Document Management Improves Record Retention for Your HR Department
Keeping paper-based employee records is expensive for any company. According to McKinsey, companies that undergo a digital transformation and digitize their business processes are 20-50% more likely to generate economic gains. Storage means square feet, and though a few documents may not seem like much at the beginning, they quickly add up.
Human resource departments need to retain most employee records for one to ten years from the “date of action.” This covers hiring documents, testing, employee contracts, I-9 forms and employee status changes such as promotions, demotions, transfers, layoffs, and training. Even job orders submitted to employment agencies and job ads must be retained for one year. All this stored documentation not only creates a paper silo, but it could be dramatically increasing your operation costs.
Now consider the retention schedule, as required by U.S. law, for other employee records that range from two years to indefinitely in some cases*:
- FMLA records: three years
- INS I-9 forms: three years after date of hire or one year after date of termination (whichever is later)
- Payroll records: three years
- Drug tests: five years (records pertaining to the process: only two years)
- OSHA forms 300, 300A & 301: five years
- Health records: six years
- Exposure to hazardous materials records: 30 years
- Benefits plans and pension documents: indefinitely
Additionally, each state may have its own additional requirements and different countries also have their own requirements for record retention.
How Document Management Software Offers Efficient Record Retention
Document management software enables HR departments to effectively manage retention and destruction schedules for each employee document type as well as ensure business continuity, especially if your company operates from more than one location. Some of the benefits include:
- Easier access to business documents for employees: A 2018 guide stated 49% of employees interviewed have trouble locating documents. With remote work becoming part of the new normal, paper-based documents have made it even more challenging for teams as files in office filing cabinets are not accessible when working from home. Scanning documents into a document management system eliminates problems that paper files cause.
- Improve your response to lawsuits: If you are preparing for a lawsuit, cloud document management makes it easier to find and access critical documents.
- Be better prepared for an audit: If any documents are missing, the document management system can send you an alert, improving your preparedness in case of an audit.
- Enhance compliance: Document management software allows managers to set permissions for who can access documents. The system’s enhanced document security sends alerts to require access approval or notify staff members if someone without the right permissions is trying to access the documents.
Why More Companies Are Using Document Management Software
Storing paper documents in filing cabinets, basements, or off-site storage and not having a record retention policy is a surefire way for HR departments to get into hot water. The water becomes even hotter when your team needs to locate documents quickly because of a lawsuit.
With the help of document scanning, you can digitize your paper-based employee records as well as index their information into your document management software so it’s easier to find. When undertaking this endeavor you can choose to do it in-house or work with a BPO company who specializes in document management services. The former often decreases your company’s productivity since the project is usually assigned to already busy employees who are not experts on effective ways to manage documents. In addition, having your in-house employees manually input data can lead to manual errors.
That’s why companies like UKG, a global leader in human resource service delivery and workforce management, chose MetaSource as their North American document scanning partner. With over 20 years of experience in high-volume document scanning, document management and workflow automation, MetaSource has helped UKG with file scanning, file organization with tagging, and uploading millions of employee documents onto UKG’s human resource platform.
Contact MetaSource to find out how to easily transition into going paperless or read Document Scanning & Workflow Automation & How it Pays for Itself to learn more about how scanning your documents and document management software makes your company run more efficiently.
* Disclaimer: Referenced retention schedules change, are not comprehensive, and may be trumped by state or industry guidelines. We recommend consulting with a certified records manager before creating a records retention policy and specific guidelines. The industry trade groups ARMA and ICRM are both good resources for additional information on records management.