How to digitize employee records and manage electronically
Let's face it, you can't avoid dealing with stacks of paperwork as long as you are in the HR department. However, HR documents don’t need to be stored in paper format. Further, there are a number of drawbacks to keeping all that paper. Paper documents take up a lot of space and companies often incur additional expenses just for storing boxes full of documents that are rarely if ever accessed. Paper can be damaged in storage by moisture, heat, mold/mildew, etc. Retrieving paper documents is time-consuming and inefficient.
As Professional Employer Organization, we manage a significant volume of employee-related documents. That is why we incorporated electronic document management in our cloud-based HR & Payroll Management software, BOR-Go. This feature in our program enables us to store all employee-related documents in one secure place and access them anywhere at anytime.
Having been in the HR outsourcing business for more than 20 years, you can imagine the amount of storage space we needed for all of our paper-based records. Furthermore, we needed to rent off-site storage and incurred hundreds of dollars per month in additional expenses to maintain safe and secure storage. However, once our BOR-Go document module was completed, we implemented our “Project Go-Green" initiative to digitize all of our paper documents and eliminate our need for document storage. Although it took two months to complete the project, we are already enjoying the benefits of our effort.
We realized many of our clients face the same document storage issues so we have decided to share our project experience with you. For a surprisingly small investment in equipment, any company can clear out its document storage space and implement a scanning procedure to keep up with current paperwork.
Disclaimer: The information contained herein is provided for your convenience and its accuracy and completeness is not guaranteed. Back Office Remedies, Inc. and its affiliates and agents are not responsible for the accuracy of the information contained herein. This article is not intended to be, nor should it be considered to be, legal advice. You should consult a qualified professional for any questions or concerns you may have.
The Process Overview
- Determine the retention periods for each category of documents
- Scan documents with a document scanner
- Upload scanned documents to BOR-Go
- Securely dispose of original paper records
Tools you need
- Document Scanner:
There are a number of desktop scanners on the market but we highly recommend you use a document scanner with the following functions to improve your productivity:
- Automatic document feeder
- Duplex Scanning – Captures both sides of the document at the same time
- Optical Character Recognition (OCR) – Identifies characters and converts scanned files to computer readable text format. This function makes scanned documents searchable.
We used the Fujitsu “ScanSnap iX500”, which can scan 25 pages a minute and has all of the functions above.
- OCR Software (If your document scanner doesn’t have OCR feature):
There are many free tools but we like Adobe “Acrobat Pro DC”. ($14.99/month)
- Quality cross-shredder or professional document shredding service:
Any records containing confidential, personal or financial information should be cross shredded or incinerated to protect employee privacy and to comply with applicable laws.We recommend utilizing a professional shredding service as they have the proper equipment and will provide certification of destruction.It is cost effective and efficient to engage a service rather than incur the time, expense and mess of trying to destroy a large volume of paperwork.
Step 1. Determine the retention periods
Compliance is another thing that we as HR professionals cannot avoid. As you likely are already aware, there are a number of legal requirements for recordkeeping. Requirements differ from state to state, and many requirements are dependent on the particular law which applies to the type of record and the number of employees.
You should consult with a legal counsel to determine the proper retention period for your employee-related documents. General guidelines for retention of electronic and paper-based records could be as follows:
- Personnel: 7 years after termination.
- Medical/benefits: 6 years after plan year.
- I-9 forms: 3 years after date of hire or one year after date of termination, whichever is later.
- Hiring Records: 2 years after hiring decision.
- Tax Records: 4 years from date tax is due or paid.
Step 2. Scan documents with a document scanner
This is the fun part! (and most time-consuming part.) If your document scanner has an OCR function, make sure to turn it on. For ScanSnap users, follow the directions below:
- In the ScanSnap setup window, select [PDF (*.pdf)] from the [File format] drop-down list in the [File option] tab.
- Select the [Convert to Searchable PDF] checkbox.
- Click the [OK] button to close the message.
- Specify the options for [OCR options]
- Click the [OK] button to close all the windows.
Pro tip: Create separate folders by employees or document categories so that you can easily locate files when you upload documents to BOR-Go in the next step.
If your document scanner doesn’t have an OCR feature, you can use an OCR software program such as Adobe Acrobat Pro DC to convert scanned documents to PDF files that include text you can search and copy. For more information on Adobe Acrobat Pro DC, please refer to the link below.
Step 3. Upload to BOR-Go
In the document module in BOR-Go, you can upload and store all employment documents. To access the BOR-Go document module, navigate to Employee > Documents on the left menu bar.
Once you open the document module, you will see a list of employees. Select an employee whom you want to add a document to or search an employee using the search window located on the top right of the screen.
In each employee’s document folder, there are four subfolders: Hiring, Handbook & Agreements, Payroll and other. Click an appropriate subfolder and click the document icon to upload a document.
Enter a document name, Expiration Date, and select a file from your computer. If you would like to share the document with your employee, check “Visible to employee”. Also, you can choose to notify your account manager when you upload a new document by checking “Notify Account Manager” option. Then click “Submit”.
IMPORTANT: Make sure to enter an expiration date of the document based on the document retention period you determined in step1.
You can review the document you just uploaded by clicking the blue document icon located next to the document name. If everything looks good, click “✓” to verify the document.
Congratulations! Now your employee document is safely stored in BOR-Go!
Step 4 Securely dispose of original paper records
In general, original paper records may be disposed of any time after they are transferred to an electronic recordkeeping system, i.e. BOR-Go recordkeeping module, except the original records should not be discarded if the electronic record would not constitute a duplicate or substitute record as required by state or federal law.
Any records containing confidential, personal or financial information should be completely shredded or fully incinerated to protect employee privacy and to comply with applicable laws.
Also, don’t forget if litigation is pending or you are aware that litigation is likely, do not destroy relevant documents, even if they are scheduled for disposal.
Digitizing employment documents streamlines your daily HR duties even though it requires some effort and time. Make sure to create an employee recordkeeping policy which clearly identifies the retention periods of each category of document by working with your legal counsel. You will gain peace of mind once your employee documents are safely and securely stored in BOR-Go! BOR-Go will take care of everything for you: securely storing all documents; notifying you when a document needs to be updated or disposed of; and sharing documents with your employees when appropriate. If you have any questions or feedback, feel free to contact us! We will be happy to provide any tips or suggestions regarding your scanning project!
Updated on January 19, 2018 18:16