
We provide equal employment opportunities to all employees and applicants, hiring based on merit, competence, and qualifications. We do not consider race, gender, age, or disabilities (as long as the candidate can complete the duties as stated in the job description.)
This hiring policy applies to all employees involved in the hiring process, and all jobs for the company. It also applies to the treatment of all candidates.
Whether a new position or one opening up, the shift supervisor makes the request with the title, shifts, hours, required qualifications, and essential job functions, and passes it to the department head who approves them before sending them to HR. HR will verify the need and determine the salary or hourly pay based on similar existing wages, as well as current competitive analysis. HR will also meet with the supervisors before posting the job to get any other details needed.
HR will develop the job ad per the JollyPants brand, using past ads as a guide. HR will track applicants and scan resumes. Some positions at JollyPants require specific physical capabilities; for example, the ability to lift large boxes of a certain weight; these should be noted in the job ad.
We encourage employees to recommend JollyPants as a great place to work. Share the job in-house and let employees know they can get a bonus if a candidate they refer is hired.
We believe in providing growth opportunities, so jobs will be promoted within the company for two weeks to give employees a chance to apply. After that, it will be promoted on the appropriate job boards, there to remain until the job is fulfilled. HR may also approach past applicants to see if they’d like to apply for the new position.
HR will screen all candidate applications and resumes, sending rejections in a timely manner (within a week if possible) and scheduling the best for interviews. HR and the hiring supervisor will conduct the initial interviews; in cases of management and higher positions, a second interview with the department heads may be conducted.
HR will send qualifying candidates links to the appropriate skills tests and give a deadline for their completion to continue the process. HR will send only the skills tests needed for the job only to those candidates who are being considered for interviews. All candidates being considered for interviews will take the HEXACO Personality Inventory test.
First interviews may be held online through our software, but second interviews should be in-person. After each interview, HR will collect the candidate evaluation forms and make notes on any discussion. HR will notify applicants if they are not chosen for the position by the time interviews are completed.
After the interviews, HR will conduct a professional reference check of the top two or three candidates. Candidates need to provide two professional references. This requirement may be waived for internal hires or hires referred by a JollyPants employee.
We’ve found our next JollyPants employee! Potential new hires will need to take a drug test and submit to a background check that may include credit history and criminal record. Internal applicants can be waived from this requirement. If all checks out, HR is clear to make the job offer.
Candidates should be given one week (seven days) to accept or reject a job offer. HR may negotiate on pay or benefits, clearing any changes to the offer with the hiring department head. If an agreement is not reached after the week, the offer may be redacted.
JollyPants may rehire past employees. However, we should not hire employees who had more than one bad review due to poor job performance or behavior or who left or were fired after a single bad review. Likewise, rehires must undergo the same assessment process as new candidates, including background checks and interviews.
New employees will undergo full onboarding, including tax and direct deposit paperwork, then complete training according to state and federal law and the needs of the position. Internal hires need only complete the paperwork and training that is different or additional for their new position.
Why Should Small Business Owners Have a Hiring Policy?
A good hiring practices policy saves you time and money and protects you from lawsuits by ensuring fairness. It also helps:
- Identify better candidates
- Ensure you conform to federal, state, and local laws
- Avoid lawsuits or civil fines for discriminatory hiring
- Ensure uniform (or at least equally fair) hiring practices across the company
- Make decision-making more efficient and consistent
- Increase employee and candidate confidence in the company
- Stay on-brand
- Train hiring managers
Having an official hiring policy in place helps to ensure that your processes are legal, fair, and consistent throughout your company or department—while also ensuring that your budget is allocated properly. It’s an important first step in getting the most from it, as the costs for hiring average at around $5,000. Learn more about the costs of hiring an employee or check out our guide on how to calculate cost per hire to help you budget your hiring.
New to hiring? Check out our article on how to hire employees.
Hiring Policy Frequently Asked Questions (FAQs)
You should include a general summary of the purpose and scope of the policy, the steps of the hiring process from the job description to making (or taking back) an offer, and any cautions or steps needed to ensure a fair process.
We suggest six stages to the hiring process
- Determining the type of employee needed
- Creating the job description
- Advertising and recruiting candidates
- Evaluating resumes
- Interviewing candidates
- Crafting the job offer
Your hiring policy should touch on each of these steps. You can learn more in our article on how to hire employees.
An ethical recruitment policy starts by adhering to federal, state, or local laws, including those prohibiting discriminatory hiring practices. Then, it includes procedures that emphasize fairness, transparency, and inclusiveness.
For example, an ethical recruitment policy might have policies in place to evaluate candidates without discrimination (such as with an unbiased skills test), a timeline to ensure candidates are informed promptly if they are being considered or rejected, a means for transparent communication, and objective criteria for evaluation and interviews.
Hiring procedures are the steps a company follows when filling a job opening. They start with identifying the opening and continue through onboarding. Hiring policies generally cover the steps from identification to job offer acceptance.
Yes, you may have different hiring policies according to season (high tourism vs slow season), department, or even location. They may reflect different laws affecting specific employee types: those under a union, for example.
Some illegal hiring practices may include:
- Asking discriminatory questions like age, gender, or race
- Automatically rejecting based on a disability (except where it means they cannot perform the duties of the job)
- Hiring illegal immigrants
- Breaching previous employment contracts or agreements with clients
- Salary disparities for equal experience
Bottom Line
Having a written hiring policy helps ensure fair and uniform hiring practices in your company. They should be simple, clear, and address legal and fairness issues as well as outline the basic steps. With the hiring policy template and sample above, you should have a good start for building your own.
