Personnel accounting and HR records management

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HR record keeping is one of a company’s most labor-intensive items of internal accounting. It requires special responsibility, carefulness, discipline and attention. Only some managers, even those with a specialized accountancy degree, can manage all areas of HR records promptly and accurately. That is why medium-sized and large enterprises have entire HR departments that deal with this work five days a week from nine in the morning to six in the evening. In small businesses, HR is usually delegated to one of the accountants or assistants to the top manager (CEO or executive director). Often, in the face of rapid growth and an increase in employees, several people are responsible for HR records and personnel accounting over time. Even with modern CRM systems, this is still one of a company’s most challenging areas of record-keeping.

HR records management: areas and requirements

Every adult citizen is familiar with HR records management if they have had at least one job with official employment. They must have had to sign an employment or cooperation contract and consider certain rules and regulations regarding the work of a particular specialist, department or the entire organization. Such documents and schedules are the product of the work of the HR department and, therefore, are directly related to HR records management. However, this is only a small part of the tip of the iceberg. HR records management at an enterprise is generally carried out in many different areas. The main ones include:

  1. Current accounting of the company’s employees by specialty and position – starting from the date of hiring and taking into account promotion;
  2. Reporting on changes in positions and salary levels for each member of the company’s staff;
  3. Maintaining nomenclature files, their storage and archiving;
  4. Accounting for regular training of personnel and carrying out measures for their training, retraining, and testing, which relate to the possibility of admission to perform certain work or change of position;
  5. Accounting for the personnel reserve;
  6. Preparation of orders on hiring, transfer to another position, dismissal;
  7. Developing job descriptions for each position and communicating them to the relevant representatives of the company’s personnel;
  8. Developing corporate documents on the rules and requirements of work in the company, communicating orders to all staff members that are mandatory for general familiarisation and implementation;
  9. Work on setting up a convenient, efficient and effective document flow within each division of the company and throughout the company as a whole;
  10. Development of job descriptions, procedures, and rules for the work of individual departments and specialists;
  11. Entering all the necessary data into automated databases (CRM, 1C, etc.) to provide quick access to information about the company’s personnel when preparing reports and searching for personal information about each employee of the company’s personnel.

In today’s business environment, the amount of data on each employee, their career development, salary changes, bonuses and penalties, use of leave, overtime, etc., is so large that it becomes increasingly difficult to maintain HR records from scratch and every day. Computerized programs help with this. However, the human factor still plays the most significant role in a company’s HR policy. It is a difficult and meticulous job with high requirements, as information on personnel is submitted to state and local institutions monthly, quarterly and annually as part of regular reporting and calculation of contributions to social funds, pension funds, etc. The main tasks or requirements for HR records in 2017 include the following:

  • implementation of an accessible and transparent system of personnel records in the company;
  • development of effective methods of HR record keeping;
  • the organization of the work of the company’s departments and the distribution of duties and responsibilities between them (by the specifics of the company’s activities and the current labor legislation of Ukraine);
  • work on optimizing the organizational structure of the business;
  • ensuring convenient document flow between individual employees and between the company’s functional units;
  • developing methods for analyzing the performance of each staff unit and analyzing the quality of work of all members of the staff;
  • development of recommendations for improving the performance of each employee and individual business units;
  • Implementation of corporate ethics and culture, their development and planning of measures aimed at such development;
  • Providing staff with the necessary conditions to perform specific functions, from workplace equipment and provision of the necessary equipment to referrals to attend training, seminars and workshops.

Again, this is only the main part of the tasks that an enterprise’s HR policy should address. In some cases, this list may be supplemented with specific requirements, depending on the industry in which the company operates, the methods of current HR record keeping, ongoing projects in the recruitment and development of personnel, etc.

Personnel records are one of the main areas of HR record-keeping at a company

Personnel records are a continuous process designed to collect and classify data about each employee, as well as to ensure their storage, quick access to the necessary information and the ability to obtain it promptly to report to state or local authorities and institutions. For this purpose, the company has a human resources department that creates and maintains the personal cards of each employee, maintains employment records, and creates and stores employment contracts, orders, logbooks, personnel orders, etc. Personnel accounting is a system of measures to systematize information at all enterprises without exception – regardless of size, revenue, form of ownership, organizational structure, etc. Its purpose is to describe the quantitative and qualitative structure of the company’s personnel in the smallest detail. It means that personnel accounting should provide answers to the following questions:

  1. How many employees does the company have with all its divisions and branches?
  2. Who are they by education? What level of education do the members of the management team have? Do specialists have diplomas in specialized education?
  3. How is the company’s staff divided into categories and specialties?
  4. How long has each employee worked for the company? Are there many specialists working for several years or decades who have achieved professional success and career growth within a particular company?
  5. How often do employees change? Is there an intensive staff turnover at the company? What are the reasons for replacing a specialist or reducing a particular position, and how often are new positions created and hired to fill them?
  6. What is the level of remuneration in the company? How is the remuneration for the performance of professional duties distributed (fixed part of the salary – salary, monthly bonuses, bonuses based on the results of the year or project closure, etc.)
  7. What is the quality of the company’s staff in terms of age, gender, nationality, etc.?
  8. Is there any professional development for employees? How often does it happen? What are the results of such activities?
  9. What is the state of the company’s talent pool? Are there any internships and training for its representatives, and how?
  10. How often and for what reasons are employees absent, and how does this affect the company’s overall performance?

The answers to these questions do not directly affect the company’s key performance indicators, such as revenue, profit, etc. However, it is a well-known fact that these values are entirely dependent on the efficiency of the company’s management and the quality of the operational work of the staff. That is why properly organized HR accounting guarantees the company’s HR policy’s success and its general development and economic growth. An HR audit helps to identify the current state of personnel or analyze their development for participation in a particular project and to decide whether it is advisable to reduce or increase the number of staff. HR records management allows you to properly distribute functions and workloads between departments and specific specialists, develop effective motivation and analyze the quality of performance by all company staff members.

Reporting to government agencies and institutions is integral to HR records management

Preparation and submission of reports to the relevant authorities on personnel status and structure. For example, monthly reporting involves the preparation of such reports as 1-PV and 5-PN (on staff dismissal). In addition to the 1-PV report, quarterly reporting is provided by submitting reports on planned and actual staff reductions and the availability of open vacancies. Annual reporting on the state and structure of personnel at the enterprise involves the preparation of reports on working conditions and a report on the employment of disabled persons, in addition to 1-PV and 4-PN (plan and actual). This makes it possible to cooperate with free labor resources on a national scale and to participate in the compilation of macro statistics on employment and the distribution of the population by profession and income level. HR record keeping and reporting is the backbone of a successful business and a prerequisite for improving the quality of the workforce.

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