When it comes to HR, do you huddle up in the corner, wearing a tinfoil hat to protect your business against lawsuits?
I’ll admit it. This isn’t actually 100% true of all HR professionals. However, if you are still doing your HR admin on paper, then you might as well print off a purchase order request for a new tinfoil hat. Because you’re a liability to your business.
Of course, lawsuits are not the only risk you’re running, by handling your HR admin on paper. And in this article, I’ll be sharing several very different reasons as to why doing your HR admin on paper makes you a business liability. But first, let’s look at why HR is so closely connected to law.
HR and lawsuits – a love-hate relationship since 1930
HR is a by-product of the Human Relations Movement, which originated in the 1930’s. And wherever rights are given, breaches of those rights are often quickly identified, and mercilessly punished.
So while HR’s primary focus has always been to help your organisation “achieve success through people”, the reality has always been a little different. HR professionals have more often found themselves balancing organisational practices against government legislation, to protect against lawsuits.
Discrimination. Unfair dismissal. Personal data breach. These are all terms that are time-tested in the world of HR, and that you’re probably far too familiar with. But when you do your HR admin on paper, they become a whole lot scarier.
Here are five reasons why doing HR admin on paper makes you a business liability. And if lawsuits don’t scare you, then you can skip the first point and move onto the other four.
1. You’ll see legal fees more often, and lawsuits will cost you more
Ginger Galloway is an HR consultant, who specialises in helping businesses to reduce HR risk. She says that when you do HR “the old fashioned way”, you expose yourself to unnecessary fines and fees.
“If you lose your paper logs, then you have no audit trail” Galloway explains. “This can lead to unnecessary fines and fees. Also, any legal settlements you ever need to pay out, could be increased – for example, if you have misplaced documents, such as written warnings, which are required for a legal claim.”
Galloway is an advocate of going digital with your HR admin. You should have a clear audit trail, which lets you recall documentation in a format that is easy to find and consistently legible.
2. Everything slows down because people don’t have perfect handwriting
Speaking of ‘consistently legible’, let’s talk about handwriting.
When I was in school, I got sent to special handwriting classes. Not because my handwriting was special, but quite the opposite. In the end, they gave up on me as a lost cause – and if I ever write you a letter, you’ll know what I mean.
Galloway says: “Handwritten documents run the risk of being unreadable. This can lead to problems. For example, you often end up having to track a person down to find out what they meant.”
Now, some people do have perfect handwriting. And I am sure yours is quite lovely. But if you do your HR admin on paper, then it’s not just your own handwriting that you need to worry about. Think about things like:
- Holiday requests
- Performance reviews
If these aren’t done digitally, then you really do run the risk of slowing your entire business down. You have everybody from front-line employees, to top-level managers, all creating regular documents, and all adding their own colourful handwriting to the mix.
It might seem like a small problem, but it can have serious consequences. In previous jobs, I’ve seen managers approve holidays based on the dates they think they’ve read, only to find out that the employee is still away when they need them the most.
3. You’re playing a guessing game with people’s timesheets
Jeffrey Naftal is Director of Human Resources at Prince George’s County Memorial Library System. And in Naftal’s experience, the most expensive damage from a paper-based HR system, is a miscalculation of time.
“Just because someone marks on a paper timesheet that they came in at a certain time or left at a certain time, doesn’t mean that this is accurate” he says. “And if someone comes in late but you pay them for the entire day, the company is out the money. If someone comes in early but you only pay them for their normal hours, the employee is out the money.”
Naftal says that the latter is a violation of employment legislation. And he adds that if you underpay an employee you may also be liable for any penalties and interest.
Galloway agrees with Naftal, adding: “Over or underpayment of earnings and increased errors by keying in paper time cards for payroll, creates headaches for accounting, and for the employees.”
Going digital won’t necessarily solve your timesheet issues. But for some companies, using a location-based geofence for clocking in and out can be just the tonic.
4. Critical processes are negatively impacted
According to Galloway, a paper-based HR system is very detrimental to your critical processes.
She says: “Performing a critical process, such as hiring or exiting an employee, can be done late, or incorrectly, if papers are not received in time, or are sent in late.”
You might not necessarily notice the impact of paper on your critical processes. Especially if you’ve always done your HR admin on paper files – you have no parallel to compare with.
But recruitment is actually a great example of somewhere you might want to go digital (if you haven’t already). For a start, the traditional paper-based CV is becoming yesterday’s news. But also, employees tend to apply for multiple jobs at once. If your recruitment process is paper-based, then chances are it’s also cumbersome. And that means your competitors are securing the top talent before you get a look in – and you probably don’t even realise it.
5. Your company’s entire reputation will suffer
I’m not exaggerating. This is not a metaphorical cardboard sign that says “the end is nigh”. It’s the genuine result of a paper-based HR system. Your company’s entire reputation will suffer, and it largely boils down to how happy your employees are in their employment.
“When I arrived at my last corporate HR role” says Galloway, “HR conducted internal surveys on a regular basis. It was what I called an old-fashioned HR department. And many of the scores relating to reliability and timeliness, were low. I would often read complaints about the long process we had in place to route a paper payroll change form around for the required signatures.”
Galloway says that something as trivial-seeming as doing your HR admin on paper can be directly responsible for bad internal net promoter scores. These are the scores which say how likely it is that people will recommend your company as a good place to work.
And if you don’t think that’s important to your reputation? Just compare the iconic employer Google, with any brand that has a low score on a website like Glassdoor.
Galloway also mentions poor Glassdoor scores as a knock-on effect of doing HR admin on paper: “Multiple people moving around a piece of paper for someone’s promotion that is processed weeks later? Of course that’s going to give you poor Glassdoor, or other social media, reviews.”
And we’ve said it before: Paper harms your employer brand.
This doesn’t mean you should buy a digital HR system
I don’t want you to read this article, and make an impulse decision to switch to a digital HR system. At least, not without significant due diligence and research. That’s not what I’m touting. I’m only touting the fact that paper files harm your organisation.
At the very least, I’d like you to consider the implications of paper files, and the impact this has on your wider business goals. And even spreadsheets are better than pure paper.
Don’t think for a minute that I’m recommending spreadsheets, by the way – they’re extremely slow, and they are still prone to human error. But my point is that at least they are easier to organise, and give you a more consistent format, thus removing some of the issues of a paper-based HR system.