HR Documentation & Record Keeping [The Guide To Easiest Way]

HR documentation and record-keeping aren’t the most exciting parts of managing a workforce. Rather, it’s one of the most critical aspects of employee management. Record-keeping starts from employee contracts and payroll records to performance evaluations and compliance documents. It’s a lot of paperwork, right? 

Most organizations, if not all, struggle with keeping important files. Important documents are lost in cluttered filing systems. The constant change in labor laws makes the records keeping up–to-date. Moreover, manual data entry and outdated storage methods slow down the HR workflows and could lead to sensitive employee data risk.

Without an efficient documentation system, companies face penalties, legal disputes, and unnecessary administrative burdens. The good news? With the right strategies and tools, HR record-keeping can be easy, secure, and stress-free. 

Let’s dive into best practices that will help you stay compliant and organized.

What is HR Documentation & Record Keeping?

According to the Society for Human Resource Management (SHRM), meticulous record-keeping is vital for compliance with numerous regulations governing employer obligations. ​

But what is HR documentation and record-keeping really? When you file your company’s documents and put them in a storage room, is that called HR documentation? That is partially correct.

However, HR documentation encompasses systematically recording and maintaining all employee-related information throughout their tenure with an organization. This includes data from recruitment, employment, performance evaluations, and exit procedures. Record-keeping ensures that this information is organized, secure, and readily accessible when needed.

Now, why HR documentation is important:

• Proper documentation protects the company from potential legal issues like discrimination, harassment, wrongful termination, or wage and hour violations.
• It ensures compliance with data privacy regulations like GDPR, CCPA, etc.
• It provides valuable insights for decision-making related to hiring, promotions, performance reviews, and employee development.
• Records help identify potential risks and areas for improvement.
• Records help track employee growth and development, identify training needs, and plan career paths.

What are Important Documents in HR?

Maintaining HR documents is crucial for legal compliance and efficient employee management. These should not be thrown out after a few months or a year. These records should be kept as they can protect the organization in case of disputes.​

Key documents include:​

• Employee Records: Personal information, job applications, resumes, and emergency contacts.​
  
• Employment Contracts and Agreements: Offer letters, confidentiality agreements, and non-compete clauses.​
  
• Payroll and Compensation Records: Salary details, tax forms, and benefits enrollment.​
  
• Performance Evaluations: Appraisals, feedback, and disciplinary actions.​
  
• Training and Development Records: Certificates, training sessions attended, and professional development plans.​
  
• Health and Safety Records: Incident reports and compliance with Occupational Safety and Health Administration (OSHA) regulations.​
  
• Termination and Exit Interviews: Resignation letters, exit interview notes, and final settlements.​
  

Best Practices for HR Record Keeping

Implementing effective HR record-keeping practices is essential for organizational efficiency and legal compliance. Best practices include:​

Set Clear Goals and Policies: 

Establish and communicate guidelines on document creation, maintenance, and retention.​ You can ask yourself these key questions to set your goals and policies:

• What is the purpose of this document for your HR team?
  
• What positive changes do you expect after implementing it?
  
• What challenges can it help resolve?
  
• What critical HR issues should this document address?
  

These questions will help you identify core problems and set clear strategic goals.

Define your Approach:

The best approach to creating HR documentation is to ensure it covers all key aspects of HR. No critical area should be overlooked. 

Develop a comprehensive document that provides clear insights into:

• recruitment, 
• onboarding, 
• employee turnover, 
• performance evaluations, 
• promotions, 

…..and more.

This ensures that every HR team member, regardless of their specific role, can easily access the information they need. For example, a recruiter and a performance management specialist will both benefit from a well-structured HR document tailored to their responsibilities.

Digitize and Automate: 

Utilize cloud-based Human Resource Information Systems (HRIS) as a centralized system for document management accessible at all times. These systems allow HR teams to efficiently organize, update, and retrieve important records such as employee contracts, performance evaluations, payroll details, and compliance documents.

By using HRIS, you can reduce reliance on physical paperwork. It minimizes the risk of data loss and ensures compliance with legal regulations. 

Additionally, cloud-based storage enhances security with encryption and access controls. It protects sensitive employee information while enabling seamless collaboration across HR functions. You can explore options like Lattice to digitize and automate your documentation and record-keeping.

Ensure Secure Disposal: 

Establish clear procedures for the secure disposal of outdated records. Although outdated, they are still important and may pose a threat to compliance and data protection regulations. For physical documents, implement a systematic shredding process using industrial-grade shredders or professional document destruction services. This prevents unauthorized access to confidential data and reduces the risk of information leaks.

For electronic files, use secure deletion methods such as data-wiping software or encryption-based destruction to ensure that sensitive records cannot be recovered. Make sure that you regularly audit stored files to identify outdated or unnecessary records. This will help you enforce a policy that specifies retention periods and proper disposal methods.

Conduct Regular Audits: 

Regularly review HR records to maintain compliance with company policies, regulations, and legal requirements. Before doing so, establish a structured audit process to assess the accuracy, relevance, and security of stored documents. 

Additionally, audit spots inefficiencies in record-keeping processes and implement improvements, such as adopting automation tools or refining documentation procedures.

