Employee Records Management: What HR Should Know

Employee records contain some of the most important information an organisation holds.

From employment contracts and identification documents to leave records, training information and performance documentation, HR relies on accurate employee records to manage the employment relationship effectively.

Poor recordkeeping can create administrative problems, make HR reporting difficult and increase the risk of confidential information being accessed by people who should not have access to it.

Effective employee-record management is therefore an important part of professional HR administration.

What Are Employee Records?

Employee records are documents and information relating to an employee and their employment with an organisation.

Depending on the organisation, records may include:

• Employment contracts;
• Employee personal details;
• Identification documentation;
• Payroll information;
• Leave records;
• Attendance records;
• Training records;
• Performance documentation;
• Disciplinary records;
• Grievance documentation;
• Benefits information;
• Qualifications;
• Job descriptions; and
• Other employment-related records.

The exact records required will depend on the organisation and applicable requirements.

Why Are Employee Records Important?

Accurate records help HR and management:

• Confirm employment information;
• Administer payroll;
• Track leave;
• Monitor training;
• Manage employee relations;
• Prepare reports;
• Support audits;
• Demonstrate proper processes; and
• Make informed HR decisions.

Good records also create an organisational history that can be useful when employees move between roles or managers change.

Accuracy Matters

Employee records should be accurate and kept up to date.

Incorrect information can result in:

• Payroll errors;
• Incorrect leave balances;
• Communication problems;
• Reporting inaccuracies;
• Administrative delays; and
• Difficulties verifying employment information.

HR should have a process for identifying and correcting inaccurate information.

Common Employee Information

An employee file may contain information such as:

Personal Information

This may include the employee’s:

• Full name;
• Contact details;
• Residential information;
• Emergency contact details; and
• Other relevant personal information.

Employment Information

This may include:

• Job title;
• Department;
• Reporting manager;
• Start date;
• Employment status;
• Employment contract; and
• Job description.

Payroll Information

Payroll-related records may include:

• Salary information;
• Payroll number;
• Allowances;
• Deductions;
• Benefits; and
• Other relevant payroll information.

Access to payroll information should be appropriately controlled.

Physical vs Electronic Records

Organisations may maintain physical files, electronic records or a combination of both.

Physical Records

Paper files can be useful but require appropriate:

• Filing systems;
• Storage;
• Access controls;
• Retention arrangements; and
• Protection from damage or loss.

Electronic Records

Electronic records can provide:

• Faster access;
• Searchability;
• Easier document management;
• Better version control; and
• Reduced physical storage requirements.

However, electronic systems also require appropriate security controls.

Employee Files

A structured employee file makes HR administration easier.

A possible structure could include:

Section 1: Employment

• Application;
• Offer letter;
• Employment contract;
• Job description.

Section 2: Payroll and Benefits

• Relevant remuneration documentation;
• Benefit records;
• Payroll-related documentation.

Section 3: Leave and Attendance

• Leave records;
• Relevant supporting documents;
• Attendance-related records.

Section 4: Performance

• Performance reviews;
• Development plans;
• Performance-related documentation.

Section 5: Employee Relations

• Grievances;
• Disciplinary documentation;
• Other relevant employee-relations records.

The exact structure should reflect the organisation’s needs.

Confidentiality

Employee records can contain confidential information.

HR should therefore ensure that access is limited to people who require the information for legitimate work purposes.

Not every manager needs access to every employee record.

For example, a manager may need information about an employee’s leave balance but should not necessarily have unrestricted access to the employee’s entire HR file.

Access Controls

Organisations should establish appropriate access controls.

Access may depend on the employee’s role.

For example:

HR Administrator: Limited administrative access.

HR Manager: Broader HR access.

Payroll: Access to relevant payroll information.

Line Manager: Access to information necessary to manage their employees.

Employee: Access to information concerning themselves, subject to applicable requirements.

The principle should be to provide appropriate access rather than unrestricted access.

Employee Requests for Information

Employees may have rights concerning personal information held by an organisation.

HR should have a process for dealing with requests for access to employee information.

Requests should be handled consistently and with consideration of applicable privacy requirements.

Protection of Personal Information

Employee records can contain personal information and should be handled in accordance with applicable data-protection requirements.

