Many companies still keep staff files on paper, making HR audits particularly scary. Employee file management software can help keep you prepared for an audit. 

No one is ever excited to hear there is an upcoming audit. If your Human Resources department still uses a paper filing system to manage employee files, there's a good chance your team is a little terrified - and with good reason. Managing paper files can be a true nightmare. Documentation is easily misfiled, lost or accidentally destroyed (careful with that coffee!). Worse yet, many companies rarely keep complete backups of their employee files due to the amount of storage space required to house all of that paper. Filing cabinets take up a lot of room! So, the question is, how to prepare for an HR audit? 

Due to the many inconveniences of managing paper, many HR departments are switching to electronic employee files. Electronic files offer a multitude of benefits over paper. Here are just a few: 

- Significant decrease in time required to file, retrieve and share employee documentation 
- Increased security and access control for protected information 
- Automatic backups, archival and shredding for retention requirements 
- Increased organization and accessibility providing easier collaboration 
- Electronic workflows for employee onboarding, PTO requests, corrective counseling forms, etc 
- Cost savings from going paperless 

Managing electronic employee files can be a challenge all its own without the right tools. That's why it is so important to look for a few key features when evaluating employee file management software. To ensure you are always prepared for a surprise audit, here are some of the things your employee file management software should include: 

Indexed Filing System 

An indexed filing system keeps your employee documentation stored using metadata about your particular documents. For example, the employee's name, document type (W-4, performance review, etc), employee status, department, office location, expiration date, etc. This metadata information is used to file your documents in the correct location automatically. This information can also be used to search and retrieve documents as well as run reports. 

Exception Reports 

An exception report can tell you which employees are missing required documentation from their folders. Some solutions offer the ability to create custom reports to fit your existing business rules. So, you can create a report that requires all employee folders to include documents A, B and C. Then, you can have that report emailed to you on a daily, weekly or monthly basis telling you which employees are missing which documents from their folders. 

Renewal Reports 

A renewal report is for trainings, certifications or other documentation that needs to be updated or... 

Read more - Employee File Management: Automatic Audit Preparation.

Article from HR.com.