Digital Employee File

Employee Data Right
at Your Fingertips

Ensure that personnel data is stored correctly, completely, and in compliance with legal requirements at all times, and that you no longer lose time searching for employee information.
Digital Employee Files
Digital Employee Files on Different Devices

A Central
Data Repository

All personnel data and documents are stored in digital employee files and only need to be updated there. As a result, you get a well-maintained database that keeps saving you time with downstream HR tasks such as payroll.

Better Data Management
for Less Effort

Digital employee files make it easier for everybody to maintain
data and documents centrally. Employees are able to update their
data independently, with HR only needing to confirm changes.
Easy Approval Request within Digital Employee Files
Digital Employee File Access Rights

Compliant Data

All data is stored securely in one place – the digital employee file. You define access rights to determine who is permitted to view and edit which personnel data.

Digital Employee Files
with Personio

From managing applicants or vacations to payroll accounting, Personio supports you in all your HR processes. Try it today with a free trial account, or book your very own 30-minute Demo to learn more about optimizing your processes through more efficient software.

Why You Should Introduce
Digital Employee Files

More and more companies are recognizing the benefits of digitization, including the value of making and storing digital employee files. After all, the electronic version of personnel files not only increases HR efficiency, it also significantly improves the quality of both employee files and employee master data sheets. And when access rights are carefully managed, HR data will remain secure and confidential.

Introducing electronic (i.e. digital) employee files is a great digital transformation step. It reduces the drain on HR cost structures and generally yields a return on investment (ROI) in only 18 months!

To be clear, at the beginning, costs do increase when the conversion process from paper-based to digital employee files is started. Then they drop rapidly after the first six to nine months. Initial costs typically include: The investment in the software itself, the necessary training, implementation costs including expenses for process conversion, and a temporarily increased workload as paper files are digitized. After that, however, it’s smooth sailing all the way.

Why move to use electronic employee files? Most often, it’s to save HR costs. Here are some numbers that are commonly used as proof of ROI. Note: the costs listed below relate to ongoing operations within larger companies with an average of 4,000 employees:

  • Costs for non-digitized employee file management: 90 cents per file, including archives and audit-compliant operations
  • Costs for digitized employee file management: 20 cents per file for ongoing digitalization

It clearly makes financial sense, but cost-reduction is not the only reason to go digital: it also saves time and reduces HR workloads. Not only can employee files be managed and updated very efficiently – employees can even update records themselves! This, in turn, allows you to give your qualified employees more time to do other important, but often neglected, areas of HR work.

In addition, once your employee files are stored in an electronic format, the information you need can be found more quickly and processed in a matter of minutes. That’s quite different to dealing with paper files which typically take at least 20 minutes per process (or often much longer).

And don’t forget that once digitization is in place, there is no longer a need to for expensive archiving space. It is also easy to manage document retention periods (software like Personio actually reminds you when it is time to delete content).

If you want to know how much you could save in total – in both hard and soft costs – get in touch. Our digital employee files software solutions expert will be happy to create a detailed calculation specifically for your size of company.

Benefits At a Glance

  • Save time (and costs) when processing employee files.
  • Get rid of the old boxes of paper: Be more sustainable, get more space, and save money instead of paying for expensive archiving space.
  • Work more collaboratively: Benefit from cross-departmental process optimization.
  • Use the data to get better and better: Interrogate it at the click of a button and use it to create new, or improve existing, HR initiatives.
  • Improve data security: thanks to smart rights management systems.
  • Manage, retail or delete documents easily: in line with your relevant regional retention obligations.
  • Trust that you have the right version: Easily see the relevant, updated documents.
  • Allow employees to self-serve: You get more accurate data and save time at the same time.
  • Trust that your data is secure: thanks to Personio’s high levels of GDPR compliance and advanced rights-based systems.
  • Retain (or delete) documents easily: in line with relevant retention obligations.

Make time-consuming searches for employee files and the information contained in them, as well as filing processes, a thing of the past!

What are Digital Employee Files?

Employee files store employment-relevant data relating to a specific employee. While there is no legal definition of this data, HR managers typically decide what content is relevant to an employee’s service, contract, career, life, and health at work – together, these are referred to as digital employee files.

Can Employee Files be Kept Electronically?

Years ago, there was a fear that documents had to be retained in hard copy format. However, today, most governments around the world are actively encouraging their citizens and corporations to retain documents in a digital format. For example, in the UK, HMRC is perfectly happy to accept digital copies of receipts when claiming expenses – as long as they are clearly readable, of high enough quality, and, most importantly, accessible as and when required.

The same applies to employee files. Yes, you should go paperless! Not only is it good for the environment, but it is also good for peace of mind – as documents are easier to store, find, and review whenever and wherever necessary.

What Documents Should be in an Employee File?

Typically, an employee file will include everything from a CV and relevant recruitment-related information such as an employment contract, to documents related to salaries, tax, annual leave, benefits, performance, and even KPIs. Employee identification, education, further career training, and bank account information typically also form part of an employee file. However, every employee file can (and probably will) contain different types of information and there are some documents that should not be stored in an employee file.