Organisations should consider:

• Why information is collected;
• Whether it is necessary;
• Who can access it;
• How it is stored;
• How it is transferred;
• How long it is retained; and
• How it is securely disposed of.

HR should avoid collecting information simply because it might be useful someday.

Collecting Only Necessary Information

A professional HR system should distinguish between information that is necessary and information that is merely convenient to collect.

Before collecting information, HR should ask:

Do we actually need this information for a legitimate business or legal purpose?

If the answer is no, collecting it may create unnecessary administrative and privacy risks.

Employee Records and Recruitment

Employee record management starts before the employee joins the organisation.

Recruitment records may include:

• CVs;
• Application forms;
• Interview notes;
• Assessment results;
• Reference information; and
• Recruitment decisions.

These records should be managed appropriately and should not automatically be kept indefinitely.

Employee Records and Onboarding

Once an employee joins the organisation, HR should ensure that the required employment documentation is collected and properly filed.

A new employee’s file may include:

• Signed employment documents;
• Relevant personal information;
• Bank details;
• Tax-related information;
• Emergency contacts;
• Job description; and
• Other required documentation.

HR should use a consistent onboarding checklist to avoid missing important records.

Updating Employee Records

Employee information changes over time.

For example:

• An employee changes address;
• Contact details change;
• An employee is promoted;
• Salary changes;
• Reporting lines change;
• Qualifications are obtained; or
• Benefits change.

HR should have a process for updating these records.

Employee Transfers and Promotions

When an employee changes roles, HR records should be updated accordingly.

The organisation should ensure that changes to:

• Job title;
• Department;
• Reporting line;
• Salary;
• Responsibilities; and
• Other relevant conditions

are properly documented.

Performance Records

Performance-related documentation should be maintained appropriately.

This can include:

• Performance agreements;
• Review forms;
• Development plans;
• Feedback records;
• Performance-improvement documentation; and
• Relevant correspondence.

Managers should avoid keeping important employment records exclusively in personal email accounts or private folders.

Disciplinary Records

Where disciplinary matters occur, relevant records should be properly maintained.

These may include:

• Allegations;
• Notices;
• Investigation records;
• Hearing documentation;
• Outcomes; and
• Relevant correspondence.

Access to such information should be appropriately restricted.

Grievance Records

Employee grievances may contain sensitive information.

HR should maintain appropriate records of:

• The complaint;
• Investigation;
• Meetings;
• Findings;
• Outcome; and
• Relevant communication.

Records should be factual and professional.

Training Records

Training records help HR understand employee development.

They can include:

• Course attendance;
• Certificates;
• Training dates;
• Training providers;
• Development activities; and
• Other relevant learning information.

Training records can also support organisational skills planning.

Leave and Attendance Records

HR should maintain accurate leave and attendance information.

These records can help with:

• Payroll;
• Workforce planning;
• Absence monitoring;
• Employee queries; and
• HR reporting.

The information should be regularly reconciled where appropriate.

Record Retention

Organisations should establish appropriate retention practices.

Not every employee record needs to be retained forever.

Retention periods may depend on:

• The type of record;
• Applicable legislation;
• Tax or payroll requirements;
• Business needs;
• Potential disputes; and
• Other legal obligations.

HR should have a documented approach to record retention rather than making decisions on an ad hoc basis.

Former Employees

Employee records do not necessarily stop being relevant when someone leaves the organisation.

The organisation may need to retain certain records for an appropriate period after termination.

HR should distinguish between:

Records that must or should be retained

and

Records that no longer have a legitimate purpose.

Once records are no longer required, they should be disposed of securely where appropriate.

Secure Disposal

When records reach the end of their retention period, organisations should consider how they will be securely destroyed.

For paper records, this may involve secure shredding.

For electronic records, appropriate secure deletion processes should be considered.

Simply throwing confidential documents into an ordinary rubbish bin is not an appropriate disposal method.

Employee Records and Audits

Good records make audits easier.

An audit may require an organisation to demonstrate that it has appropriate documentation relating to areas such as:

• Employment;
• Payroll;
• Training;
• Leave;
• Employee relations; and
• Other HR processes.

A well-organised HR filing system reduces the time required to locate information.

HR Records and Reporting

Accurate employee records support HR reporting.

