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Definition: What is a digital personnel file?
A digital personnel file is an electronic system for storing, managing and maintaining personnel data and documents of employees in a company and is therefore part of digital document management. In contrast to conventional paper files, the digital personnel file enables centralized and secure storage of all relevant information in a digital environment. The data can either be stored in a local environment within the company or in the cloud. The latter solution enables web-based, location-independent access to the data.
Read our article on digital personnel files to find out why it is worth introducing a digital personnel file and how you can use it to sustainably optimize the digitalization of your work processes and HR management.
Features of the digital personnel file
- Central storage: All information such as contracts, references, certificates, performance appraisals and proof of absence is stored in a central, digital database.
- Access security and data protection: Access to digital personnel files is strictly regulated and only possible for authorized persons. Modern encryption technologies and access rights guarantee the protection of sensitive data.
- Efficient administration: The digital organization allows HR managers to access and manage relevant information more quickly and efficiently. This leads to considerable time savings, improves HR workflows and thus ensures greater efficiency.
- Traceability and transparency: Changes to files can be logged and tracked, which increases the transparency and integrity of the data.
- Integration and automation: Digital personnel files can often be seamlessly integrated into other HR software solutions and company systems – for example, systems for electronic working time recording, digital absence management and duty rostering. Automated processes, such as reminders of deadlines or the creation of standard documents, help to increase efficiency.
Why use a digital personnel file?
Companies today are faced with an immense administrative burden caused by bureaucracy. The administration and maintenance of paper documents is time-consuming and labor-intensive. It also often does not comply with legal data protection requirements.
In addition, the scope of tasks for the HR department is constantly growing, not least due to the shortage of skilled workers and the increasing difficulty of recruiting new employees.
One solution to these challenges is to switch to digital personnel files. As part of the company’s digital document management, this offers enormous efficiency potential and numerous other advantages.
What advantages does the digital personnel file offer compared to paper files?
In addition to cost savings and a significant reduction in the workload of the HR department, digital personnel files offer a number of other advantages:
- Lower costs thanks to more efficient processes and less effort for HR work such as maintaining files
- Faster retrieval of required documents
- Audit-proof and legally compliant process and therefore better compliance
- Better data protection than with paper files
- Dispensing with paper files saves space and therefore helps to reduce fixed costs for heating and rent.
- Automatic and simple analyses to determine employees’ development and training needs
- Simple and convenient versioning of documents improves the traceability of changes
- The provision of digital templates simplifies the creation of new documents and saves additional time.
- Reduced costs for printers and paper
- Remote access to files is possible from any location
- Better adaptability to changing requirements
- More environmentally friendly due to less paper consumption
Particularly important: by combining data from payroll accounting, digital time recording and digital absence management, all processes can access a common data basis. This gives employees the opportunity, for example, to enter or query data themselves (Employee Self Service). This reduces the workload for HR employees, who can concentrate on important tasks such as recruiting or personnel development.
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What kind of documents are included in a digital personnel file?
Only those documents to which the employee has access may be included in the digital personnel file, as every employee has the right to view their personnel file in accordance with Section 83 of the Works Constitution Act (BetrVG), without having to state a specific reason.
The following employee documents belong in the digital personnel file:
- Contractual documents such as the employment contract, contract amendments, supplementary agreements and collateral agreements
- Employee master data: name, date of birth, address, contact details, social security number, tax ID, bank details
- Career and employment information: CV, application documents and references, job references and appraisals, transfers and promotions
- Remuneration and benefits data: Pay slips and remuneration statements, information on bonuses, premiums and special payments, performance appraisals and target agreements
- Absence and leave management: leave requests and approvals, sick notes and certificates of incapacity for work, parental leave, maternity leave and other leaves of absence
- Training and further education documents: attendance certificates and attestations, training and further education plans, proof of completed training and seminars
- Legal and compliance documents: Data protection agreements, declarations of consent for data processing, instructions and briefings (e.g. occupational health and safety, compliance)
- Disciplinary measures: Warnings and cautions, minutes of employee meetings, documentation of disciplinary measures
- Termination of employment: letters of termination and termination agreements, references on resignation, documentation of exit interviews
- Other documents: company agreements and additional benefits, emergency contacts and information, other relevant correspondence and documents
Which documents are not permitted in the digital personnel file?
In order to protect the privacy of employees and ensure compliance with data protection laws such as the General Data Protection Regulation (GDPR), certain personal data may not be included in the personnel file. This applies to both paper and digital versions.
- Political and religious beliefs
- Detailed health data: General data such as sick notes or certificates of incapacity for work, on the other hand, are fine.
- Genetic data
- Sexual orientation
- Court and criminal record information.
