Sometimes, when we consider adding or updating a business system, we only look at the out-of-pocket costs. When it comes to your human resources recordkeeping, this can be a huge mistake. Sticking with an old or outdated system — or worse, having no system at all — can cost your company far more than what you could ever spend on the update.

In other words, those paper files and spreadsheets that you think are “good enough” may not be good enough after all.

OK, sure. We all admit paper files are inconvenient. They’re cumbersome and take up a lot of space. But can your “old school” human resources recordkeeping hurt your business? Actually, it can! Here are just a few ways…

  1. New Hires/Terminations: Neglecting to obtain all the required documentation when a new employee comes on board can open you up to legal liability. You may have filing requirements with federal, state and/or local authorities, depending on the type of employee you’ve hired and what job they’re doing for you. If you fail to submit any of the required documents, or if auditors discover your personnel records don’t contain required forms, you could find yourself in considerable hot water with the government.

    There are potential trouble spots when an employee leaves, as well. All too often, when an employee separates from a company, there’s a delay between the time they leave and the time their network access is revoked or their email account is deactivated. In the meantime, they may be able to continue accessing your systems. Imagine the havoc a disgruntled ex-employee might wreak if he discovers he still has access to your network. (Shudder!) Even worse, think about what could happen if he found he still could access your building after hours because his security system code is still active!

    Outdated records can have a direct effect on your bottom line in other ways, too. I recently read a story about a company that forgot to “turn off” insurance premium payments for an employee who had left the firm. It cost them thousands of dollars in “premium leakage” before they discovered the error.

    An up-to-date automated HR system will contain checklists to make sure nothing falls through the cracks when onboarding or offboarding employees. As an added benefit, a formal onboarding process can improve morale and productivity by helping new hires get off to a solid start from their very first day. A comprehensive offboarding checklist enhances security by making sure network access is revoked, keys are retrieved, security codes are changed, and so forth.

  2. Security of personal information: Speaking of legal liability, I’m sure we’ve all heard stories of laptops containing employee personal information getting stolen or left behind in taxis. Paper files can be left out on a desk by accident or taken home in a briefcase. Your personnel files contain all sorts of personal and private information belonging to your employees. You could be facing a horde of disgruntled employees — and potential lawsuits — if unauthorized people are able to access that information because of your outdated system.

    Beyond that, if all your information is stored on paper or on your local computer system, what happens if there’s a fire or a flood, or you simply can’t get in to your building for a period of time? How do you notify all your employees if all their contact information is stored in paper files in the office you can no longer access? How much work would it take you to try to reconstruct all your files from scratch? Would such a thing even be possible?

    I’m sure we all remember stories from natural disasters such as Hurricane Katrina or Hurricane Sandy, where vital records stored on paper were lost forever. Loss of records can turn what was already a tough situation into a business-killing disaster.

    A modern human resources system can store employee data securely in the cloud, where it’s always accessible, and can’t be lost, burnt up, washed away or accidentally left out on a desk. For instance, AcroTime HR stores all your records in a data center that meets or exceeds Department of Defense security standards. (Meaning our data center is a lot tougher to crack than the lock on your office file cabinet, or even the password on your laptop.)

  3. Excessive turnover: Is it like pulling teeth to get managers to fill out and submit employee reviews? Does the whole exercise turn into a big paper shuffling nightmare that never really seems to accomplish anything?

    When it comes to personnel development, how do you verify employees have taken required safety courses or attended mandatory anti-harassment sessions? Do your employees know about the training opportunities you offer?

    Sometimes employees take courses on their own time, which might make them desirable for open positions within your company. Do you know about the “outside” skills and educational accomplishments of your workers? When you have an opening, is it easy for you to search to see if there’s a qualified person in-house already?

    Eventually, if employees don’t get recognition from you, they’re liable to look elsewhere. Depending on the position you’re trying to fill, recruiting and training a new employee could cost tens, or even hundreds of thousands of dollars. It’s often much more cost-effective (and good for morale) to promote from within.

    Overly cumbersome HR systems don’t help to increase compliance and can cost you good money and workers. AcroTime human resources administration includes the ability to track and easily search your employees’ qualifications, such as skills lists, courses taken and certifications earned, so you won’t overlook qualified internal candidates.

There are many other ways an outdated HR recordkeeping system could be holding your business back. Contact us today to learn more about how AcroTime’s modern, secure cloud-based human resources management solution can help you save money, reduce legal risk and increase morale by bringing your HR function into the 21st century.

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