The modern-age challenges faced by organization in managing employee records

The modern-age challenges faced by organization in managing employee records

Employee records management (ERM) is one of the most vital yet cumbersome processes when it comes to human resources. Adding to this existing burden are the complicated retention policies/ schedules and looming possibilities on an audit.

According to The Global Trade Association for Information Management Companies (PRISM), an organization’s active files grow at an annual rate of approximately 25 percent, and paperwork is a huge overhead expense. PRISM says that at any given time, between three and five percent of an organization’s files are lost or misplaced. And well, this is just the tip of the iceberg. According to PricewaterhouseCoopers (PwC), the average company spends around $20 in labor to file a paper document. Organizations shell out approximately $120 in labor to look for a misplaced document and about $220 in labor to recreate a lost document. On average, 7.5 percent of paper documents are lost completely—and of the remaining files, 3 percent are misfiled.

Over the years, we have witnessed the evolution of the ERM process from mere scanning of physical employee records to efficiently tagging and indexing the documents to make the process of retrieving employee data hassle-free. While this has resolved the challenge of storing employee records in a single repository if mishandled can lead to financial and legal penalties or litigations. Did you know, In Hong Kong, it is an offense not to keep adequate records, for which an employer may be fined up to $100,000?

The process of managing employee records has definitely come a long way but the pace at which organizations are rapidly scaling and expanding, require an equally scalable and new-aged solution to help resolve what we call the “modern-age ERM challenges”.

In this article, we are highlighting these modern-age ERM challenges that organization across the globe and their HR teams are facing –

Compliance complexities – Compliance has always been HR’s frenemy.  Organizations even today find themselves in a soup when it comes to tracking and adhering to federal, state, or local requirements for maintaining employee records.  What makes this overall process more complicated is that the retention period for each document type is different from another.

For example, the Departmental Records Schedule (DRS) requires an employer to store employment records including (but not limited to) job announcements and advertisements; employment applications, background investigations, resumes, and letters of recommendation of persons not hired; etc for at least one (1) year.

Organizations have a wide range of record retention schedules to comply with based on parameters like the industry they are in, size of the organizations, etc. Regulatory agencies such as the Securities and Exchange Commission, Financial Industry Regulatory Authority, and the US Department of Labor—among others—can impose strict fines for failing to follow the rules.

Implementing Security Measures – In WM Morrison Supermarkets plc v Various Claimants, the Court of Appeal held that the employer is vicariously liable for the criminal actions of an employee who disclosed the personal data of his fellow employees online. This well-publicized case arose after a disgruntled former IT auditor with the company sent the personal data of around 100,000 staff to newspapers and posted the data on a file-sharing website.

An ERM process/ solution is only as good as its security measures. Just in the case above, employers even today find it challenging to implement safeguards to protect personal employee information. Inadequate measures lead to some very serious damage to the overall organization and its reputation.

Integrating the HRIS with the ERM solution – To achieve a fully digitized and centrally accessible solution of employee records, the organization’s core HR and ERM system should seamlessly interface with one another. Organizations often neglect or are unable to integrate their HRIS and ERM solutions. They find themselves managing their employee data in one system and the employee files on another. This leads to duplication of efforts, incorrect data, or misplacement or mismatched employee files in the HRIS. In a nutshell, incurring a huge loss of time and money to the organization.

Unsatisfied and unhappy HR Team – A study by PwC found that when it comes to cloud adoption, HR leaders are at the forefront. However, the legacy ERM platform handcuffs the HR team by making the process of tagging/ indexing of the digitized document and retrieving of the employee records a painful process. Quite often, these platforms are not scalable adding burden to the existing chaos of handling employee records. This combined with the pressure of adhering to rules and regulations, running regular audits and unstructured storage of the digitized documents makes the HR personnel’s experience highly unsatisfactory.

Nothing in life and well, especially in the life of HR comes easy. It may not be a bad idea to regroup and brainstorm the challenges and find a solution that can truly help ease, scale-up and modernize your employee records management process.

Now that you have had time to read and reflect on modern-age ERM problems, would you like to know a simple solution to these challenges? NeeyamoWorks has recently launched its next-gen employee records management solution – NeeyamoWorks Docket™

CLICK HERE to schedule a free demo of NeeyamoWorks Docket.

For questions, feedback/suggestions, please reach out to

NeeyamoWorks Docket_Employee Records Management Solution

Leave a Reply