- HR guide
- Workforce management
Personnel files: a quick guide
A personnel file encompasses all HR and payroll documents from new, existing or previous employees. Personnel files can be found in both digital and paper forms and should include basic employee and compensation information in compliance with local laws.
Understanding what employment records to include in a personnel file helps you avoid costly fines and mistakes.
The goal of a personnel file is to gather all important employee records and information. A personnel file should include the following:
All the above-mentioned employee records are subject to your local labour laws. In fact, the first step on personnel file management is to check with an expert if the information you’re storing is compliant with the local regulations and privacy laws, such as GDPR.
The problem with paper personnel files
Due to the sensitivity of the information compiled in a personnel file, there’s no doubt that such sensitive information must be handled with care. Here are 6 reasons why paper-based personnel files are not only prone to data breach, but also costly:
1. Physical data breaches
While having a dedicated employee records cabinet is the traditional way to store a personnel file, locking it in an office protects it only from physical theft. Chances are if you forget to lock the office once, you’ll leave employee records forever exposed. One moment of distraction can make personnel files fall into the wrong hands.
2. Potential for cybercrime
You may think storing the employee files in your network is already an improvement. However, the numbers show exactly the opposite. In fact, 43% of companies in the UK were victims of cybercrime in 2018 alone and SMEs remain the number one target for cyber attacks. What’s more, the impact of cybercrime is estimated to cost the UK roughly up to $30bn per year, according to the National Cyber Security Centre (NCSC).
3. You can’t control access
As mentioned in the previous paragraph, external breaches make up a significant threat, but so do internal security breaches. Whether you keep a personnel file locked in the cabinet or on your private network, there’s little to nothing you can do to prevent unauthorised access.
4. Limited access to information
In the digital era, immediate access to data is essential. Sticking to a paper-based personnel file limits employees’ access and slows down their tasks, especially if working remotely. Not only will it be almost impossible for employees to get their work done, but it also opens the door to potential data breaches if using an unsecured network.
5. Paper personnel files are costly
Every personnel file folder costs your company money. Most of the costs incurred are unnecessary in the age of the digital era. Paper, ink, higher electricity bills, and even storage and administration costs are only some of the printing expenses. Most importantly, think about the high cost that comes with inefficient processes, preventing your HR department to focus on more strategic tasks.
6. A personnel file comes at an environmental cost
Producing a paper personnel file translates to environmental costs. Paper alone, represents a major threat to the environment, which is why you should try to reduce its usage. In the midst of the digital era, passing the bill to the environment is no longer necessary.
Manage personnel files with HR software.
Maintaining personnel files takes around 26% of an HR manager’s workweek. Luckily, HR software is here to help. Here’s how:
1. Save time with employee self-service
Take off some workload off your shoulders by allowing employees to access and update their own personnel file. By delegating the maintenance of employee’s data, you’ll improve efficiency and enjoy the many benefits of employee self-service.
2. Control who accesses a personnel file
Due to the nature of a personnel file, limiting who accesses sensitive data is essential. HR software grants limited access to sensitive information through different permission roles. For instance, assigning employees with functions such as administrators or team managers, they will only be able to access information relevant to their team. These settings prevent the personnel file from falling into the wrong hands, giving you peace of mind.
3. Never search in folders again
By storing all personnel files in an HR software, you’ll only need to upload them to the database once in order to grant 24/7 access. Consolidating all your personnel files in a single system saves you time and frees up storage space.
4. Keep personnel files safe and compliant
HR software does not only keep your personnel files safe by limiting access, but also by protecting the system with security industry standards. These safety measures, such as file encryption, provide an extra layer of security for your company’s information. Not only will you sleep soundly knowing your company’s data is safe, but also compliant with privacy law when using a GDPR compliant HR software.
5. Save the environment
Replacing paper with digital personnel files will not only reduce your company’s carbon footprint, but also improve your corporate image. By embracing a paperless office, you’ll also transmit an image of a socially responsible company and improve your customers’ and employees’ goodwill towards you.
6. Increase productivity
By moving personnel files to the cloud, you’ll put your company’s resources to more productive use. Think of the increased productivity that comes with a digital personnel file that’s accessible 24/7 and reduced processing time and data changes. As an added benefit, you’ll save the cost of generating each personnel file.
Ready to replace paper personnel files?
Making the switch to digital personnel files will boost your productivity by centralising all employee data in a single and secure system. Keep paperwork always up to date and organised in a single place. Start your free trial today and enjoy working with digital personnel files.
Simplifying HR processes is easier said than done. Know how we get it done by starting your kiwiHR free trial!