Storing and organizing personnel files plays a very important part in running a business.
State and federal regulations determine what information companies should preserve and for how long, so learning how to manage employee personnel files plays a vital role in running a successful company.
You can organize your personnel files chronologically by each employee or sorted by separate document type. Also, label your files very carefully and protect any sensitive data with security measures.
Below, I will explain everything about personnel files and how to organize them properly.
What Is A Personnel File?
A personnel file represents a place where all the important paperwork associated with each employee’s employment with the company is being stored.
Typically, companies preserve personnel files in categories for confidentiality reasons and convenience. The following files make a complete worker’s file.
- I-9 form that’s usually kept in a separate file.
- Payroll file that includes all the data and documents associated with pay, like tax forms, etc.
- A medical file that includes files of medical leave, emergency contacts, and other medical data.
- Personnel file that includes details about the employment.
The HR department usually keeps the personnel files. Other members of the business may have access to some of the files in the personnel file. However, generally, the data is confidential.
What To Include In A Personnel File?
A personnel file includes different documents. Certain files will depend on the person and their position in the company. Overall, the following documents make a complete personnel file.
- Work application
- Resume and cover letter
- Education verification
- Employment verification
- Job description
- Work contract or offer letter
- Official forms like promotion requests
- Employee handbook receipt
- Formal feedback
- Termination files
- Other files associated with the worker’s job
Employee records also include a medical file and a payroll file. Keep these employee files separate from the personnel file for easier access and better organization.
- Emergency contacts
- Health insurance forms
- Medical leave requests
- Beneficiary information
- Family and Medical Leave Act paperwork
- Accident reports
- Employee’s compensation claims
- Doctor’s notes
- Other employee records including medical data
- W-4 form
- Payroll deduction forms
- Pay authorization form
- Attendance records
- Advance pay request forms
- Bonus or award paperwork
- Employee raise paperwork
- Receipts for reimbursements
- W-2 form
- Other employee records associated with money
How Should Personnel Files Be Organized?
Nowadays, it’s a lot safer and easier to store personnel records in digital format. Therefore, I highly suggest that you invest in good HR software that meets the needs of your company.
This type of software provides smart tools to work with, so you don’t have to deal with annoying papers anymore. You can begin organizing your files by picking a sorting system and dividing the employees into categories. Then, add the vital files and leave the less important ones at the end.
Below, I will teach you how to organize both hardcopy files and electronic personnel files. Keep in mind that if you opt for a digital format, you will make your life and work a lot easier.
Organize hardcopy files
First and foremost, I highly suggest investing in file cabinets. Then, arrange your cabinets according to the type of files they hold.
Never allow different types of employee files to mingle in the same cabinets. Finally, follow the next steps on how to organize your hardcopy files.
Chronological organization system
If you prefer to organize things chronologically in your mind, this type of organization method is perfect for you. To integrate this method, you will make a separate employee file for each person.
Then, you will import all of the necessary documents in chronological order in that file. For instance, one worker’s file might start with a job application, CV, cover letter, and W-4. Finally, import the most recent documents such as annual performance evaluations behind the basic documents.
Document type organization system
If you tend to look at the bigger picture often, the documents-related organization system makes a great option for you. To incorporate the documents-related method, you will need to group files by document type.
Meaning, you should keep all the similar files together for every worker. For instance, you could make a file for all of the workers’ drug tests, another for all their medical records, and yet another for employee performance evaluations. Also, organize each file alphabetically for easier access.
Include all the vital documents
Usually, governments have specific laws in place associated with documents companies should keep for each worker. Therefore, make sure you check with national and local laws to know what documents you should include in your personnel files according to their requirements.
The personnel files should include all data associated with the hiring and application process along with the relationship between the company and employees. This covers documents associated with workers’ recommendations, performance evaluations, and even disciplinary actions taken.
Most national and local laws require companies to preserve documentation for at least 3-5 years, even if they no longer associate with a certain employee in case of a future issue.
Backup your hardcopy files with digital files
It’s important to keep personnel files organized and keep original documents. However, it’s also a smart idea to backup your hardcopy files with electronic copies. This could be super useful if anything happens to the hard copies. They could get lost, destroyed, damaged, etc.
Organize electronic files
As I already mentioned, investing in reliable HR software can do wonders for your business. And if you take my advice, follow the next steps on how to organize your electronic files afterward.
A document-based or employee-based organization method?
Make your pick according to your preferences. If you opt for the employee-based organization method, create folders with each employee’s name. Then, add all the associated documents.
You can also add sub-folders within each employee’s folder for better organization and easy access. For instance, you can make a sub-folder for their performance evaluations, application, etc.
If you choose the document-based organization method, make folders for different document types and label them properly. For example, make folders for application details, medical files, etc.
Then, include each employee’s details in a clearly labeled sub-folder. It doesn’t matter what method you pick as long as it’s suitable for you and makes your work or your HR team’s work easier.
Label each file folder properly
Labeling is the most important part of the organization process. Thus, make sure that you label each file clearly and properly. Anyone with access to the files should be able to understand the label.
For instance, label employee names properly like “last name, first name”. I would recommend labeling a file in the following order: Jones.Jake.PerformanceEvaluation.May2019. This label tells you the person’s name, the type of document, and the date. It’s a great way to keep any file easily accessible.
Always back up your electronic files
You should always back up any digital files in hardcopy paper form. You can also use a backup hard drive and secured cloud storage. This can prevent the loss of files in case of a computer malfunction.
I highly suggest backing up your electronic files once every 4-6 weeks. Keep in mind that this number will vary depending on how many new employees and files your company obtains in the near future.
Take safety precautions
Last but not least, I want to remind you of the importance of safety precautions. Whether you’re dealing with hardcopy files or digital files, or both, always take the following safety actions.
Keep all hardcopy files in a secured cabinet
Personnel files with sensitive information about employees should be kept locked at all times. So, make sure that only authorized people have access to the keys to your locked cabinets.
Sensitive information includes files that have information about a person’s medical information, gender, rage, age, disabilities, national origin, marital status, religious beliefs, Social Security numbers, etc.
I highly suggest that you invest in fire-resistant cabinets. They’re expensive. However, they will keep any file protected at all times. If you have electronic copies, you can skip this safety step.
Use strong passwords for sensitive digital files
Digital files that need to be safeguarded for privacy concerns should go under a complex authentication process. Only specific individuals should have access to these sensitive files, so apply stronger passwords to protect the data. Your IT professional or network engineer can help you set up passwords.
Let the payroll department take care of their payroll files
Payroll files almost always have sensitive data. Therefore, access must be super restricted. Only payroll managers should obtain access to these secured and locked files.
For instance, documents such as payment information, W-4s, time-keeping records, garnishments, and state withholding forms should be managed by a payroll department.
Organizing every employee’s personnel file isn’t that hard if you follow these steps. Also, choosing a method and sticking to it can certainly make your life easier and simplify the whole process.
What’s your preferred organization method? Do you have any organizational tips that you would like to share? If so, drop a comment, and let’s continue the discussion below!