In two easy steps, you can get back all the space taken by HR filing cabinets and eliminate the costs and concerns of paper filing.
With the opening of each new position, and the arrival of every new employee, a mountain of HR paperwork and forms are generated. While HCM systems have streamlined the handling of employee data, many human resources departments still rely on age-old filing cabinets to store paper records.
Office space is finite; Paper is infinite
Eventually, the flood of HR paperwork consumes all available space. As one filing cabinet fills up with HR records, another cabinet is added. The amount of space to store paper grows ever tighter.
A filing cabinet needs about 7 square feet of office space, for the cabinet itself, and the room to file and retrieve the records held within. Inside, a five-drawer cabinet has about ten feet of usable drawer space. At 1,800 sheets of paper per foot, the cabinet can hold about 18,000 HR records. While that may sound like a lot, the number of paper HR files per employee adds up quickly. It varies, but on average as many 200 records per person are kept on file. This means that one filing cabinet might hold enough files for just 90 current and former employees.
Eventually, former employee records can be moved off to an archive and held for retention, but while they might be out of sight, the space needed to retain the records does not disappear. A standard 10” X 12” X 15” archive box holds about 2,250 pieces of paper. That’s enough room for as few as 11 former employees. Before long, there is a mountain of heavy boxes to store.
In any office, the amount of room to store paper is finite and eventually the infinite flow of paper will consume every last available square foot. Paper filing is simply not scalable.
What is the cost of space for filing cabinets?
The cost of office space varies widely depending on a number of factors including location, market value, lease, or ownership. On the low side, the fully-loaded cost of office space can be $61 per square foot annually, and on the very high side the space can cost as much as $595 per square foot! At 7 square feet per filing cabinet, if you are lucky, the space for a single filing cabinet could cost $427 per year, and if your office is in a high-rent area it will cost as much as $4,165 per year.
A single filing cabinet may not be a concern, but the problem swells as more filing cabinets are needed. For example, ten filing cabinets will take up to 70 square feet of valuable office space. That’s enough space gridlocked by filing cabinets to accommodate a productive employee!
The filing room is full
When your filing room is full, your options may be limited and costly. You could remodel and expand the room, add a mechanical filing storage system, or outsource the filing room to an expensive off-site paper storage company. For most companies, investing large amounts of money to store paper doesn’t make business sense.
Help, the floors are buckling under the weight of paper!
As paper stacks up, so too does the weight. While a single sheet of paper may be light, filed away by the thousands in filing cabinets and stacks of archive boxes, the weight of all that paper can become a serious concern. When more than a few filing cabinets are placed in close proximity, paper filing has the potential to compromise the structural integrity of a building.
Just 20 fully-loaded filing cabinets can equal the weight of a mid-size car. Imagine what the people working on the floor below would think of that!
Moving and the new office doesn’t have room for filing cabinets
When businesses move, it’s not uncommon for the new office to have less space (or none at all) dedicated for filing cabinets. Sometimes, the filing room is forgotten during space planning. More often, it is intentionally left off when cost-calculations are made. Whether it is new construction, or remodeling of an existing facility, planners optimize the utilization of space for maximum cost-savings and efficiency. Paper storage ranks very low in the value equation.
Space isn’t the only cost
The problems with paper go well beyond the cost of storage. In fact, the room needed to store paper may be one of the least costly factors impacting the bottom line.
Manually filing and retrieving paper documents takes time that could otherwise be spent doing more productive work. The amount of time spent putting paper in its proper place and finding it again later varies widely on the circumstances. However, assuming it takes an average of 5 minutes for each instance of filing, and filing occurs just 10 times a day, that adds up to over 217 work hours per year. At U.S. average wages, that is $5,748 in filing time!
If you are filing more than 10 times per day, or have multiple people filing, the labor cost alone can become staggering.
Lost and misfiled documents
People make mistakes when filing paper. Files are misplaced, left on desks, and misfiled in filing cabinets. Finding lost files takes time; even more time is needed if files have to be re-created. If files are the subject of audits or retention policies, the cost of lost or misplaced files can be enormous.
Filing cabinets can’t tell you where a document can be found – there’s no search button! They can’t route files and keep track of them while under review, and they can’t track retention dates and tell you when action is needed. This is because filing cabinets have no intelligence built-in to help automate the routine paper-work procedures of Human Resources. As a result, you are left processing the flow of paper manually, searching for documents by hand, and tracking retention dates on spreadsheets.
Although many filing cabinets do have a flimsy lock to hold back prying eyes, they do not have the ability to tell you who has been inside (or what they did). And, while filing cabinets might protect against small incidents, like spilled coffee or the occasional office water-balloon party, thin metal cabinets are no match against larger disasters like overhead sprinklers going off, office fires, earthquakes, hurricanes, tornados, or other disasters.
Don’t forget the cost of paper itself!
Finally, don’t forget the cost of paper itself. Ten filing cabinets will hold about $1,500 worth of paper. (Not to mention the 18 trees it took to produce the paper!)
2-steps to free up filing cabinet space
It goes without saying that hard drives are cheaper than warehouses for storing records. However, a hard drive alone will not satisfy all your requirements for storing HR files. What’s needed is an HR document management system that organizes files, secures them, makes everything searchable, routes files for review, adds retention policies, and monitors information over the long-term.
- Take a day-forward paperless approach
Unless the floors are about to collapse or the office move is underway, it makes sense to start by cutting off the flow of paper first to stop adding to the problem. Implement a system to begin managing your HR files electronically. A system that synchronizes with the HCM or payroll system will maintain consistency, harmonizing useful datapoints like names, employee numbers, status, departments, and more so that files are always reflecting the most current situation.
- Digitize the paper back-files
With an organized system in place, you can begin the back-file scanning of HR records and eliminate the paper storage problems. Scanning can be accomplished in-house during spare time or using extra resources. Or, you might consider one-time outsourcing of the scanning to professionals.
Make the paper disappear!
While there is no magic wand that will make the paper disappear, there are solutions designed to tackle the unique needs of going paperless in Human Resources. HR document management systems take on the mission with a little investment that returns big savings in space and money. In fact, when you add up the cost of just 5 HR filing cabinets, the savings may be realized in less than a year!
Cost of 5 HR Filing Cabinets
Square Footage $2,135, annually
Inefficient Filing $5,748, annually
Cost of lost/insecure files varies, but can be costly!
Free 30-minute Webinar
Join us for a 30-minute webinar where we’ll take on the unique challenges of going paperless in HR – and getting rid of the HR filing cabinets! https://www.documentlocator.com/resources/document-management-webinars/hr-08-21-19.htm
Here are some resources to learn more about HR document management:
- HR Document Management Video: https://www.documentlocator.com/resources/videos/hr.htm
- HR File Management: https://www.documentlocator.com/solutions/hr-document-management/hr-employee-file-management-software.htm
- Guide to Paperless HR: https://www.documentlocator.com/downloads/docs/HR/GuideToPaperlessHR_DocumentLocator.pdf