Thought Leadership Papers
The soft stuff is always harder than the hard stuff
Roger Enrico, Vice Chairman of PepsiCo; referring to areas like HRM as opposed to quantitative factors in Fortune, November 27th, 1995
Freeing human resources from the paper trap
Eliminating paper means HR can spend more time focusing on the needs of the organization and its employees
Fact: The average hourly wage for a human resources employee in the United States is $35 an hour. In HR costs alone, your business loses $1 for every minute spent locating and modifying employee files.
Unlike transactional, financial operations (such as accounts payable and accounts receivable), human resources operations require employee file management that goes far beyond the reconciling of numeric figures. Every employee within your organization has their own unique, persistent paper trail that encompasses several functions, such as payroll/tax data, benefits data, insurance data, disciplinary records and so on. In a paper-driven environment, this creates a burden in terms of locating files in a timely manner, expanding physical storage space as the number of past and present employees increases (especially during times of organic or acquisition-based growth), maintaining a consistent naming and filing system, and ensuring sensitive data is secure. If your business is engaged across multiple countries and legal jurisdictions, issues of efficient, secure management of employee data are compounded.
Many analysts agree that efficiency in business operations can be gained through centralization. HR is no different in this regard. By consolidating data access through electronic, cross-functional means, enterprise content management systems build upon this efficiency, eliminating paper from the equation. Converting to a digital workflow makes vital data readily accessible, while eliminating the needed space and potential liability of maintaining file cabinets.
Any employee can access his/her complete personnel file from anywhere through our secure web portal, and HR managers can view all the files for their employees. This provides a great amount of convenience, and all users need is an internet connection. Sometimes an employee’s file would be lost or would arrive incomplete when there was a transfer; now, the employee and the HR team at the new office have instant access to the full file, and there’s no delay or risk of employee file loss.
It becomes quite simple for authorized users to access an employee’s electronic file, as they simply click on the employee’s name and any needed employee file is immediately available.
Previously, it could take five minutes to flip through a personnel file for a particular employee file. With technology assistance, instantly one can get straight to the employee file needed.
Even there has been a desire in many public agencies around the world to increase efficiency, reduce costs, save space, improve service delivery and enhance transparency and accountability.
Leading organizations are standardizing processes (37%), automating processes (32%) and better managing data (20%). As a result, employee file management solutions are proving highly effective in helping these organizations achieve these goals. Organizations that invest in these solutions are able to improve efficiencies and reduce cost, overhead and risk of managing paper based forms.
It has been found that employee file management can save an organization up to $3 million a year and improve overall productivity, including time spent looking at information and ability to get information as shown in the table below.
The following pages of this paper will outline the benefits of Employee File Management on HR functions and provide key recommendations for selecting the right provider with a note on overcoming challenges faced in embracing the change.
Challenges for this Change
Organizations often wonder whether the Change Management that comes with with digitizing employee file management is worth it. Some common perceptions that cause uneasiness in taking this step are:
- The privacy rights of employees will be at risk if a security breach allows access to private information. This could result in legal violations, such as identity theft.
- There are upfront costs of labor, equipment, and system infrastructure to create and store the electronic files.
- Extra steps are required (as compared to hard copy records) when electronic employee records are submitted in legal proceedings, such as verification of an electronic signature, for example.
- Management of large volumes of paper and electronic records.
- Compliance with employee file retention and deletion regulations in global workforces.
- Demand for delivery of high-quality, accurate HR services at a low cost.
- In a cloud environment, HR has to manage vendor about integration, data centers, back-up hosting and compliance with safety and introduce Change Management to adapt to it.
In attempting to alleviate such notions which forces organizations to take a back foot in embracing this beneficial oppurtunity it can be said that Employee File Management provides:
- Visibility: Organizations should consider solutions that can guide planning, recruiting and staffing.
- Global Support: Employee File Management is particularly relevant for global organizations that need to balance complex needs based on regional diversification.
- Integration: It is important to ensure easy accessibility to employee information which integrates seamlessly with existing HR systems.
- Collaboration: Foster a mindset of sharing information among your employees. Invest in tools to provide a centralized, authoritative location to find the most up-to-date documents. Then taken these tools and extend them to managers, employees and key stakeholders.
In a cloud environment, the responsibility for managing the vendor relationship typically shifts from IT to HR. Also, HR must consider Change Management particularly when cloud solutions include more frequent updates that require additional resources to review the upgrades and train users. By playing a greater role in its technology implementation and training, HR will be able to maximize its investment in a cloud solution and begin to transform the way it will operate in future.
Benefits to HR
Employee file management solutions can manage all employee content and processes in the whole hire – retire process. This facilitates greater collaboration, strategy, and access to data.
Additional benefits include:
- It reduces the need for physical storage space at the employer’s office and also reduces the need for staff to create, file, locate and update hardcopy records.
- Flexibility to support global HR processes by giving all office locations parallel, Web-based access to digital employee records instantly.
- With decentralization of workload and with the information at their fingertips, you will notice an immediate increase in the productivity of your HR staff. They will be able to find answers in seconds to questions that may have taken days when retrieving and reading through a disorganized employee file.
