Part One: Are Manual and Paper Processes Holding You Back?

Published On May 28, 2017

It’s interesting, isn’t it? For many departments automated workflows are commonplace, and yet, Human Resources, one of the most record-heavy and paper-intensive among them, is still largely mired in burdensome, manual processes.

Sure, HR is not completely devoid of any sort of automation, but a lot of what passes for it these days is still dependent on the (significantly slower) speed of paper. A survey of HR professionals conducted by the Association for Information and Image Management (AIIM) found that when asked the question “What is paper usage in the following processes?” an alarming number of respondents answered “a lot.”

The exact breakdowns are as follows:

• Recruiting and selection = 35%
• Employee onboarding = 48%
• Employee file management = 53%
• Policies and procedures administration = 32%
• Employee separation = 48%

I’m confident, though, that if HR departments truly understood the real costs of paper—in terms of not just dollars and cents, but in risk and inefficiency—the above percentages would dwindle to near zero.

Let me explain:

Hidden Costs

First, paper itself. Obviously, there’s the standard expense of office supplies. But the costs extended far beyond invoicing a couple dozen reams. A recent study estimates that associated paper costs (storage, copying, printing, etc.) could be as much as 31 times the purchasing costs (not including labor). So, for instance, a ream of paper your HR department bought for $5 could, in actuality, cost close to $155[1].

Add-in the fact that the amount of information an HR organization must manage is expected to explode in the coming years, and it’s not too difficult to imagine a future in which the expense of maintaining paper-based processes consumes an ever-increasing—and incredibly unnecessary—amount of your budget.

Increased Risk

HR is responsible for a tremendous amount of sensitive information. Not only must you mange highly personal employee data, but you must also protect confidential management or business information from non-managerial employees. Think of things like litigation, business strategies, layoffs or terminations, expansions, workplace investigations or performance and disciplinary actions. What are the potential ramifications if these fall into the wrong hands?

Then, of course, given the sensitive nature of HR-held information, there is also the risk of outsider threats. While the common perception is these dangers originate digitally—i.e. hackers, ransomware, etc.—the reality is most information loss comes from breakdowns in processes and procedures, such as misplaced or lost documents or employees losing files or laptops that contain sensitive information,[2] which are then compromised by opportunistic ne’er-do-wells. And with the average large organization misplacing a single file every 12 seconds, you can see why a reliance on paper-based processes can lead to reputational damage, compliance violations and regulatory fines.

Greater Inefficiency

But perhaps the greatest cost of paper is its impact on efficiency and the ability to deliver strategic value to the organization as a whole. On a high level, dependency on manual processes means HR personnel will spend more time managing files and performing various administrative tasks, and less time focusing on strategic, high-value initiatives.

And that’s just the impact upon those that work in the HR department! What about your internal customers? How would others in the business, who depend on HR, be impacted by unnecessary delays in routine processes? What about new employees who require HR to get them up and running? HR is taking a greater role in driving the overall strategic vision of the enterprise—why compromise that by relying on paper and manual processes?

Of course, that’s just the now. An over reliance on manual processes means more than just wasted time and unfulfilling days of work; it can also leave your department ill-prepared in the coming few years. In an AIIM blog entitled “8 Things You Must Know to Automate Human Resource Processes,” the author outlines five reasons why a lack of automation can be detrimental in the very near future. They are:

• Changes to Overtime Rules: A raise to the minimum salary level for white collar exemptions could result in 4.6 million employees losing their exemption immediately, and another 500,000 to one million currently exempt employees could lose their exempt status over the next 10 years.
• Big Data: Collecting, processing and analyzing “big data” is a crucial factor in identifying and managing the challenges of business lifecycles. Companies seeking a competitive edge need to use analytics to gain data-driven insights into workforce trends and take action to refine recruitment, compensation and other performance incentives to meet employees’ evolving goals and interests.
• Affordable Care Act: For employers with 50 or more full-time employees or full-time equivalent employees, the Affordable Care Act has transformed what was once an annual enrollment event into a monthly process of tracking and reporting extensive data. To comply with the law, various personnel in Tax, Finance, IT, Legal and HR may need to partner to help avoid costly penalties. Gathering the required data from multiple systems can present a challenge, so it will be become even more important for businesses to consider an integrated human capital management solution.
• Employee Engagement: Increasingly, organizations are focusing on improving employee engagement to drive better performance. According to Gallup research, employee engagement is strongly connected to business outcomes essential to an organization’s financial success, such as productivity, profitability and customer engagement. Engaged employees drive the innovation, growth and revenue that growing midsized companies need to thrive.
• Millennials: According to PwC research, Millennials will account for nearly half the global workforce by 2020. Organizations that want to attract and retain fresh talent will need to recruit this cohort of digital natives and ensure that their journey through hiring and onboarding is supported through mobile and social platforms.

Part two of the three part series examines how paper and manual processes are the enemy of efficient and effective HR organizations in greater detail.

[1] ‘The 3 E’s of Office Paper Reduction’, Carleton College, https://apps.carleton.edu/…/Office_Paper_Reduction__factsheet.pdf Accessed May, 2017

[2] SaaS Data Loss: The Problem You Didn’t Know You Had

http://ljo.es/SaaS%20Data%20Loss%20-%20The%20problem%20you%20did%20not%20know%20you%20had.pdf, Accessed May 2017