Did you know that it costs businesses an average of $15 to $20 to handle just one paper document? This includes the cost of printing, storing, retrieving, and managing files. A process that adds up fast when you multiply it across hundreds or thousands of records. We have seen reports showing that HR teams spend almost half their time on admin tasks like managing and searching for files. That’s a huge drain on your resources.

But there’s a better way out of this. HR Document Management System (HRDMS) can bring order to this disappointing chaos. Through this blog, we will help you uncover the cost-saving benefits of document management system software and how they can impact your organisation’s ROI. So, gear up to treasure a trove of helpful insights.

What Benefits Does HR Document Management Software Offer?

When it comes to the benefits of HR document management system software, we can broadly sum them up into four key categories: boosting efficiency, cutting costs, enhancing security, and improving employee experience. Let’s take a closer look at each one to see how they can improve your HR operations.

Improving Efficiency & Productivity

An HR document management system is a powerful tool designed to simplify a series of HR tasks. For instance, it can automate repetitive, time-consuming workflows and reduce the need for you to attend them manually.

Secondly, with these systems, you can gain quick access to important documents. If you are a company focused on operational efficiency, automating tasks to get more done in less time is crucial. Here are the key efficiency and productivity benefits document management solutions offer.

• Automates HR processes like onboarding, reviews, and recruitment.
• Reduces paperwork by storing and retrieving documents digitally.
• Provides instant access to documents across all departments.
• Sends reminders to ensure timely HR task completion.
• Keeps all employee data in one easy-to-search system.

Cutting Costs

By using an HR or SAP document management system for your important documents, you’ll find countless ways to save money. The system effectively eliminates the need for printing and storage. With all documents available and easily accessible in digital format, you’ll also save money on compliance-related last-minute expenses and avoid penalties.

• Cut down on paper usage and eliminate the need for physical storage.
• Cloud-based document management system reduces IT costs.
• Avoid costly penalties by ensuring compliance with data regulations.
• Eliminate expensive servers and on-site IT support needs.
• Scale efficiently when you have to, without the burden of extra costs.

Enhancing Security & Compliance

If you have sensitive employee information that requires advanced security features, document management systems offer great protection. Take for instance employee's salary information. You don’t want it to be seen or accessed by anyone. Whenever you add such data to the HR document management software or modify existing documents, the system encrypts the data, logs the change, maintains secure backups of all records and restricts access to authorized personnel.

• Encrypts sensitive data like salary information and personal employee detail
• Restricts document access based on employee roles and security clearance
• Records who views and modifies documents for accountability purposes
• Maintains secure backups to protect against data loss incidents
• Ensures compliance with data protection regulations through automated safeguards

Improving Employee Experience

The user-friendly portals featured on modern document management systems bring information to employees' fingertips. Employees can easily access their onboarding checklist, complete all their paperwork online, download the employee handbook, view benefit options, and track their onboarding progress—all from a single dashboard.

• Employees can view various documents like tax forms anytime online
• New hires can complete onboarding paperwork digitally before starting their day one
• Staff can manage training materials and company policies through the online portal
• Teams can collaborate on documents in real time from any location
• Employees can update personal information without needing HR assistance

Calculating the ROI of the HR Document Management System

Calculating the return on investment (ROI) for an HR Document Management System requires a thorough analysis of both the financial impacts and the operational improvements it realizes. To begin with, let’s establish baseline measurements of your current operations by tracking time spent on manual document handling, storage costs, and administrative overhead.

Direct Cost Savings

To figure out how much document management system software can help you realize in terms of direct cost savings, calculate the reduction in paper-related expenses, including printing supplies, physical storage space, and filing equipment. Track the hours saved on manual tasks like document filing, retrieval, and distribution, then multiply by employee hourly rates to quantify labour savings.

Let's say your company processes 5000 documents annually. Without a document management system, you will need to spend on paper, printing, storage, and labour. The following break-down of it will give you a better picture.

Paper-related costs

Paper and printing: ₹5 per document (5000 documents) = ₹25,000

Storage and filing equipment: ₹20,000

Total paper-related costs: ₹45,000

Labour savings

Employees spend 2 hours/week on document tasks.

3 employees x 104 hours/year = 312 hours.

At ₹500/hour (average hourly rate), labour cost = ₹1,56,000.

Total savings:

Paper costs: ₹45,000

Labor costs: ₹1,56,000

Total annual savings: ₹2,01,000

Therefore, switching to a document management system could save your company approximately ₹2, 01,000 annually.

Efficiency gains

Next, let’s evaluate the efficiency gains from implementing document management system software. This can be measured by tracking improvements you see in terms of process completion times, like how much faster employee onboarding or benefits enrolment becomes. We can also factor in the reduction in errors and time spent correcting them, along with the value of recovered hours.

For example, if onboarding time reduces from 5 hours to 2 hours per employee, with 50 new hires annually, that’s 150 saved hours. At ₹500 per hour, this will save you ₹75,000.

Compliance and risk mitigation benefits

Benefits achieved from maintaining document compliance or mitigating risks from non-compliance will definitely make sense when we try to get a better perspective on the ROI of the HR Document Management System. To do this, assess the reduced risk of penalties from proper document retention and the prevention of data breaches. Factor in savings from faster audit preparation and reduced to zero legal exposure.

Broader Organizational Impacts

Finally, we can examine the broader organizational impacts of document management system implementation. Asking employees how they find the new document management system and factoring in how they rate the improvements in response times and service quality is a good start. Also, it is worth calculating productivity gains from employees having immediate access to their needed documents.

While some benefits like improved employee experience or enhanced reputation are harder to quantify, they can still be factored into your ROI calculations. Most organizations find that HR document management software systems pay for themselves within 12-18 months through combined hard and soft cost savings.

Choosing the Right Document Management System – Key Aspects to Focus on

Since a document management system is a vital tool for HR efficiency today, one must choose the right one with a lot of careful thought and understanding of its impact on their business. Here are the top criteria to consider.

Evaluate Business Requirements

Analyse your HR team's document handling needs, including volume requirements and file type diversity.

Check System Compatibility

Verify that the document management system software can work harmoniously with your current HR tech stack and operational processes.

Emphasize Data Protection

Implement a system that runs on advanced security protocols and with granular permission settings for enhanced data safety.

Verify Growth Adaptability

Select a solution that is capable of expanding alongside your organization's evolving documentation demands.

Be Convinced of User-friendliness

Choose a platform with straightforward navigation to ensure quick team adaptation and widespread usage.

Verify Regulatory Alignment

Choose software that maintains compliance standards relevant to your industry and geographical location.

Evaluate Technical Assistance

Factor in the availability of comprehensive vendor support services and staff training resources.

Compare Costs

Assess the complete cost structure of the document management system, including initial investment and recurring expenses, to ensure ROI.

Summing Up

How did our thorough review of HR document management systems help you?

Picking the right document management system software is a smart move for your company’s future.

By carefully evaluating your options and choosing a system that matches your HR goals, you will be able to streamline your document workflow without compromising the security or compliance of your sensitive data.

Want to simplify your work around HR docs? Mewurk’s document management system is made for modern HR teams like yours. Book a demo today and discover how we can help you organize and secure your document management.