Paper Process Problems: How Organizations are Unknowingly Creating Risk

By BJ Johnson

 
Retail, hospitality, manufacturing, banking or any business with a geographically dispersed workforce will have challenges managing paper employee files.  In many organizations remote locations are instructed to ship employee documents back to headquarters after they are completed.  This is a costly, inefficient approach, but less of a risk than asking field managers to maintain employee files. However, all too often managers end up keeping copies of employee documents that should be exclusively managed by HR. These second copies create what is known as a Shadow File.
 
Why would a manager create a Shadow File? Any of these statements sound familiar?
  • “HQ keeps loosing document I send so I better keep a back-up”
  • “It takes HR too long to send documents I need quickly so I’ll just keep my own copies”
  • “When I’m doing evaluations I like to have training records and past evaluations handy so I’ll just keep my own copies”
I suppose you could say these all sound like excuses, but before we slap the manager's hand let’s be honest.
  • Documents do get lost in transit, sometimes due to a carrier mistake.  Perhaps the form never made it in the FedEx pack, or it got mixed in with documents going to another department.  Maybe HR is behind filing so the document isn’t really lost, but it’s not in the employee file yet.
  • There will be delays sending managers copies of documents, remember we have paper employee files. HR will need to find the document, make a copy and then fax, ship or email a copy to the manager. None of these are particularly efficient or secure ways to share documents that might contain personally identifiable information (PII).
  • It does make sense for a manager to have easy access to information about his team when working on performance appraisals or compensation.
While managers are creating additional costs and risks by maintaining a Shadow Files, they are simply trying to operate more efficiently, but paper slows the speed of business. HR does need to control and manage employee documents to avoid a breach or having documents in a file that might become a smoking gun during litigation. However, managers should be able to easily access the documents they need.  
 
So how do we get rid of the Shadow Files and meet the needs of both HR and managers?  By digitizing paper employee files and implementing a service delivery model that includes an automated document management system so there will no longer be a need for a Shadow File.  By deploying the right technology both employees and managers can access documents based on rules set up by HR. Document shipping, filing and copying are administrative tasks that can be eliminated. A modern automated document management system will include workflows, e-forms and e-signatures so documents can be completed electronically, a win for both HR and Managers.  Security and compliance are also improved when the right solution is implemented. Audit history reporting will allow HR to see who has accessed a document and what they did with that document. Audit reporting is almost impossible if a Shadow File exists, it’s hard enough to maintain a manual log of who accessed a paper employee file managed by HR, forget it if you expect a manager to maintain a log of who looked at an employee file. 
 
HR is accountable for managing the retention of employee documents, how will they do that if they don’t even know what managers are holding in their files?
 
Shadow Files aren’t just a problem for HR, although their existence can be the most damaging to a company.  Secondary copies of contracts or other business documents can also be a problem.  If you are looking at the wrong version of a contract then service levels could be missed or a renewal date might be incorrect.  When a workforce is dispersed or even if you just work for a very large company paper is going to create problems.  Processes will be inefficient and costly, and security and compliance will be jeopardized.  In a business environment where we have to do more with less and speed can be a competitive advantage, paper has got to go.
 
Want to learn more about Shadow Files, and how you can take preventative action within your organization? Register for our next webinar: The Shadow Conspiracy: Decentralized Employee Files

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