- Private communications such as personal emails and letters
- Highly sensitive personal data such as ethnic origin
- Information of concern under data protection law: for example, data collected without the employee’s consent or without a legal basis
- Note on candidacy for the works council
- Posts from social networks
Which documents in the personnel file are still required to be in paper form?
In principle, all personnel documents can now be stored in digital form. Even documents that have to be produced in writing, such as termination notices (Section 623 of the German Civil Code), can be stored digitally by means of legally compliant replacement scanning and legally compliant long-term archiving. Following the reforms to the Code of Civil Procedure and the Labor Court Act, it is now possible to provide evidence by means of so-called digital copies.
The role and authorization concept must ensure that only those who have a legitimate and work-related interest can access the files.
Personal information and documents must be stored in an audit-proof manner. This means that the legal and internal company requirements for document storage are complied with. Each digitized document has to match the original and can’t be changed. Other important criteria for revision security are
- Immutability
- Traceability
- Completeness
- Accuracy
- Protection against loss
- Availability
- Usability only by authorized persons
- Verifiability
- Documentation of the procedure
- Compliance with retention periods
Another prerequisite for the digital personnel file is that employees agree to their data being recorded digitally.
What do we need to keep in mind when it comes to protecting digital personal data?
The digital storage of personnel data in a modern system is much more secure than paper documents. Paper files can be stolen quite easily, even if they are in a locked filing cabinet. All it takes is a moment of inattention. In contrast, it is much more difficult to hack modern software for storing digital personnel files.
To ensure that digital personnel files offer the highest possible level of security, there are a few things to bear in mind:
The data must be encrypted using a modern procedure. According to Section 9 of the Federal Data Protection Act (BDSG), only the special personal data stored in the digital personnel file – such as data on an employee’s health – must be encrypted.
Observe the retention periods
The retention obligations under commercial law apply to digital personnel files just as they do to paper files. This is based on the principles for the proper management and storage of books, records and documents in electronic form (GDPdU), which have been in force since January 1, 2015. The retention period under tax law is six years. The retention period for documents used to determine profits is ten years.
For all other documents, such as employment contracts, the statutory limitation period of three years applies. The limitation period begins at the end of the year in which the claim arose. This means, for example, that the data should be stored for three years after an employment relationship has ended.
Cloud or local storage?
An important question that companies should ask themselves before switching to digital personnel files is whether they want to use local software or a cloud solution (Software as a Service, SaaS). There are various advantages to cloud-based tools:
- No in-house company server is required and there are no operating and maintenance costs for the infrastructure. You don’t need to be an expert to run your own server.
- Access is possible from anywhere via the web, for example via a browser or an app – regardless of whether employees are working on site, on the road or from home.
- The selection of cloud-based solutions is now very large.
In contrast to an in-house system, SaaS solutions are particularly suitable for smaller companies that prefer to use a cloud rather than having to afford servers. Regardless of this, digital personnel files are worthwhile for companies of all sizes, as they offer considerable advantages for human resources management and administrative work, as already mentioned.
Have you not yet digitized your employees’ personnel files? Use Papershift HR to manage personnel files and put an end to paperwork.
What’s the best way to digitize paper personnel files?
In order to create the necessary digital database for the digital personnel file, the existing paper files must first be digitized.
In principle, employers can choose between three different options for digitizing personnel files:
- by their own employees
- by an in-house service provider
- by a service provider on their premises
- The digitization of personnel files by their own employees poses two challenges: firstly, only a small group of employees may have access to the employee data, and secondly, most companies do not have the appropriate technology and infrastructure, such as high-performance scanners, to digitize the files quickly.
- When personnel files are digitized by a service provider on the client’s premises, the number of employees who have access to the files can be reduced. However, the mobile scanners used by the service provider may be less powerful than stationary scanners on site at the service provider’s premises.
- If the files are scanned off-site by a service provider, they have access to particularly powerful devices. However, each file must first be retrieved from the client’s archive and transported away. This costs time and money.
The best option depends on the general conditions, such as the size of the company. The more employees the company has, the more worthwhile it is to commission an external service provider and scan off-site.
What are the costs for companies when switching to digital personnel files?
While additional costs are initially incurred at the beginning and during the changeover – for example for the digitization of paper files or for the purchase of the required software – the costs fall significantly in the medium and long term. This is mainly due to the fact that less administrative work is required and the overall handling of personnel files is significantly simplified. Initial conversion costs for the digital personnel file include
- The investment in HR software
- Training costs for HR staff, employees and managers
- Implementation costs
- Digitization of paper documents
- Conversion of HR processes and workflows
Summary
- Personnel files in paper form create a lot of administrative work and high costs.
- Data protection is also a problem when using paper files.
- Digital personnel files enable cost-effective and consistent data storage.
- In principle, all personnel documents can now be stored in digital form.
- This benefits small, medium-sized and large companies alike.