Employee Records Management: Why It Matters and How to Manage It Effectively

Vũ Khôi

Author at Wotech Electronics Blog

Managing employee records is always a critical part of every business activity, because it not only helps managers keep a clear picture of each employee's personal information, but also enables them to resolve issues that arise during work effectively. For that reason, every organization needs a rigorous employee records management system to ensure business stability.

Why Employee Records Management Matters

Put simply, employee records include information about each worker, such as: resumes, insurance, employment contracts, payroll tables, salary data, and more. The need to store this information for various uses and retrieval purposes when required makes employee records management an essential part of every company. The fundamental, most commonly cited reasons are:

• Storing employee records is mandatory under Vietnamese law, and every business must comply with it seriously.

• Effective records management helps you manage the people working in your business well, contributing to company growth.

• Records can easily be produced to resolve issues involving employees should any unforeseen events occur.

And depending on the type of record and its special nature, it will be stored short-term or permanently, and used for different purposes.

How to File Employee Records

Filing records is no simple task. To store them long-term and make them easy to retrieve and use, archiving must be done intelligently and in a scientific sequence. Below, SimERP walks you through the specific steps for filing employee records.

Classify the Records

Records are typically classified into groups such as:

• Job applications, CVs

• Employee profile information

• Payroll and benefits

• Certificates, degrees, and verification information

• Performance management documents

Classification is extremely important because it helps managers track records as effectively as possible. It also partly reflects the professionalism of the HR department's management.

Organize the Records

Once the records have been classified, the next step is to arrange them as sensibly as possible. Here are the 3 most useful organizing methods:

• Organize chronologically: Order records by the timeline of the events they document, front to back. Note the dates carefully so retrieval is easy later.

• Organize alphabetically: Sort records in alphabetical order (A, B, C…). For example, under letter T you would file in the order: invitations – statistics – correspondence – marketing.

• Organize by nature: Sort records by their nature. For example:

• Ordinary records, confidential records, top-secret records…

• Unresolved records, records in progress, completed records…

Store the Records

Records must be stored in a designated location so they can be accessed quickly and conveniently when needed. Create a systematic list of the organization's records. With this catalog, records can be arranged, managed, and looked up quickly.

• Number the stored records in pen at the top-right corner.

• On the outside of each archive binder, attach a label stating the record range (from number… to number…) for easy searching.

• Use a scanner to scan records into the computer as files, numbered for archiving.

• Use an Excel spreadsheet to create a record numbering index with annotations, and use the Hyperlink function to link to the image files that need to be stored. That way, when you need to review a record, you simply click on the record number with the hyperlink attached.

One critically important note: stored records must be checked regularly so they can be corrected, supplemented, and completed quickly and accurately.

>>>> See more: 11 Effective Ways to Manage Subordinates in Every Situation

Managing Employee Records

After completing the first step — organizing and storing — the next question is how to manage employee records as effectively and inexpensively as possible. Records management is no simple task either, as it must satisfy many factors, such as:

• Orderliness: records must be organized and used in a planned, effective manner.

• Security and privacy: given the sensitive nature of employee records, ensuring security and controlling access is extremely important.

• Legal protection: each type of record has its own legal provisions governing storage and the required level of security.

• Management effectiveness: the records stored should be essential to the work and contribute value to the business.

Below, SimERP introduces the most complete step-by-step model for managing employee records:

Step 1: Classify and organize the records

We introduced and walked through this important step at the beginning of the article. The key is to arrange everything as scientifically as possible.

Step 2: Determine the requirements and purpose of management and storage

Over time, some documents will expire or no longer be needed. Therefore, identifying expiration dates and promptly correcting, supplementing, or filtering out redundant documents is necessary in employee records management. Beyond that, legal matters should also be considered, since certain records are ones a company cannot retain ownership of indefinitely.

Step 3: Determine access needs

For each type of employee record you store, determine the following:

• Who needs access to this document? The boss, employees, or anyone with a need?

• When will that type of document be needed, and how frequently?

• How will they access it?

Step 4: Set security levels

Another matter in employee records management is setting security levels. Different types of records carry different security requirements. Also, pay attention to personal information protected by law, such as medical and disability information.

A Solution for Employee Records Management in the 4.0 Era

Nowadays, with advances in technology, data sources have almost entirely gone digital. Employee files can be managed through HR software, facilitating the automation of document creation, access, and workflow design. Many document management systems offer automatic notifications of trigger events and meet far greater demands than the physical record-keeping of the past.

Among the solutions above, let's look with SimERP at a few useful platforms that can be used to manage employee records:

Managing Employee Records with Excel

Excel is one of the relatively effective solutions for managing employee records, serving as an extremely useful tool for tracking the necessary parameters. An employee records management file includes information such as:

• Full name

• Department

• Personnel type: BOD, management, staff…

• Position: the title the employee holds

• Employment type: full-time, part-time

• Information related to education level

• Required documents: resume, ID card copy, household registration copy, etc.

• Information related to work experience and skills…

With so many different pieces of information a company must manage, an HR Excel file needs multiple different templates to manage everything comprehensively and completely. The commonly used templates today are:

• Comprehensive HR management Excel file: Provides the most general information about the staff working at the company.

• Contract management Excel file: Used to manage information on probationary contracts and labor contracts. The template is simple but carries a great deal of data requiring extremely high accuracy.

