Streamlining Operations and Reducing Costs: Unlocking the Economic Benefits of a Document Management System (DMS) for Enhanced Business Efficiency
Managing documents efficiently has become a necessity for businesses, especially within the HR department. A Document Management System (DMS) also known as an Enterprise DMS or Corporate DMS maintains an electronic repository of documents that would otherwise take up space in physical form. Traditionally, HR departments accumulate dozens of physical documents per employee during their service period, often storing them in cabinets, storage boxes or even third-party warehouses. However, retrieving these physical documents can be a time-consuming and costly process.
This is where an HR document management system comes into play. By maintaining an electronic version of documents, an HR electronic filing system can retrieve records in seconds, allow multiple people to access them from different locations and reduce costs. In this blog, we highlight the economic benefits of using the best HR document management software for your company.
The cost of creating HR documents includes creating forms such as employee information forms, health forms, leave applications, purchase orders (POs) and more. On average, the HR department generates around 30 pages of documents per employee. With regulatory requirements, companies often need to maintain duplicate copies leading to the creation of about 100 pages per employee. Assuming the cost of printing is ₹1 per page, this equates to at least ₹100 per employee and for companies that hire 1,000 employees per year, this adds up to ₹100,000 annually in document creation costs alone.
Physical document storage requires substantial space. A single filing cabinet, which holds around 120 folders (roughly 40 employees' folders), occupies six square feet of space. In cities like Mumbai, where the average cost per square foot is ₹50 per month, storing just 40 employees’ folders can cost ₹300 monthly. For a company with 1,000 employees, that’s ₹7,500 per month just to store active employees' folders. Archival locations for past employees can cost even more with companies spending around ₹700,000 annually to maintain physical archives. Switching to an HR electronic document management system would eliminate this cost.
Retrieving documents from physical archives is another significant expense. In a company with 1,000 employees, the HR team spends around 500 workdays per year simply searching for documents. This results in a retrieval cost of around ₹500,000 annually. By adopting an HR electronic filing system, this time-consuming process can be streamlined saving both time and money
An HR document management software offers a more cost-effective solution to traditional paper-based document storage. The initial investment for an HR electronic document management system typically involves the cost of software licenses, around ₹700,000 for 10 users and an annual maintenance cost of ₹150,000. Additionally, the cost of scanning existing documents into the DMS is estimated at ₹1,000,000. While this may seem like a large upfront expense, the system pays for itself within two years especially when considering the savings in storage and retrieval costs.
Furthermore, an HR employee file management software like dMACQ DMS offers built-in privacy, encryption and access control features, reducing the need for additional security measures. This is a significant advantage over physical storage which often involves costly risk mitigation efforts to protect sensitive documents.
It’s not just the HR department that benefits from an HR document management system. Other departments like Legal, Accounting and Engineering & Design also generate significant amounts of paperwork. By centralizing document storage with a human resource file management system, multiple departments can share the cost of the DMS speeding up the return on investment. An HR records management software allows departments to access and manage records efficiently improving collaboration across teams.
Switching to an HR electronic document management system has clear financial benefits for companies. Not only does it reduce the costs associated with creating, storing and retrieving documents but it also ensures compliance with security protocols. By investing in a robust solution like dMACQ DMS, companies can future-proof their document management processes while realizing significant cost savings.
At dMACQ, we offer enterprise-grade employee document management software that includes features such as document storage, real-time search, retrieval, security and audit trails. Whether you’re looking to streamline your HR file management system or improve document access across departments, dMACQ DMS can provide the solution you need.
Visit us at dMACQ to learn more about our HR document management systems and how we can help your business cut costs while improving efficiency.