Digital Transformation

Why Digitizing HR is the Key to Acing HR Compliance Audits

Stay on top of HR compliance audits with digitized document management. Digitizing HR will improve access, speed, security, and keep you audit ready.

The “digital transformation” of our economy is well underway, and there’s a high likelihood that an effort to digitize and automate compliance efforts is already underway in your HR department. Research has shown that supporting digital transformation is one of today’s top HR priorities, in part because of the continued fragmentation of the workforce into remote and hybrid environments. 

According to Patricia Sharkey, SHRM-SCP and head of HR at IMI People, one of the biggest trends for the evolved workforce will be “the continued rapid convergence of the workplace and technology and digital disruption of the HR department." Digital technology has proven itself crucial to centralizing processes, keeping a pulse on employees, and creating and maintaining a culture of “visibility, transparency and responsiveness.”

Compliance Is a Key Element of Digital Transformation

Research by Harvard Business Review has indicated that 78% of corporate transformation efforts are doomed to fail. To keep your organization in the 22% that succeed, you must take compliance seriously.

There are many regulatory and environmental factors that make HR digitization critical to keeping organizations afloat. For instance, it’s expected that 70% of today’s workforce will continue working remotely by 2025. Dispersed workforces — with home or public internet service and personal devices — put organizations at increased risk of cybersecurity attacks, data breaches, and non-compliance with information protection regulations.

Many new regulations are also being designed to continue the process of digitizing HR across all industries, such as with employee form collection on eVerify. Lagging behind the progress of the nation’s digital transformation can make it more difficult to pass HR compliance audits.

How Digital Records & Systems Support HR Compliance Audits

By digitizing HR processes, your organization will be able to:

  • Improve compliance
  • Stay audit-ready
  • Reduce the risk of errors
  • Provide instant access to needed files from any location
  • Enhance security of employee records and data
  • Deepen business insights from your own internal audits

On top of these benefits, Gartner reports that chief executives “now expect HR to actively find ways of making employees happier.” In an environment where “only 29% of employees believe HR helps them perform better,” technology presents the perfect opportunity to lead us into the future of HR and improve results.

Let’s take a closer look at how digital records in a unified, cloud-based document management system can help you to achieve compliance improvements and overall organizational success.

Simplify Employee Record Retention & Meet Regulatory Requirements

You’re legally required to retain employee files for a set period of time. When those files are digital, it’s easier (and cheaper) to store them over the long term without committing any of your office footprint to archives of old documents. A room full of file cabinets is a drain on overhead costs. 

Accelerate Document Requests During HR Compliance Audits

Electronic employee files save time. Digital document management makes it easier to track down and share retained employee files if and when it becomes necessary. Workers spend, on average, 51 minutes per day looking for paper documents, files, and emails. This amounts to over 4 hours a week (10% of a typical 40 hour work week). Save time and find needed digital documents instantly with intelligent search functions. A well-organized and structured document management system (DMS) ensures that your team is always audit-ready.

Reduce Compliance Risks Due to Costly Human Errors

Human data entry, when not paired with additional digital verification layers, has an error rate of 4%. Extrapolating that percentage shows that, for example, 100 out of every 2,500 entries will be an error and have the potential to cause problems during HR compliance audits.

Figures have shown that 82% of illicit data disclosures were the result of human errors. At the same time, an average data breach from those kinds of human errors costs a whopping $9.44M. Non-compliance due to mistakes can be avoided when collecting, transferring, storing, and sharing data with proper digital systems, double-checks, and security in place.

Access Needed Files Across a Geographically Dispersed Organization

It's common for today’s organizations to have assets and employees in more than one place. Whether your business is spread across multiple states, a few towns, remote home offices, or even just different floors in the building, compliance audits can be complicated by the need to gather documents and information from dispersed resources.

HR digitization makes it possible to provide instant access to the files you need to complete your audit, regardless of where the information was originally collected or entered into the system. Digital document management also eliminates challenges associated with employee mobility. Suppose an employee moves to a different building or regional office. Cloud-based access to a centralized system ensures that the new location has uninterrupted access to the employee’s files and no unnecessary duplicates or paper shuffling are required. Audits can be completed with a single, unified view of personnel files.

Enhance Data Security and Carefully Control Access to Sensitive Records

HR documents are rarely static and inert. It’s necessary to have a secure way to share, report, update, and manage employee files across business units and multiple processes (including HR compliance audits). Share your digital data with the government, auditors, and internal stakeholders in a secure manner with clearly defined access permissions and appropriate cybersecurity measures.

Deepen Insights From Internal Audits With HR Digital Transformation

It’s no secret that a digitized HR department is better equipped to improve an organization than an analog one. While digitizing HR can certainly assist with third-party HR compliance audits, this might not be the most impactful benefit. Per Deloitte (see chart below), the top two rationales for digital transformation across the public and private sectors are to enable faster innovation and modernize the operation. 

The deeper insights that are available for analysis with digital documents and data can be the key to self-improvement. Internal process or compliance audits are easier and faster with a digital system, more accurate, simpler to automate, and more likely to produce valuable takeaways for organizational improvements.

Are you looking for HR digital transformation solutions that promote compliance and growth? Speak with a digitization expert at Scan-Optics for a comprehensive suite of HR digitization services. We offer training, onboarding, and access services to ensure your entire team is equipped to make the most of your new digital technologies.

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