CoAdvantage- Businesses today must manage mind-boggling amounts of information, data, and records. In 2020, the sum total of data in the world equaled about 40 zettabytes (or about 40 trillion gigabytes)! And the data we manage is growing fast; in 2010, there was only an estimated 1.2 zettabytes. The proliferation of business information creates challenges that are felt especially keenly by small and midsize companies that often lack the resources to store and manage growing volumes of records. One step that can help: implementing a records retention schedule.
Indeed, it’s important to codify which records need to be preserved and for how long. This ensures that employers preserve business-critical data in compliance with legal requirements, and it establishes when they can safely and permissibly destroy data and reduce the records management burden.
First, a records retention schedule tells you exactly how long to keep each kind of record.
If you don’t hold onto certain records, you may not be able to find the information you need to make business decisions, complete day-to-day work, or produce material for legal activity. Worse, you may fall afoul of regulatory requirements.
For example, financially speaking, businesses must keep any records related to income, expenses, and taxes. Similarly, in HR terms, you must keep records related to employee events (hiring, termination, reviews, and so on). Finally, you must also keep any records related to specific regulations that affect your company or industry.
Not all records need to be kept indefinitely, however, or for the same amount of time. Most IRS-related records should be kept for between three and seven years, while others should be kept for up to ten years. Your records retention schedule can identify which is which and stay on top of these records.
Second, you do want to destroy records when you can, and a records retention schedule will tell you when it’s sensible and permissible to do so.
If you don’t delete records when they’ve expired, they can become a liability if your organization is breached by hackers, or if the organization faces litigation and must produce the records during discovery. Further, if you never destroy or archive any records, the sheer volume of information your team must manage will simply keep growing and growing. Even digital data has real-world costs attached to it, from the cost of storing it to the labor required to organize, retrieve, and use it.
With a policy that identifies which records should be kept and for how long and then details what happens at the end of that retention period, small businesses can greatly ease their records management tasks. That’s what a records retention schedule does.
CoAdvantage, one of the nation’s largest Professional Employer Organizations (PEOs), helps small to mid-sized companies with HR administration, benefits, payroll, and compliance. To learn more about CoAdvantage’s ability to create a strategic HR function in your business that drives business growth potential, contact us today.