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Improved technology and security are prompting HR departments to shift more functions to paperless processes. In the not-too-distant future, “Everybody will be paperless. It’s inevitable,” said Matt Peterson, president and CEO of Utah-based document management services provider eFileCabinet.
Technology experts and HR professionals say implementing computer-based systems that eliminate the need for paper can save time and money. “Productivity and efficiency are the No. 1 reasons for people to go to a paperless system,” said Peterson. Such systems significantly reduce the storage space needed. And they are designed to accommodate the vast and changing array of compliance issues that keep HR professionals awake at night. For example, some systems can alert HR when an increase in an employee’s hours might have implications under the Affordable Care Act.
There are risks with going paperless. “If you go outside for a paperless solution, there will be security and integration issues,” said Morgan Yeates, research director for the HR business process outsourcing market at Connecticut-based IT advisory company Gartner.
Security is a concern with any electronic records. Databases housed in the company headquarters can be hacked. Employers might inadvertently gain access to documents they shouldn’t see—such as private employee medical information. Data must be backed up to avoid catastrophic losses. Security controls must take into account employees who access databases remotely through mobile devices.
When HR information is stored in the cloud instead of the company’s server room—a trend that experts say is accelerating—these same issues exist. And IT staffs might have additional concerns with security in the cloud. However, regardless of the storage method, “Most of these risks can be dealt with,” said Damon Lovett, senior consultant for Texas-based HR tech consulting firm KnowledgeSource. Effective passwords, attention to users’ access rights and encryption of sensitive data are common tools.
In addition, providers of paperless solutions are helping organizations integrate their systems and applications to work together seamlessly. “The vendors have really stepped up,” said Lovett.
Yeates said that many HR departments have eliminated most of their paper from payroll administration and some other functions but have been hesitant to do so with processes such as performance management. Kicking the paper habit “has been a pain point for HR for a number of years,” said Lovett.
A report scheduled to be released in June 2015 by global professional services firm Towers Watson reveals that 79 percent of HR departments surveyed that use technology for core compensation activities say that the technology is effective, yet 47 percent of them still use paper. Similarly, 79 percent of HR departments using technology for global grading or job leveling say that the technology is effective, yet 42 percent still use paper.
“People resist change,” said Rock Regan, director of the public sector practice group of Massachusetts-based workforce management systems provider Kronos. He said HR professionals skeptical of paperless solutions often tell him after implementing such a system: “How did I live without it?”
Still, HR might want to preserve some data, such as certain contracts and documents involved in litigation, in their original paper form as well as digitally—at least for now. But the day might come when the need for paper will vanish, tech experts say.
Jeff Pickard, president and founder of Utah-based Lucion Technologies, which provides paperless office solutions, noted that these systems allow HR to search and manipulate all the types of data that they store. “Paperless is more than just converting documents to digital,” he stated. “It’s about what you can do with the data.”
In the Trenches
At TechnologyAdvice, a company based near Nashville, Tenn., that provides just what its name suggests, the process of using paper HR forms and transferring data to spreadsheets became less manageable as the firm grew to about 50 employees. And the task of managing who could access various documents became more complex—particularly with many key employees on the go and the increased use of mobile devices.
Given the company’s mission, a paperless HR system wasn’t a hard sell for HR manager Heather Neisen. However, implementation was a challenge. She had to take time to explain it to users in team meetings, through group demonstrations and via one-on-one sessions. She created a PowerPoint presentation just to answer repeated questions about the payroll tool. Neisen found herself commenting frequently about various applications: “This is going to make your life so much easier.” As staffers became comfortable, “They gradually took on each tool.”
Neisen’s work didn’t stop there, though. There was no magic button that could import the accumulated paper forms associated with recruiting, hiring, benefits, performance management and other key aspects of HR. “I had to scan every single document,” she said. In addition, she had to customize each user’s permissions. Still, she said, the benefits are clear.
An improved workflow is a big plus, she said. Calendar alerts are automatic. Neisen has advanced HR metrics at her fingertips. Job applicant record-keeping that formerly took her more than a day can now be done in about an hour. “It’s amazing how much time it saves,” she said.
The HR department at the Cal Poly Pomona Foundation, which supports the California State Polytechnic University, Pomona, near Los Angeles, also was bogged down in paper. Chief Employment Officer Dennis J. Miller came onboard several years ago to find four document platforms, including a homegrown database. “We had a lot of old-school processes,” he said. “It was a mess.”
He and a combined HR/payroll staff of four people oversee 900 to 1,300 employees at a given time, many of them students. The students come and go, and their addresses change frequently. Originally, two computer applications had to be updated manually for each such revision. Conflicts were common. Yet some staff opposed a paperless system. “People said: ‘Why do we need that?’ Change is uncomfortable.”
Miller is glad that he insisted on implementing a comprehensive paperless solution. Like Neisen, he said that improved workflow is one of the chief benefits of going paperless. Hiring a student used to require weeks of paperwork; now it can be accomplished electronically in a single day—with minimal involvement by HR. “It has changed the whole dynamic of hiring people,” he said. “It has shifted the accountability and ownership.”
The move to paperless HR prompts organizations “to rethink how you process tasks,” added Miller. “The goal is to forget about how you do it today and to let the software do it.” If colleagues seek to maintain outdated processes, he advised: “Resist, resist, resist.”
Steve Bates is a freelance writer in the Washington, D.C., area and a former writer and editor for SHRM.
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