9 HR Document Management Best Practices That Will Keep You Organized

by Corey Philip //  November 12, 2022

HR documents are the pillar of all the procedures that govern a business. These documents range from employment relationships, company policies, entering into business agreements, and more. It is critical for HR professionals to sustain organized, unerring, consistent, and accessible documentation of workplace events.

The best HR document management practices include organizing HR records, switching to electronic software, implementing HR record retention schedules, discarding outdated records, workflow management, training staff to use document management practices, and implementing security policies and audits.

Effectively managing and organizing HR documents can be a real challenge due to the exorbitant volume of data, paperwork, and digital documents. However, here are the best practices for HR document management to keep everything organized, up-to-date, and easily accessible.

The Best Practices for HR Document Management

Documents are the driving force of a business. Prioritizing Human Resource (HR) documentation will significantly impact a company’s future and new developments. They clarify policies, help mitigate disputes, and establish performance metrics. Neglecting document management can cause a company significant liabilities and losses. Therefore, HR professionals must prioritize and maintain an organized, consistent, and productive system for documentation.

HR document management practices involve processes and techniques that help organize, store, and access HR files and data.

Effective practices ensure:

  • Documents are properly and safely stored
  • Employee information is secure and accessible to HR professionals
  • Unnecessary files are disposed of according to compliance regulations
  • HR professionals can efficiently go about their daily administrative responsibilities

With that being said, here are the best practices for HR documentation management to keep you organized.

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1. Organize HR Records

Set up and organize your essential employee and HR records by separating them into specific categories. This will save your HR department time and endless frustration. In most cases, you can categorize employee records files into three separate categories:

  • Personnel files: Application, resume, cover letter, education verification, employment verification, job description, job offer, contract, promotion requests, performance reviews, termination, and all other paperwork related to the employee’s job. 
  • Medical files: Health insurance forms, emergency contacts, doctor’s notes, accident reports, beneficiary information, medical leave requests, Family and Medical Leave Act paperwork, worker’s compensation claims, and all other documents related to medical information.
  • Payroll files: Pay authorization and deduction forms, W-4 forms, W-2 forms, attendance records, timesheets, receipts for reimbursements, employee raise paperwork, award or bonus paperwork, and all other documents related to financial information.

Ensure you comply with federal and state law by excluding confidential information and maintaining employee data and personnel files according to the stated requirements. Keep information irrelevant to an employee’s role, including ethnicity, disabilities, and I-9 forms, separately.

If you use electronic filing, maximize efficiency by placing each employee’s document collection in separate folders and sub-folders.

2. Manage HR Documents Electronically

Most small businesses initially use a paper-based recordkeeping system. However, the paperwork quickly becomes cumbersome as the company expands. Therefore, we recommend ditching the filing cabinet and old storage rooms and managing HR documents electronically. Electronic filing will increase efficiency, security, and compliance and decrease document mismanagement and loss.

Here are the best electronic HR document management software in 2022:

  • Zoho is an excellent cloud-based HR management software that enables you to create, store, edit, and share data and employee documents. It is perfect for businesses of all sizes.
  • eFileCabinet is a secure HR document management solution ensuring your HR department complies with government and corporate rules. The system offers premise and cloud document management software to improve file organization.
  • DocuPhase is a leading enterprise automation software for HR-related accounting files and data management.
  • DynaFile is an innovative system for HR file management, increasing efficiency with a paperless employee file lifecycle, from recruiting to retention.
  • PeopleDoc is an HR document management software that offers useful HR management features to simplify operations across the organization.

3. Implement HR Record Retention Schedules

HR record retention schedules are critical. They ensure that employee record management is compliant with Federal Government Laws.

Retention schedules may seem counterintuitive to saving time and productivity. However, they ensure well-organized legal records that support your company’s employment actions. It is a risk keeping employee files beyond their retention date. Outdated files can be queried in audits or litigation, potentially exposing the organization to unnecessary risks. Therefore, it’s best to purge the files on schedule.

