Using HR document management software as a tool to organize and archive employee documents can protect your organization from wasted time, administrative headaches, and legal liability.
The importance of HR document management software
Employees are the fuel that powers an organization and are often the most valuable asset of any business.
Acquiring top talent, evaluating performance, retaining employees, and maintaining compliance with state, federal, and industry guidelines are all essential elements of an organization’s long-term success, and employee documentation helps inform or ensure all of the above.
Technology has simplified the logistics of managing business documents. Gone are the days of overstuffed file cabinets, making copies, and overnighting important paper documents for review; an HR document management system transforms a pile of file folders and physical paperwork into a secure, easily accessible, searchable archive that improves efficiency while ensuring privacy.
The right document management software (DMS) can also act as an organizational framework for creating a workflow that streamlines the process of managing team members and their records.
Two types of document management systems
A document management solution is a type of content management system that specializes in collecting, managing, and archiving digital documents, and there are a variety of options with different features and functionality to choose from.
One of the first decisions to make when choosing a DMS involves how and where you want to store documents.
There are two main types of document management systems:
An on-premise DMS means that your data is stored on servers that are installed on the premises of your organization. This option is typically chosen by larger companies with dedicated IT staff and resources, since it involves more significant upfront costs and requires your organization to assume responsibility for the storage and security of the documents. There is some risk involved if you fail to back up the files since there is no automatic saved copy being sent to a cloud.
A significant benefit of an on-premises DMS is that you can access your documents without an internet connection, if necessary. You’re also completely in control of your system and its contents since there is no third party vendor involved.
With a cloud-based document management system, the data is stored in an external data center managed by a third-party provider. The storage space is on a rented server, with fees paid on a monthly or annual basis.
Costs are generally lower with cloud-based document storage, due to the fact that no hardware or dedicated IT staff are required and fees typically include updates and maintenance. A cloud-based DMS is more easily scaled than an on-premise solution and files can be securely accessed from anywhere, including mobile devices.
However, you are reliant on the vendor to keep the system running smoothly and access may be contingent on an internet connection.
Some organizations have security concerns about storing important digital files in the cloud, but there are potential vulnerabilities with on-premise records management options, too.
What should you look for in HR document management software
There are a lot of different variables when it comes to choosing the right HR document management software for your business.
Before you start doing in-depth research, consider the needs of your organization and decide what pain points you’re hoping to eliminate with an electronic document management system.
Some aspects and key features to consider include:
A lot of sensitive information is collected throughout the employee lifecycle; consequently, security is a critical component of information management. Data encryption, password protection, and permission settings for access control are important security features that can help keep your digital assets safe.
Ease of use
Choosing user-friendly software makes it easier to get all stakeholders on board with adopting a new tool, and helps improve overall efficiency. A good DMS will have a simple file structure, indexing, and robust search functionality to facilitate document retrieval.
File type versatility
The ideal HR DMS should serve as a one-stop-shop for employee records. The ability to store and share documents in a range of different file formats is essential to implementing a single, streamlined solution.
Employee documents often go through different iterations or edits. Version control and document tracking features allow users to review the history of a document or to ensure it has been updated or to track changes.
Choosing a system that integrates easily with existing programs, such as email clients, CRM software, and HRIS, or that offers an open API, can optimize your HR workflow through automation.
What are the benefits of using a document management system?
Finding the right document management system offers a wide range of benefits that extend far beyond simply organizing paperwork.
Here’s how a document management system can help your organization:
Document security: Protect the confidential information of your employees with data encryption, password protection, and access control to limit who can view or share files.
Paperless storage: Reduce supply costs and the need for physical storage space with a digital solution.
Improve efficiency: Eliminate the time-consuming process of tracking down a file that lives in someone’s desk drawer or hard drive with a central source of information.
Easy access: Search by employee name, document type, date range, file format and more and securely share information with relevant parties with minimal effort.
Scalable: Document management software can grow with your company from fledgling start-up to global conglomerate without a constant need to reinvent the document collection and storage workflow.
Enhanced collaboration: Share documents, collect signatures, and store copies of important information within one platform.
Improved workflow: Create an organizational structure that can seamlessly store and manage documents from job listing to exit interview.
The challenges of document management
The challenges of document management multiply as your business grows. It’s all too easy to lose a piece of important information — from inconsistent file names to sloppy storage protocol, there are a lot of obstacles that can make a search feel like an impossible feat.
Aside from the loss of productivity, being disorganized can eventually lead to serious compliance issues.
Investing the time, cost, and effort into implementing a DMS solution can reduce the risk of future legal liability.
Which teams will benefit from document management software?
It’s not just your human resources department and legal team that will appreciate the benefits of document management software.
Access to a central document repository makes it easier for managers and executives to review resumes, performance evaluations, and compensation data that can help with the decision-making process when it comes to hiring, promoting, or terminating an employee.
A DMS can also expedite the onboarding process by facilitating the collection of information and the exchange of signed documents.
Related: Explore resources that help manage compliance.
How to start using HR document management software
If you’re interested in incorporating an HR document management software into your workflow, start with the following steps:
Identify relevant HR documents
Start by making a list of the types of HR documents used by your organization, including:
- Recruiting collateral
- Hiring records
- Employee contracts
- Company policies
- Medical, leave requests, and disability records
- Payroll and benefit documents
- Personnel records and reviews
- Safety and accident records
- Training or onboarding materials
Assess current storage
Determine where the documents listed above are currently stored and evaluate the most secure and efficient method for exporting a copy of that information into a new system.
Define access and security levels
While reviewing the list of HR documents used by your organization, decide who needs access to that information, how often they will need access, and identify any special security needs. For instance, medical and disability information is protected by law and may need to be stored separately from individual employee files.
Identify retention requirements
Certain types of documents must be kept for a specific amount of time to maintain compliance. Decide how long you need or want to retain documents and configure your DMS to alert you to upcoming expiration dates.
Learn specifics of DMS functionality
Educate yourself and your team on the features and functionality available in the HR document management system that you’ve chosen to help fully inform the creation and implementation of a new workflow.
Finding the right HR document management software solution for your business can maximize efficiency, reduce liability, and empower your organization to prioritize what really matters — the people who make work possible.