Human Resources: Taking a Strategic Approach to Managing HR Records: How to Shift Resources to Support HR Initiatives

By Alan Brotman, Iron Mountain

Human Resource (HR) departments, much like other functional areas within an organization, face increasing pressure to accomplish more with less. This includes becoming more efficient when handling HR records and employee transactions, both of which continue to grow at unprecedented rates and contain private information requiring secure storage and careful handling.

Human Resource departments must also comply with more stringent regulatory obligations than ever before, in particular those related to the storage and handling of employee records as well as those with broader business continuity and disaster recovery requirements. These state and federal workforce regulations (as well as international ones) are forcing HR professionals to keep more HR records. Together, these issues have challenged HR executives to securely store documents in a cost-effective and compliant manner while maintaining easy access to them.

This article outlines these pain points and how HR executives can successfully manage their records, allowing more time for focusing on more strategic initiatives.
When it comes to managing information, HR departments face several pain points.

HR Departments Generate a lot of Paper

During a typical tenure with a company, an employee generates a multitude of documents, not including benefit forms, such as a job application, resume, confidentiality agreement and electronic signature consent agreement—documents that on average amount to nearly 20 pages. Multiply this by the number of employees, whose predominately paper records need to be generated, indexed, maintained and archived by an organization, and it is easy to see how records management presents a major challenge to the productivity of any HR department.

Documents Contain Private Employee Information that Needs Protecting

In addition to managing the sheer volume of records, corporate HR managers must ensure the privacy of employee records, regardless of their format or storage location. Large volumes of HR records containing private and other sensitive data require rigorous and consistent security controls. Implementing a system that ensures efficient information access without compromising security poses a daunting task for companies with distributed HR records. For example, faxing records or transporting them by courier could result in privacy breaches and/or lost documents along what should be a controlled chain of custody.

Most of the Documents are Regulated
Since HR documents contain private employee information as well as some of an organization’s most sensitive information, several state and federal laws exist to protect this data and ensure its privacy. These regulations apply to the protection of both paper and electronic record, and many specify the type of record that companies must keep and for how long.

Documents are Stored across Multiple Locations

Organizations often create, manage and store Human Resource records across distributed locations. These practices are particularly true for multi-national organizations. Mergers and acquisitions can create further records management hurdles for organizations because they require the incorporation of distributed HR records, both active and inactive.
These pain points cause several challenges and distract HR professionals from their principle duties and responsibilities.

Security

Corporate HR managers bear the responsibility for managing risk for employee records, no matter the location or format of those records, whether they are paper or electronic. The large volumes of these HR records – which contain private, sensitive data like social security numbers, dates of birth, phone numbers, addresses, and the like - demand a rigorous and consistent approach to security and access controls. These requirements present a significant challenge: Implementing a records management system that is efficient without compromising security (risking non-compliance penalties) across a distributed HR records environment.

Storage Cost

Most HR departments realize the productivity and cost challenges presented by HR records management. It’s estimated that a typical 10,000 employee company handles more than one million employee-related transactions a year, at a cost of between $10 and $50 per transaction.1 Most of these transactions involve an HR record. Storage space required for these files drive costs, either in leasing additional space or occupying existing real estate that could be repurposed for revenue-generating functions.
Compliance

The cost requirements of managing large volumes of HR records are exacerbated by a growing number of data privacy regulations and other laws that help increase the volume, type and access requirements for these records. Additionally, distributed record locations and the concurrent need for controlled, authorized access further complicates compliance. Many regulations specify what records organizations must keep and for how long. For example, the Fair Labor Standards Act (FLSA) and Equal Pay Act (EPA) require employment contracts be kept for three years. Other laws stipulate that companies place certain records on “legal hold” for their role in litigation.
Easy, Central Access

It goes without saying that organizations need fast access to information for meeting everyday business needs. But having quick access to records also goes hand-in-hand with responding to compliance audits and information requests during legal challenges. Many HR organizations have difficulty creating in-house operations that achieve this level of access without driving up capital costs related to labor, real estate and security .
To solve their challenges, HR professionals should consider digitizing HR records and partnering with a vendor who can manage both their paper and electronic records.

Digitizing HR Records

For many companies, the solution to managing large amounts of sensitive information is to begin to digitize their information. In doing so, these organizations seek to control costs, comply with regulations and create central access. The Association for Information and Image Management (AIIM) surveyed businesses on their prime drivers for digitizing paper records and found that efficiency and productivity, followed by concerns about compliance were the strongest motivators.

Partnering with Experts in Hybrid HR Records Management

Hybrid records management services require expertise in managing physical and digital records .
Given the complexity of creating and managing a hybrid system, outsourcing the effort may prove the most cost-effective approach. Increasingly, companies are turning to outside partners , who have invested in the latest digital technology and facilities so they don’t have to themselves. Additionally, some of these vendors have a global footprint and may already be storing a company’s physical HR records. These experts can help companies adopt best practices for HR records management and demonstrate consistent, standardized processes when required.

Approaches to Hybrid HR Records Solutions

The experienced service provider can design a comprehensive, economical program for HR records management that combines the right physical records storage and management services with specific, document conversion services that meet the HR department’s secure access requirements. With one provider responsible for both archived and active physical file management, there are significant efficiencies that translate into cost savings.
If the provider has a global footprint, standard operating procedures can ensure consistent best practices for records management across the company. The provider analyzes the records where conversion is most cost-effective for the company and can then devise a strategy for making the transformation. There are a number of scanning conversion strategies described below, but the rule of thumb should be: scan what you need only when you need it. Some will also choose to scan large segments of their HR records archive based on their business requirements and cost structure. The experienced provider can advise on the best document conversion strategy.

• Image on demand: A provider can scan records as they are requested.
• Selective scanning: A provider can use predictive tools and scan those records with a high likelihood of retrieval.
• Abstract scanning: A provider can scan a small subset of high value images within a larger record.
• Full digital conversion: A provider can categorize which back-file records need to be scanned and stored in their entirety and which do not.
In addition to helping HR departments find the right approach to back-file conversion, the service provider should also help the customer optimize the process for active file scanning and storage in a “day-forward conversion.”
In some situations, active records can remain onsite at company headquarters to allow remote access over the Internet and, presumably, also be backed up by the IT department as part of the company’s overall business continuity and disaster recovery strategy. Alternatively, records can be stored in the service provider's hosted digital document repository with 24/7 access via the Internet.

Lastly, more comprehensive service providers also offer temporary or permanent hands-on assistance for managing offsite and onsite records, active or inactive.
Conclusion:

Many HR professionals are struggling to protect and manage increasing amounts of employee data in a manner that complies with mounting state and federal regulations.
As a solution, more are beginning to digitize HR records and outsource to a vendor capable of managing both paper and digital data. The result of this approach is allowing HR professionals to maintain rapid access to employee data while keeping labor and storage costs more manageable. And with the peace of mind knowing that information is properly managed, HR pros can focus on more strategic initiatives.

Alan Brotman is a 20-year veteran of Iron Mountain and the Information Management industry. As part of Iron Mountain’s Document Management Solutions group, Alan works with customers from every industry to help them transition to electronic records. During his career, spanning management consulting, information technology and document management, Alan has helped HR professionals save money and time with managing their paper and electronic HR records.
1. Mullers-Patel, Katharina, PhD., “Human Capital Management: How Top Organizations Drive Company Profits Efficiently”, 2007 ASUG/SAP Benchmarking Study.