HR may use employee data to analyse:

• Headcount;
• Turnover;
• Absenteeism;
• Training;
• Recruitment;
• Workforce composition; and
• Other people-related measures.

Poor-quality records produce poor-quality reporting.

The principle is simple:

If the underlying data is inaccurate, the HR report cannot be reliable.

Data Quality

HR should periodically check employee records for errors.

A data-quality review can identify:

• Duplicate records;
• Missing information;
• Incorrect job titles;
• Incorrect reporting lines;
• Outdated contact details;
• Incorrect employment status; and
• Other inconsistencies.

Regular data cleansing improves the reliability of HR information.

Common Employee Recordkeeping Mistakes

Keeping everything indefinitely

More information is not necessarily better.

Allowing unrestricted access

Confidential employee information should be appropriately protected.

Using personal devices for HR files

This can create security and access-control problems.

Keeping important records only in email

Emails can be difficult to organise and retrieve.

Failing to update records

Outdated information can affect payroll and reporting.

Mixing employees’ records

Each employee should have an appropriately structured record.

Keeping multiple conflicting versions

HR should have appropriate document and version control.

Poor disposal practices

Confidential information should be securely disposed of when appropriate.

A Practical Employee Records Process

A basic process can follow these steps:

Collect required information

↓

Verify information

↓

Create employee record

↓

Restrict access appropriately

↓

Update when circumstances change

↓

Review data periodically

↓

Retain according to applicable requirements

↓

Securely dispose of records when no longer required

This provides a simple framework for managing employee information.

Employee File Audit Checklist

HR can periodically check whether:

☐ Employee details are accurate

☐ Employment contract is on file

☐ Job description is available

☐ Relevant payroll information is recorded

☐ Leave records are accurate

☐ Training records are updated

☐ Performance documentation is properly maintained

☐ Employee-relations documentation is appropriately stored

☐ Access to confidential information is restricted

☐ Outdated information is reviewed

☐ Retention requirements are considered

☐ Records are securely stored

☐ Disposal processes are documented where appropriate

Final Thoughts

Employee records are the foundation of effective HR administration.

Accurate records help organisations manage employees, process payroll, monitor development, prepare reports and respond to workplace matters.

However, good recordkeeping is not simply about storing as much information as possible.

HR should focus on collecting appropriate information, keeping it accurate, protecting it from inappropriate access and retaining it for an appropriate period.

As organisations become more digital, employee records management becomes even more important.

A well-designed HR recordkeeping system should make information easier to find while protecting employee confidentiality.

Ultimately, effective employee-record management comes down to four principles:

Collect responsibly.

Keep information accurate.

Protect it appropriately.

Retain and dispose of it responsibly.

When these principles are built into everyday HR administration, organisations are better positioned to manage their workforce efficiently and professionally.

Frequently Asked Questions

What should be kept in an employee file?

Records may include employment documents, personal information, payroll-related records, leave information, training records, performance documentation and relevant employee-relations records.

Who should have access to employee records?

Access should generally be limited to people who require the information for legitimate work purposes.

Should employee records be kept forever?

Not necessarily. Retention should depend on the type of information, applicable requirements and legitimate business needs.

Should former employees’ records be retained?

Certain records may need to be retained after an employee leaves. The appropriate retention period depends on the type of record and applicable requirements.

Can employees request access to their personal information?

Employees may have rights concerning personal information held by an organisation. HR should have an appropriate process for handling such requests.

Should employee records be stored electronically?

Electronic records can improve accessibility and organisation, provided appropriate security and access controls are in place.

How often should employee records be audited?

Organisations should periodically review their records. The appropriate frequency depends on the size and complexity of the workforce.

Why is accurate employee data important?

Accurate data supports payroll, reporting, workforce planning, HR administration and informed management decisions.

Disclaimer

This article is provided for general informational and educational purposes and does not constitute legal or professional advice. Employee-record requirements vary according to the type of information, organisation and applicable legislation. Organisations should obtain appropriate professional advice when dealing with complex data-protection, retention or employment matters.

Devhulon Business & People Solutions provides HR consulting and people-management support to businesses seeking practical assistance with HR administration, employee records, HR compliance, payroll, employee relations and broader people-management processes.