Why it’s important to maintain accurate employee records

Maintaining accurate employee records has always been one of the most essential administrative duties and a requirement for businesses in order to ensure the legalities of a working environment are met and upheld.

This required task is usually the responsibility of the human resources department. In comparison with how it’s been done in the past where updates of employee records had to be done manually, we now have access to technological advances that makes it far easier by using tools like time tracking apps. In this article, we talk you through the importance of keeping accurate records in the workplace as well as introduce you to the easiest way to do this.

What is good record keeping?

There is a big difference between record keeping and good record keeping. Good record keeping involves a cohesive system that allows data and employee records to be constantly updated. You also need to be able to accurately and frequently analyze employee records as this will highlight strengths and weaknesses in your team’s work history. This information can be used to make improvements and maximize profit.

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What are characteristics of record keeping?

Record retention

Record retention is a non optional aspect of record keeping that you need to make sure you get right. Record retention refers to how long data can be stored before it needs to be discarded. Depending on your field of business, employee records will have different retention schedules and rates, but it is integral that you know what this schedule is. Otherwise you could get you in trouble if you have kept information and records for too long.

Accurate record updating schedule

Just as it is integral to routinely get rid of records, it is equally important to routinely update your records. Some records need updating more often than others. For example, clocking in and out records obviously need to be recorded every day, whilst records concerning wages or performance reviews will be reviewed less frequently.

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Responsibly dispose of records

One characteristic of good record keeping that many companies underestimate is the importance of responsible record disposal. Once you have established a record retention schedule, you will get into the habit of discarding records. However, this needs to be done in a safe and secure manner which does not risk any kind of data or information leak of employee files.

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Why is it important to keep accurate employee records?

The importance of record keeping should not be overlooked. Not only does it protect the company and its employees if any legal disputes arise, it can also help maximize the efficiency of your business. Below we explain the importance of keeping records up-to-date and confidential.

Helps you avoid negative legal disputes

Legal disputes between employees and employers are unfortunately always a possibility, which is why, as a business owner, you want to ensure that if you have to go to court, you have all the evidence and documentation you need to defend yourself.

If you have kept thorough records and have extensive employee files, you will be able to prove you paid them what they were owed if the dispute is about being underpaid, or you can prove that they always clocked in late and that your reasons for a dismissal are valid. Whatever the dispute may be, up to date and well kept employee records will help you avoid any nasty lawsuits.

Provides an overview of competency

Accurate employee records inform you on how well your company is doing and whether or not employee competency is at the expected level. Keeping a record of your training schedule and which employees have had which training will help you understand the skill set of each individual employee. Once this information has been assessed, you can develop a strategy for your employee working schedule to maximize your business efficiency and save time on tasks.

Helps employees further down the line

A healthy working environment and business relationship sees bosses advocate for the success of their employees. If this means employees choose to move onto bigger and better things, so be it. However, sometimes it can be hard for bosses to remember all the great things certain employees have done, especially if they have a big workforce.

Thankfully, if the employment records have been kept properly, you will be able to look back on a single employee’s career within your company, analyse their performance and identify their strengths to make references far easier to write.

What employee records should you maintain?

Now that you know why records need to be kept and the importance of human resource records, it also helps to know what employee records you should keep. Here is a list of some of the most common employee records and documents that companies are expected to maintain:

Job applications

The record maintaining system needs to start from the very beginning. That means keeping a record of all job applications, even for people who weren’t hired. Although this may seem like a waste of time and space, you need to keep these documents in case of any employment discrimination accusations.

Record of hours

There are a couple of reasons as to why you need to keep an accurate record of working hours. It informs the finance department of how much each employee needs to be paid depending on how long they have worked and it allows management to assess employee dedication and identify trends in lateness.

The days of manually clocking in and out of the workplace are long gone. There are now mobile apps that allow employees to record their hours and clock in and out with a simple click on their mobile phone.

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Performance records

It is important to have regular performance appraisals for your employees as it will allow you to track their progress and identify any possible issues. It is critical that you keep a record of these appraisals as if there is a problem with an employee and you eventually have to terminate their employment, you will have a record and documentation of everything that the company did to facilitate their success and to justify your decision.

Personal information

For legal reasons it is also important to keep an up-to-date record of all your employees’ personal information to make sure you are meeting the appropriate standards of care as an employer. However, this personal information is sensitive in nature and needs to be properly stored in order to avoid any data breaches.