Top HR Management System Problems and Solutions

Every business has its own way of keeping employee records, and saving them is some type of HR management system.

The problem with this is that the traditional methods of handling HR management, such as relying on paper-based records, filing cabinets, or scattered Excel spreadsheets, can lead to headaches, fines, and penalties.

But don’t worry.

After reading this article, you’ll know the common employee compliance problems and their solutions that will protect you and your business.

What Are Common HR Management System Problems?

Difficulty Locating Employee Documents Years Later:

One of the biggest problems companies face is that when they receive a letter or an inquiry, it could be from five years ago for a terminated employee.

Here’s an example:

Let's say five years ago, Betty was your Office Manager, and she kept all the records.

Betty had her own system and kept employee documents in places where she knew where they were. She kept all the W4s and the I9s in one place.

And she kept all the payroll records somewhere else in some other system.

And maybe she had a mechanical time clock, and she had piles of time cards with rubber bands around them.

And that was the system.

Then, fast forward five years. And Betty no longer works for the company.

Now Tom replaced her, and he’s your Office Manager.

And maybe Tom keeps track of vacation records in Excel, whereas Betty kept vacation records on a sheet of paper manually.

So the problem is Tom has no idea how to find Betty’s records for all the employees.

Tom has no idea where these pieces of paper are.

And if Betty did keep anything electronically on the computer, he has no idea which folder it's in or if it even exists anywhere on the computer.

And even if Tom was lucky enough to find some records, would he be able to interpret them?

Would he be able to read it? Would he be able to understand it?

Probably not.

Multiple Systems Lead to Inconsistent Records:

Another challenge comes from using multiple systems for timekeeping, payroll, and HR. Working with multiple systems leads to inconsistent employee records that tell different stories.

If you get audited, and there are differences in employment dates, termination details, or other crucial information, your records will create confusion.

Why does this matter?

Because if your company is audited, inconsistencies can undermine your company's credibility.

And if an employee is coming after you, you could lose your case.

Be Smart and Avoid Employee Compliance Hassles

Now you might be thinking, “These HR problems are annoying, but are they really that big of a deal?”

The answer is yes!

Here are three situations where pristine employee records are king:

Department of Labor (DOL) Audit:

At any time, a business may be subject to a DOL audit, which requires providing comprehensive employee records to address potential labor law violations, unpaid overtime claims, or other nasty compliance issues.

Class Action Lawsuits:

Businesses can face class action lawsuits from employees alleging labor law violations, discrimination, or wage discrepancies.

And if that happens to you, having well-documented records is crucial in defending your company's position and minimizing your financial liability.

Workers' Compensation Audit:

Workers' compensation audits aim to verify employee classification, assess insurance premiums, and ensure compliance with safety regulations.

So, accurate and up-to-date records are essential in providing the necessary information to minimize your workers' comp premium expenses and support these audits.

So What Happens if You Don’t Have Pristine Employee Records?

Fines and Penalties:

Inaccurate or incomplete employee documentation can result in financial penalties, back wages, or liquidated damages (which is basically code for twice the amount). That’s a big hit.

And then, you could have penalties on top of that or interest.

Legal Liability Including Personal Liability:

Inadequate record-keeping could expose you to legal liability.

And the worst part is you’re personally liable for many of these infractions, which means they can come after your house, your cars, and your personal bank accounts.

And poor documentation may make it virtually impossible for you to defend yourself and your business against these allegations.

Now do you see how important it is to maintain accurate employee records and have the ability to quickly get your hands on these records when you need them?

So What’s the Best HR Management System to Use?

Now that you know the problems, you might be wondering about the solution.

So, here it is.

The solution to avoiding inaccurate data and fines and penalties is a structured and centralized system for employee documentation and compliance.

Or a single source of truth.

Here's why:

Simple:

By implementing a unified HR management system, businesses can store all employee documentation, compliance records, and relevant information in one software platform.

No more wasting time searching for employee documents.

You’ll know exactly where everything is and easily be able to retrieve them when you need to.

Structured:

A single HR management system ensures you’ll be able to find your mission-critical employee records.

No more individual systems created by your employees.

Instead, you’ll have a structured HR system where everything lives in one place, so it’s easy for anyone to find your employee documents, even years later.

Cost-Effective:

In the past, these single-platform systems were primarily available to larger corporations.

However, technological advancements have made these solutions scalable and cost-effective for businesses of all sizes, including small and medium-sized businesses.

Now, even a tiny business with five employees can utilize a single platform, have a single source of truth, and ensure easy access to employee records without breaking the bank.

Avoid Skeletons In Your Closest and Financial Disaster:

By implementing an all-in-one, single platform, businesses can eliminate the headaches associated with searching for misplaced documents or dealing with inconsistencies in records.

This single source of truth improves compliance, minimizes your financial liability, and enables you to quickly receive your mission-critical employee documents when you need them.

Imagine no skeletons in your closet.

Where Can You Find A Single Source of Truth For Your Employee Records?

For small or medium-sized businesses, it's important to find a payroll provider that offers a single platform with one login and one employee database for all your Hr, payroll, and timekeeping needs.

Unless you’re an HR professional yourself, you probably want to avoid the do-it-yourself (DIY) offerings that only provide the software. Without the expertise of how to configure and use it, most companies fail to implement it.

You want a full-service solution that offers the “Uber” solution - both the car and the driver. This way, you can focus on running your business and making money and let them configure the system and train your team how to use it.

Don’t wait for the bad stuff to happen before you deploy a single software solution like this. Do it now.

If you have employees, this is one of the easiest, least expensive things you can do now to protect yourself from personal liability and protect your business from financial disaster.

All in all, in today's business landscape, efficient and compliant HR management is crucial for long-term success.

And with the accessibility of cost-effective, all-in-one solutions, now is the time to prioritize HR management and make the switch to a structured system.

So, why not embrace the transformation and safeguard the future of your business?

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