Think Globally:

Multinational organizations need to comply with varying regional regulatory requirements. So, make sure that your record-keeping policies are tailored based on the requirements of each region. 

You can do this by conducting thorough research on local employment laws and consulting legal experts to understand specific record-keeping obligations, such as GDPR compliance in Europe, HIPAA regulations in the U.S., or data localization laws in certain countries. You may leverage digital solutions such as cloud-based HR systems that support multi-region compliance by allowing customized access controls, storage protocols, and automated updates based on changing regulations. 

When in Doubt, Retain or Consult: 

If you are unsure whether to retain or discard the documents, it is always safer to keep it until you receive clear guidance. Retaining important records can help protect your organization from potential legal disputes, audits, or compliance issues in the future.

So, it is important that you always consult with your legal or compliance experts before taking action. They can clarify legal requirements, industry standards, and best practices related to document storage, expiration, and disposal.

Additionally, you can implement a document retention policy that outlines clear guidelines on how long different types of records should be kept based on legal regulations and business needs. This proactive approach can guide you with the proper procedures for handling documents.

Common HR Documentation Mistakes and How to Avoid Them

Errors might still occur in your HR documentation. These errors can lead to legal repercussions. 

Here are the common mistakes and their solutions:​

Inconsistent Record-Keeping: 

HR department has a lot of types of documents that should have each unique way of maintaining and keeping them. This variation may result in incomplete or inaccurate information. To avoid this, you need to standardize your procedures and train your staff. 

Neglecting Retention Schedules: 

It’s undeniable that our HR teams might forget to comply with legal retention periods. This scenario can lead to premature disposal or unnecessary storage of documents. So, you need to establish a retention schedule and make sure that your HR teams adhere to it strictly. You can utilize the functionality of some HRS to provide constant reminders. 

Inadequate Security Measures:

Insufficient protection of sensitive data can result in breaches. Not all of the members of your HR team should have access to any information. Make sure that the software has robust security protocols and access control depending on the role. 

Lack of Regular Audits: 

Without periodic reviews, errors and non-compliance may go unnoticed. That is why regular audits help maintain the integrity of records, and this can be done by implementing scheduled audits. For example, you can plot your schedule for every quarter of the year. Most HR system has a calendar feature where you can plot your schedule. 

The Role of HR Technology in Record-Keeping

Advancements in technology have been extended in HR documentation and record-keeping. Adopting HR software simplifies processes, improves accuracy, and ensures compliance with evolving regulations.

​Having HRIS offers several benefits:​

• Centralized Data Management: Consolidates employee information, facilitating easy access and management.​
  
• Automation of Routine Tasks: Reduces manual data entry, minimizing errors and freeing up HR personnel for strategic activities.​
  
• Enhanced Security: Provides robust security features to protect sensitive information.​
  
• Compliance Support: Assists in adhering to legal requirements by tracking retention schedules and generating necessary reports.​
  

How to Simplify HR Documentation for Efficiency

Simplifying HR documentation processes can significantly enhance organizational efficiency. 

You can incorporate these strategies into your process:

➡️ Implementing Digital Solutions: 

Transitioning from paper-based to digital systems reduces physical storage needs and facilitates easier document retrieval.​ Digital systems have better security and access control.

Here are some of the digital solutions you can try on, along with their specific tools:

• Document Management Systems (DMS): M-Files, DocuWare, eFileCabinet
• Cloud Storage Platforms: Google Drive, Dropbox Business, Microsoft OneDrive for Business
• Scanning & OCR Software: Adobe Acrobat Pro, ABBYY FineReader, ScanSnap
  

➡️ Standardizing Document Templates: 

Using uniform templates ensures consistency and completeness across all records.​ This standardization leads to enhanced accuracy, an easier review process, and simplified compliance.

Here are some tools you can use for this standardization:

• Template Management Tools: Templafy, XaitPorter
• Document Editors with Template Features: Microsoft Word, Google Docs
• Custom Form Builders: Jotform, Typeform, Formstack

➡️ Training Staff: 

Proper training of your staff ensures that they clearly understand documentation protocols, data entry standards, and how to use the system effectively. This reduces possible errors and boosts productivity. 

You can use Learning Management Systems (LMS) such as TalentLMS, Moodle, and SAP Litmos for the training of your staff.

➡️ Outsourcing Document Management: 

Engaging third-party services can provide expertise and alleviate the administrative burden on internal staff.​ This allows the internal team to focus on core business functions.

Here are some providers and the services:

• Document Scanning & Storage Services: Iron Mountain, Access Corp, Ricoh Document Services
  
• Business Process Outsourcing (BPO): Cognizant, Genpact, Wipro
  
• Secure Digital Mailroom Services: Canon Business Process Services, Xerox Digital Hub

Final Thoughts

Effective HR documentation and record-keeping are critical components of organizational success. You need to understand the various types of HR documents to create effective and comprehensive strategies and best practices. 

By doing so, you can avoid common mistakes and simplify the entire process. Not only that, you can also ensure that each sensitive information is protected from information leaks and complies with various regulatory requirements.