Our company often receives requests from managers and business owners about how to properly organize effective personnel accounting in compliance with all the requirements of current legislation.
It is worth noting that personnel accounting is a rather extensive process, but we will try to reveal its key aspects. In particular:
- Let’s determine the first steps of organization and management of personnel records.
- We compare the features of the organization of personnel work by an internal or external (personnel outsourcing) personnel service.
- Let’s share a successful case.
Any employer is required to keep personnel records. These are the requirements of labor legislation to ensure social guarantees for employees. Let’s find out what this process is. Personnel accounting is a set of activities related to the collection, processing, storage and use of personnel information.
With which processes should you start the organization of personnel accounting:
- Determining the purpose of personnel accounting for your company.
- Forming tasks for your personnel department.
- Making a decision on ways to ensure the fulfillment of the tasks of the personnel service.
- Artist search.
After the implementation of the above-mentioned steps, it is necessary to give the executors access to the necessary resources and tools, to establish a mechanism for monitoring the implementation of assigned tasks to identify weak points and, if necessary, to improve the process of organizing personnel accounting.
As our experience shows, the main functions of the personnel service are:
- Registration and organization of personnel movement, maintenance of personnel documentation;
- Control and compliance with labor legislation;
- Accounting for working hours and labor costs;
- Preparation of reports
As you can see, the role of personnel service at the enterprise is quite important, because it contributes to ensuring compliance with legislation and business standards.
We compare the features of the organization of personnel work by an internal or external (personnel outsourcing) personnel service.
For a better understanding, to whom to entrust the management of personnel records in business, let’s compare the specifics of working with an internal personnel service and outsourcing. In a general sense, personnel outsourcing is the delegation of the personnel accounting process to external contractors, specialized specialists, freelancers, or companies. We suggest considering the main advantages and disadvantages of each of the approaches.
Personnel service
Advantages:
- Full-time employees are more integrated into internal processes, because they communicate personally with each employee.
- Faster response to requests and changes in the business, because the performers are directly in the office.
- Internal information about personnel does not go beyond the company.
- Employees of the personnel service communicate with each other, so they can provide personalized training programs for their colleagues, transfer experience.
Disadvantages:
- Organizational issues distract from the main business processes.
- Regular expenses for wages, social. package, admin expenses, etc.
- It is difficult to find a qualified employee, the costs of recruiting.
- It is necessary to regularly train and improve the qualifications of the staff.
- It is necessary to arrange workplaces.
- It is necessary to organize access to sources of information and knowledge bases.
- The business may be dependent on key specialists, so certain risks may arise at the stage of their dismissal and search for a replacement
Outsourcing
Advantages:
- Experienced specialists and experts with a wide range of knowledge are engaged in HR administration.
- Payment is made for the stipulated and actually performed volume of work.
- The probability of financial risks is minimal, and the relationship is supported by a contract.
- Personnel outsourcing specialists are responsible for their work and are interested in long-term cooperation.
- Outsourcing is adapted to the special needs of the customer.
- Since outsourcing takes over a number of HR operations, it allows management to focus on strategic business processes.
Disadvantages:
- Monitoring of execution processes and task quality may be less.
- There is a risk of data leakage when they are transferred to external users.
- Due to the physical distance from the customer, there may sometimes be delays in responses.
- The process of changing the executor responsible for personnel accounting can be very time-consuming and long.
So, the advantages of personnel outsourcing for small and medium-sized businesses and NGOs are obvious.
As promised, we share with you one case from our practice.
The owner of an online store approached us with the question of how to properly organize personnel records? The client’s staff consisted of ten people: a manager, a financial manager and eight sales managers; all employees worked remotely and were physically located in different cities of Ukraine.
The problem voiced by the owner is a certain turnover of managers, as a result of which it was not always possible to organize dismissal documents due to the remote nature of the work. The client was concerned about how he should organize personnel administration, in particular the processes of signing orders, employment contracts, applications, etc., given that there is always a risk that a person may unexpectedly resign and leave him with problems related to incomplete employment documentation.
After studying his business, we came to the conclusion that civil law contracts for a period of one month should be concluded with the employees. It was also recommended to record in writing that the executor retains the responsibility to report any circumstances that may affect his ability to enter into further contracts and fulfill his obligations 10 days before the following month.
The proposed approach helped to ensure transparency of cooperation between the parties and reduced the risk of non-execution of personnel documents to zero.
Victoria Novodvorska
Accountant
UHY Prostir Accounting Services