• New employee tracking Excel file: A combination of a staff list and personal profiles, used to work with employee information during onboarding.

• Departing employee tracking Excel file: Similar to tracking new hires, this process helps strip out data that is no longer needed, limiting errors and confusion when working with obsolete data.

• Salary change tracking Excel file: Tracks salary increases and decreases, job rotations, promotions and demotions, etc.

With its ability to update and process data automatically, Excel helps managers stay on top of:

• The key metrics in the recruitment tracking process.

• Smart day, week, and quarter management of employee tasks and records, making it easier to review work performance.

• Automatic calculation of metrics based on the data collected.

• Automatic daily checking, consolidation, and statistics of employee records.

However, alongside its standout features, managing employee records with Excel also has certain limitations:

• Scattered data that is hard to review as a whole: When using Excel, you constantly have to move between many different sheets, which can make management time-consuming and suboptimal.

• Weak integration capability: To manage employees, managers must combine Excel with many other tools, making management rather cumbersome. Yet Excel files lack the ability to integrate multiple software packages together. This not only eats up the person in charge's working time, but also reduces productivity and work quality.

• Hard to scale as you grow: Excel's capacity is enormous — thousands of rows and hundreds of sheets. But as the business keeps growing and data keeps piling up, Excel alone cannot keep up.

• Prone to human error: All employee operations on an Excel template — from data entry to searching, auditing, copying, and editing — are performed entirely by hand. The risk of mistakes is therefore extremely high.

Because of these shortcomings, businesses need a better solution for their employee records management. That solution can be HR information management software.

Employee Records Management Software

According to Gartner's 2020 statistics, 30% of mid-sized and large businesses worldwide will use cloud-based toolkits for HR management.

Today, with the powerful digital transformation trend — especially since the COVID-19 pandemic — it is no surprise that software is being developed more vigorously than ever.

Here are a few superior features that are making HRM software increasingly popular for managing employee records:

• Deep reporting capabilities that support HR decision-making: Which metrics matter in HR statistics? Headcount by department? Payroll and tax declarations? Average salary? The software calculates these metrics based on the stored data and then displays them in the reporting section. As a result, the business stays proactive in monitoring the company and in strategic decisions.

• Extremely tight security: HR management software offers fine-grained permissions for tasks such as assigning staff to work and granting project permissions (allowing relevant individuals and roles to view and edit).

• Accurate, rigorous data storage: Workforce data is stored entirely in the HRM software, which not only helps managers classify, find, and filter records faster, but also reduces paper use (paperless).

• A powerful platform that fits every business: Unlike Excel, which only suits small businesses and struggles with large volumes of data, HRM software allows many users to access the system simultaneously while maintaining stability.

>>>> See more: 10 Free Employee and HR Management Software Tools

The 3 Most Popular Employee Records Management Software in Vietnam

1Office

1Office is a business management software solution researched and developed on a scientific way of thinking combined with a modern technology platform, ensuring consistency, rigor, and comprehensiveness.

Advantages: It provides a management software solution that creates an online working environment on the Internet, digitizing your entire business and turning it into one unified block across HR, Customers, Tasks, Sales, and Communications. 1Office is designed and built entirely on cloud computing technology, and can be deployed, maintained, and upgraded easily and quickly — letting you work anytime, anywhere with just one device connected to the Internet.

Disadvantages: Although it covers features quite fully, 1Office's depth in each area is not quite on par, especially in marketing, CRM, and customers. Another characteristic is that 1Office's software lacks a dashboard for an overall view, which sometimes makes it difficult for users. On top of that, the software's cost is relatively high.

SimERP

SimERP is an ERP enterprise resource planning software built on Odoo — the world-famous ERP software.

Advantages:

• A comprehensive solution: Includes many management solutions a business needs, integrated in one system.

• Low deployment cost: Built on an open-source platform, SimERP lets businesses deploy at a lower initial cost than other platforms.

• An easily extensible platform: Businesses can easily integrate with third parties (shipping services, payment gateways, etc.) to customize existing applications.

• A user-friendly interface: With a drag-and-drop interface compatible with both websites and phones, SimERP makes it easy to use across many different devices.

Better yet, businesses can try the software free for 15 days, with standout modules such as Project Management, CRM, and Sales Management along with other modules. Sign up for a trial here: https://simerp.io/bang-gia-simerp/

Misa Amis

The Amis business management software is one of the first pioneers in applying artificial intelligence to deliver completely fresh experiences for customers. Thanks to its intelligent use of AI, this software offers optimized features and is widely applied across many fields.

Advantages:

• Direct connection to recruitment platforms, social media, and recruitment websites to post job listings and collect applications, improving HR management effectiveness.

• Direct connection to the social insurance authority so HR staff can declare social insurance information for the business.

• Information linking between the software's different modules: Accounting, Sales, Management, and more.

• Remote HR management on a modern technology platform, with data stored in the Cloud.

Disadvantages: Like most other ERP software, Misa Amis also has relatively high operating costs. Besides that, it takes considerable time to deploy for an entire system to meet the business's various requirements. On top of that, the software's compatibility with different devices is still limited.

Conclusion

Employee records management is one of the core elements of an enterprise's human resource management. Whether you use Excel or any modern management software, you must always have a firm grasp of the key considerations and handle them to achieve the best results.

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