Record retention policies ultimately reduce risk, improve compliance, minimize costs, keep employees organized, and ensure data security. Government regulations are constantly changing. So, ensure you review and update the retention schedule frequently.

4. Discard Outdated Employee Records

HR departments handle extensive paperwork, from applications, employee agreements, medical records, background checks, employee handbooks, and more. However, multiple documents reach their extension date and steal office and storage space.

It’s time to shred the outdated employee records collecting dust in your office’s filing cabinets. Additionally, shred the unnecessary documents as your company transitions towards electronic document management.

Pro tip: Use a local outsourced shredding service to save valuable time and focus on more critical tasks. Alternatively, ask the IT department to assist with purging outdated digital documents.

5. Implement or Improve HR Workflow Management

HR is a process-heavy department that can be time-intensive and cumbersome due to repetitive administrative tasks. Implementing an HR workflow prevents productivity drops and wasted time.

HR workflows are the group of predictable and repetitive tasks related to HR processes. Implementing HR workflow management will speed up HR processes, save time, ensure fewer errors, cut costs, and improve efficiency without compromising security. Each HR workflow process has unique approvals, requests, fulfillment tasks, and process notifications. (Related: The Best Team Productivity Tools to Boost Team Efficiency)

You can use HR workflow management on the following processes:

  • Job posting
  • Leave requests
  • Training requests
  • Timesheet tracking
  • Employee information system updates
  • Employee onboarding and offboarding
  • Recruitment automation
  • Performance appraisals
  • Internal surveys
  • Employee engagement
  • Employee self-service

6. Train HR Staff to Use Document Management Practices

The primary goal of document management practices is to increase efficiency. If the HR team does not know how to use the system effectively, it can cause a counteractive effect. Make an effort to train and support your HR team by ensuring the members participate in a training program to teach them how to use document management practices effectively.

The training program should include laws regarding employee files and a detailed overview of the company’s specific filing system. You can also provide the HR department with eBooks and webinar tutorials on effectively using the new document management process.

7. Provide Multiple Device Accessibility

A primary goal of document management practices is to make information easily accessible to the HR department. Therefore, if you use digital filing software, it’s crucial to ensure that HR has access to documentation on various devices.

In the modern age, many people complete work tasks using their phones by reading, sharing, or signing documents. Allowing the HR team to access and share documents on their phone, iPad, or laptop is a time-saver. It will enable quick retrieval and document management without waiting to return to the office to use the computer.

8. Implement Security Policies

HR departments deal with masses of confidential records and data, which can lead to internal and external security threats. Companies are accountable for any transgressions. Therefore, tie role-based security permissions to the documentation with sensitive information regarding your employees. Security measures should restrict unauthorized users from accessing, destroying, or sharing confidential records.

Confidential documents include HR records, contracts, payroll information, disability forms, I-9 forms, etc. You can implement non-disclosure agreements that specify how employees may retrieve, handle, and share information. Additionally, invest in a system that tracks activity, document changes, approvals, and routing.

9. Implement thorough HR Audits

HR auditing is the thorough and objective examination of your company’s HR policies and processes to identify trouble spots and ways to improve them.

An HR audit allows you to properly assess if the implemented HR policies and processes are beneficial or harmful to the overall business. Conducting HR audits will enable you to look into compliance, best practices, performance, and competitiveness.

The two primary types of HR auditing include risk mitigation and value creation.

  • Risk mitigation audit: Focuses on identifying areas that can cause legal trouble or open the company to employment-related lawsuits.
  • Value creation audit: Focuses on identifying areas to improve processes and policies to maximize value and attract better employees.

Final Thoughts

While implementing new HR document management practices may seem counterproductive at first, they end up saving time, space, and costs. Ensure the entire HR department is on board with the company’s HR document management practices and policies by providing proper training.

About the author

Corey Philip

Corey Philip is a small business owner / investor with a focus on home service businesses.

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