How often have you looked for a specific document in an employee’s file only to find it missing? How often have you seen your HR team keep confidential documents laying on their desk after work? How often have you discovered a bunch of employee documents in the drawer of your team member who’s left your company 2 days ago?
We have to face the naked truth: Nobody likes to file!
Yet, it’s so important that we keep employee files up-to-date. On one hand, we have a legal obligation to keep at least basic personnel files. If your organisation is ISO certified or working towards it, accurate personnel files will need to be aligned to their standards and your internal procedures.
Effective employee file management, however, goes above meeting mandated requirements and standards. It also supports the effectiveness of your organisation. Providing accurate employee information in a timely manner builds credibility of your HR team. Having all the data available, your team can carry out meaningful analyses and analytics, not only helping you to introduce the appropriate programmes but also confirming the importance of HR as a partner to drive the business forward.
Let’s have a look at the components of an effective employee file management starting with what should actually be kept in a personnel file.
Article 53 of the UAE Labour Law (Federal Law No. 8 of 1980) outlines the legal requirements for employee files. For each employee, a company shall create a personnel file which includes:
- The employee’s “name, profession, age, nationality, place of residence, marital status, effective date of service, pay and whatever changes effected on the pay, penalties invoked against him, injuries and vocational diseases sustained by him, date of service termination and causes of that.”
- In addition, leave plans need to be kept for annual leave, sick leave and other leaves.
These requirements are straightforward and form a basic employee file.
Best practices go above the legal mandates and suggest including the following information, too:
- Recruiting documents, e.g. CVs, application forms, copies of the university degree or other educational documents, assessments, references and background checks, onboarding checklists, relocation documents
- Personal documents, e.g. copies of passport, residence visa and Emirates ID, emergency contacts, home address
- Job description and relevant competencies
- Contractual documents, e.g. employment offers, employment contracts, agreements with recruitment company, letters re promotion, demotion, transfer and layoff
- Compensation and benefits documents, e.g. letters re salary increases or annual total cash/rewards statements, pay advances, loans, ad hoc bonus, short or long-term incentives or anything else related to a change in compensation and benefits
- Insurance documents, e.g. medical insurance certificates
- Performance and development documents, e.g. education and training records, goal setting records, performance reviews and evaluations, recognition letters, commendations and awards
- Disciplinary documents, e.g. warnings, counselling and disciplinary notices, performance improvement plans (PIPs), investigation records
- Claim documents, e.g. worker’s compensation claims
- Time and attendance documents, e.g. leave requests
- Records relating to other employment practices, e.g. policy acknowledgments and agreements
- Termination records, e.g. resignation or termination letters, end of service benefits documents, relocation documents, exit interview documents, offboarding checklist, copy of terminated visa.
Your organisation may choose to keep additional documents. If you retain more information, be careful not to make it a filing exercises. Instead, ask yourself what you’re achieving by keeping that specific document.
Paper vs. electronic personnel files
The UAE government introduced an initiative to be paperless by 2021. Smart Dubai 2021 is under way and especially organisations with international operations or multiple locations in the UAE are also reviewing their options to reduce their paperwork.
Working remotely, you still want to have the same access as in the office. Many cloud-based applications can provide such solutions and you may want to take it further by also generating an electronic personnel file. After all, most information would be created electronically anyway.
Electronic personnel files where you save all documents in a folder on a secured drive can save you physical filing and archiving space. You can print out documents as needed for audits, reducing your printing costs. HR software like SuccessFactor or Workday store actions like performance reviews and act as an extended personnel file. The solutions are focusing on the employee being pro-active, e.g. updating their home address when needed rather than being asked by HR to verify their recorded home address.
Electronic employee files, however, also bring some risks. Cyberattacks in June have paralysed numerous companies including Maersk and operations came to almost a stand still. In these extreme situations, paper files would have been a welcomed alternative.
If you keep electronic employee files, make them save by applying passwords. Backup electronic employee files regularly to not lose any data.
Restricted access and secure storage
Whether you have a paper-based or electronic personnel file, the content is confidential and personal and access needs to be limited. It should only be given to those with a business need, i.e. the head of the department. Not even every HR team member will need to have access to all personnel files and these restrictions would apply to them too. If the employee wants to access their file, it will need to be made available to them in a timely manner.
To safeguard the employee files, keep them in a fireproof filing cabinet which can be locked. Best practice would indicate to only open the cabinets when a file is required.
Don’t forget to also keep the keys safe. Keeping it in the pencil holder case of the HR admin might be a very popular location, however, it can be found by individuals within seconds.
Timely filing and appropriate archiving
All employees currently working for your company should have their personnel files stored in an “active employee” section. Review these files and remove any employees no longer with the organisation. An employee who have left the organisation 3 years ago should no longer be kept in the active section and their file should be archived in the leavers section.
All too often, filing is the least desired activity and hence ignored. Rather than organising a filing marathon, implement a culture where a specific time is dedicated to filing each day or week. This could be right after lunch when people are generally sluggish or on days when business is slow.
If you’ve ignored filing for some time, some time will be required and you may enlist the appropriate team members. Should you hire external help, ensure that any contractor has signed a confidentiality and non-disclosure agreement before they start filing.
Filing is of course not restricted to paper files only. Move the electronic files into the appropriate folders (e.g. share drive or the electronic employee file). Too many HR admins and professional save employee documents only on their personal drive. This undermines the desire to also have an electronic personnel file and information within it is not complete.
There are various negative consequences of electronic files being stored locally only: The HR member did not back up their laptop, the laptop is infected with a virus and the files disappear. Think about a crash of an older laptop, leading to the same effect.
Another horrible outcome is an HR team member referring to the electronic employee file, missing important information saved only on the personal hard drive of their colleague. This can also happen for paper files when the documents haven’t been filed yet. An HR member has left the organisation and when cleaning their desk, you find heaps of documents meant for the employee files, all left to be filled.
Before you’re notified of an internal or external audit taking place, be pro-active and review the personnel files (whether paper or electronic) for completeness and accuracy on a regular basis.
- Is anything kept that doesn’t belong there? For example, expired warning letters
- Is anything missing? Request the information from the employee. You may need to notify the line manager (e.g. outstanding performance reviews) or external provider like your medical insurer (e.g. medical insurance information)
- Has anything been updated since the last file review but it’s not reflected? For example, a new employee handbook has been distributed, yet, not all acknowledgements have been recorded in the personnel files.
Effective personnel file management is attainable! Review on your current practices, identify any gaps and create an action plan to maintain up-to-date personnel file. Contact us and find out how we can support you and your team in creating complete employment files.