- A similar increase in productivity will be found for management, who will have immediate access to the information they need instead of waiting for an employee file to be sent to them. Your HR staff will have more time to work with managers to deliver business benefits through the best use of its people.
- Reduced operational costs by automating administrative activities and eliminating paper archives thus yielding savings and convenience.
- Minimized risk through improved data integrity and availability.
- Edge in HR Audit ; For example, in healthcare, auditors come in to check accreditations and license renewals. The auditors can access and they have everything at their fingertips. Auditors respond that since everything is in one place, they haven’t to flip through files.
- If the original employee files go missing, the company still maintains a valid legal copy of the employee file.
- In HR, the requirement is to keep some employee files for life of the employee, even after the employee leaves the employment of the company so the ability to move employee files to a long-term storage media could be critical when dealing with large numbers of employees.
- Employee file archiving is available, which is the ability to overlay data onto a predefined template and store it as a PDF. It also allows a company to store pay slips with the original logos, which are particularly relevant where a company has been purchased and rebranded, but are required to keep copies of employee filing in the original format as they were supplied to the employees.
- The employee files can be stored on cloud which will improve efficiency, access to HCM data, reduced cost.
- The value of minimizing paper use is echoed by Beth Fox, Senior Analyst/Program Manager at Genesis Health System, who notes that “employees don’t get out of their chairs to print or fax employee files, and we avoid the cost and potential security risk of producing multiple hard copies.”
- Portals benefit both sides of your operation, while contributing to your overall goal of optimal productivity. An employee handling their own paperwork enables HR to focus their efforts on recruiting and performance management; instead of paying your employees a dollar a minute to sort out HR issues between each other, that dollar is spent on finding the right new hire for your organization.
As with more transaction-oriented business processes, employee file management has the ability to completely transform HR operations for the better. In the words of William Carter, Vice President of IT for Houston Community College, it “started out as a nice system to have, and quickly developed into a mission-critical piece of our system.”
Benefits to employees
Like self service in HRM, direct access to files will empower your employees and help your organization with employee engagement and retention.
Additional benefits include:
- Full audit trails are provided with the activity log. This ensures the company adheres to strict auditing requirements and users can access the logs at any stage to see what has happened with that employee’s employee filing.
- This eliminates the need to interact with HR entirely. Where security protocols permit, the employees themselves can access their own employee files, including tax withholdings, benefits information and other information, and make needed adjustments independently, instantly verifying the changes desired while not requiring HR personnel to take time from their own routines to receive the request, look up the employees’ forms, make the change and return a confirmation message.
Key Capabilities of Employee File Management
For organizations there are good reasons to adapt to Employee File Management:
- Paper and digital file consolidation – Collects, digitizes, and centralizes all employee employee files and master data; use scanning and image capture functions to eliminate paper files.
- Employee self-service and shared-services support – Provide employees and managers with secure access to relevant files.
- Process automation – Integrate workflow for complex review and approval processes and routine employee file-related inquiries.
- Archiving – Securely archive employee files in accordance with legal regulation.
- Advanced Reporting – Reports in SAP GUI enable the HR administrator to get an easy overview over existing, missing and outdated employee files.
- Drag & Drop in SAP GUI and Employee file Attributes.
- Documents can be directly scanned to SAP if the user has a desktop scanner attached to their computer. When a user selects the option to store a employee file to EFM, they are offered the option to load from file or scan the employee file directly. This prevents users having to scan to desktop, save the file and then load the file manually from SAP. EFM provides mass scanning to HR.
- The ability to delete employee files with approval. When an HR user wishes to delete a employee file, they can forward the employee file to an authorized user for deletion along with a reason for the deletion. This ensures that the company has an auditable history of deletions along with the reasons for them.
- A “follow up” on employee files is allowed. If a particular employee file (like a visa) has an expiry, EFM can automatically notify the user of the expiry so there are no nasty surprises at a later stage.
- The viewer supports a wide variety of formats and includes highlighting and annotations.
For larger organization where HR is finding it difficult to manage the volume of files associated with having a large number of employees, this would be a good application to help reduce the workload for HR. This is also particularly important where customers have a shared services environment and all employee filing is managed centrally as the administrative workload is increased exponentially and the ability to manage files electronically becomes a major cost saving when you consider the pure volume of files to be stored and managed in one location.
The integration with ESS also opens the door for companies to let their employees help with the employee file processing and streamline their business process. If employees are able to scan and submit their own employee files as supporting employee files, it reduces the business process times and improves productivity.
Employee file Management solutions offer essential support for organizations looking to improve business outcomes. Yet according to survey, organizations still struggle to build a business case for these solutions due to lack of budget (63%) and lack of support (44%) as demonstrated below.
Cloud solutions are transforming the HCM technology landscape and providing benefits that extend beyond HR into the overall business. Although some organizations are still hesitant to lose control over their data, the benefits of the cloud far outweigh the risks. Organizations leveraging cloud solutions are able to see an improvement in efficiency, cost reduction and greater access to data.