Concerning our AllegroHR Personnel Folders product–which is a hosted document storage system configured particularly for the needs of storing personnel records–I was recently asked, “What’s the difference between ECM and a personnel folders product, and why does HR need it?”  In this blog, I’ll try to answer the latter question, and in a future blog I’ll answer the former question. 

Truth be told, an ECM product could serve the needs for the human resource department’s personnel folders, but why is it that so many HR departments–despite their IT department offering a strategic document/content management product–still store personnel records in paper files?

I’ve heard quite a few reasons, ranging from privacy concerns to simply not wanting to work with IT, and ECM implementation costs being too high for HR to bear to simply status quo.  I think there are several valid points buried in the reasons:

1. Privacy; HR documents are indeed not the same class of documents as letters to clients, contracts, and vendor invoices.  Not only is sensitive personal information found in a personnel folder, but there can be HIPPA-governed protected health information (keep in mind that there’s not a government agency who will fine you thousands of dollars for a missing or incomplete vendor invoice, but there are several such agencies in the HR space).  HR is tasked with ensuring the control and the protection of this data, and (let’s be honest here) often doesn’t trust IT with this critical requirement.  If HR is lucky enough to have an HRIS function, perhaps the ECM system for storing personnel folders can be implemented and managed by HRIS, but unfortunately HRIS usually doesn’t have the clout (budget) to procure and maintain their own ECM.

2. Process; personnel records aren’t just documents and content, they are records.  That’s an important distinction because of all the compliance issues that surround HR.  Personnel records have a life span and need to have rules (that are actually enforced) in place concerning their creation, access rights, and their eventual disposition.  This implies process, and these processes are often not fully understood outside of HR, and to complicate things they’re constantly changing (e.g. the I9 confusion of the early days of the Obama whitehouse).

3. Cost; ECM is a strategic investment, and when it comes to technology strategic investments, these are assigned–as they should be–to IT, i.e. HR, even in large environments, likely won’t get the budget necessary to implement and maintain an ECM platform strictly for personnel records.

Despite the problems, the need is obviously there, and as I pointed out in a recent blog, the cost savings are incredible (automating onboarding documents alone could save a 2,000 employee company millions of dollars, not to mention life cycle personnel documents).  So what’s the HR department to do?  The increasing need and desire to save money, but strapped with the lack of ability to make a capital investment, creates a perfect argument for a hosted, Software-as-a-Service solution, such as our AllegroHR Personnel Folders. 

In my next blog on this topic I’ll discuss what’s different about AllegroHR Personnel Folders and an off-the-shelf ECM platform.

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