  • CVs
  • Government/tax-related information such as P60s and even P45s
  • Performance and development documentation
  • Employee responses to surveys
  • Recruiting information
  • Benefits information – pension details, next of kin forms, stock options, etc.
  • Medical and sick leave data – but not disability information
  • Resignation or retirement-related documentation
  • Job applications
  • Direct debit and bank account information
  • Work anniversaries – start date, end of probation date, years of service
  • KPIs or performance-related information
  • Payroll information – salary slips
  • Annual leave and long-term leave accrual
  • Official government documentation – passports, ID documents, and National Insurance numbers
  • Rewards and achievement recognition records

What documents should not be kept in an employee file?

As a rule of thumb: Do not keep medical records, citizenship-related information, or ‘unnecessary material’ in an employee file. Most countries have their own rules and guidelines about what documents must not be kept in an employee file. Cultural norms and data protection regulations will also determine what information can and should be stored, and for how long.

What? No Medical Records or Citizenship Information?

Actually, it is important to retain employee information relating to an employee’s health and citizenship – however, it should be kept away from general employee files and stored separately: not only to ensure its security, but so that all employee information is accessible to government officials at a glance, if necessary.

Keep Only as Much Information as You Need

One of the principles in the Data Protection Act is that the information retained should “be adequate and only for what is needed”. Personal observations about employees, their beliefs, gender, or sexual affiliations or activities outside of work hours should not be stored at all.

How Long Should Employee Files (and the Information in Them) Be Kept for?

There is no prescribed general retention period for records in an employee file. Different retention periods apply to different types of documents. For example – some countries require that job applicants who were not offered a job must have their CVs deleted after a certain number of weeks.

Logically, there is no need to store all the documents relating to employees who were employed but have since left the company – but some documents (like the job description, CV, and perhaps performance-related information) should be retained so that thorough reference letters can be written in future, if necessary.

How should you organize employee files?

You can organize employee personnel files chronologically, by document type, by department, division, country, or using any meaningful structure that is relevant to your company. But no matter how you organize files, be sure to give them appropriate names and let the HR department organize their files in a way that makes sense across the whole organization.

Document management software like Personio, for example, allows you to create file structures that make sense to your organization and store information in sections. Sections like a public profile, for example, will include their name and email address. Sections like personal data might include their country of birth and LinkedIn profile and payroll data will include salary records, tax categories, and so-on.

If you would like to know more about how employee file management software like Personio stores employee data files with sections and attributes visit this page.

How Do You Keep an Employee Personnel File Up to Date?

The data retained on file about employees is not only HR’s responsibility: It is also the employee’s responsibility. Some employee management software solutions like Personio help HR teams make it easy for employees to update their details (like their phone number, for example) themselves! Even leave and travel requests can be processed and approved effortlessly. This makes it easier for HR to manage – all you need to do is define who is authorized to update which data.

Who is Allowed to View and Update Employee Records? Document Rights Management

Document rights management relates to who can access or edit digital employee files. When it is managed appropriately it saves HR a lot of time and hassle. For example, if an employee or supervisor wants to see someone’s file, it used to take a long time to find the relevant data and arrange a time for the relevant people to view the relevant documents. Not with Personio, though! Employees and supervisors can view personnel files autonomously. They can even see documents from their PC or smartphone. And since Personio’s document rights management complies with data protection requirements, it is really easy to give the right level of access to the right people – and only those people.

Systems like payroll programs also have access to employee data so they can edit information relating to payroll accounts, time records, and electronic employee files, for example. But, because the data is automatically transferred, regularly updated, and stored securely, it makes it much easier to review factors like overtime, absences due to illness, travel, or paid leave – all in one place, all with a few clicks. Digital employee files have also been shown to protect the information they contain in a more secure way than paper-based files, mostly thanks to appropriate document rights management.

Digital Employee Files and Data Protection: Your Data is Safe in Our Hands

Every company is required to protect the personnel files they store from unauthorized third-party access. Fortunately, Personio relies on data protection “made in Germany,” and complies with the European General Data Protection Regulation. We protect our customers’ data on ISO-certified secure servers in Frankfurt/Main. Additional back-ups are stored in separate fire protection areas. Two-factor authentication and a sophisticated role and rights management system ensure that your data is protected against unauthorized access. Personio HR software also features further security functionalities and always connects to you via SSL encryption.

With Electronic Employee Files, Analysing Data is Easy!

Typically, organizations storing employee files in one place use HR software to help them gather all the data about employees in one place (or link it together). This makes it much easier to see the bigger picture and take relevant action to help both employees and the business. For example, you might want to consider staff training or focus on developing initiatives to reduce frequent illness-related absences.

Since all the data you could need is stored together, it is much easier to analyze it regularly – and spontaneously – something that is typically a huge mission if your organization is still storing and referring to paper employee files!


Imagine a world where all your relevant employee information is available with just a few clicks to the right people at all times! This is the world of Personio. With us, nerve-racking searches for data in old folders or poorly organized Excel spreadsheets are a thing of the past. Digital employee files aren’t just cheaper to manage in the long run, they also offer a raft of both hard and soft benefits.