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Electronic signatures in the field of Human Resources

Designing new models of Human Resources Management

Introduction

Since 2011 we are immersed in the so-called "Fourth Industrial Revolution". The workforce is increasingly digital, diverse, global, expert in automation and efficient with social media. In this new era, technology is the transforming element in production processes and in the way of relating and working. Organizations and those responsible for the areas of Human Resources (HR) have the mission of renewing the rules of organization, recruitment, development and management in order to attract and retain workers. According to the Digital Workplace in Europe study, an average of 38% of large European corporations have already digitised a large part of their HR processes.

 

The digital transformation in the field of labour relations makes it possible to improve the employee's experience and to gain the loyalty of the new generations of employees who are more familiar with new technologies. The digitisation of HR departments is having a significant impact in three areas. Firstly, in the constitution of a digital workforce by promoting new management practices that facilitate a new organisation. Secondly, in the creation of a fully digital workplace that enables productivity and uses modern communication tools. Thirdly, in offering digital human resources operating in a digital way and using digital tools and applications.

 

Among the technological bases of this digital transformation are electronic signatures that allow the management of the entire labour relationship, i.e. new employees can be registered, shifts can be changed, contracts can be modified, etc. In this way, paper-based processes that until now required the physical presence of the signatory are digitally streamlined.

 

This White Paper is addressed to both organisations and HR department managers who have to design the transformations and choose the right tools to achieve the digitisation of their companies and their relations with employees. This document analyses the benefits and cases of use of electronic signatures in this area.

Digitisation of Human Resources departments

The digital transformations have led to profound changes in companies that are manifested both in business strategies and in work models, work processes, products and services, business culture, decision-making, technological infrastructures and human resource management. HR departments are playing a critical role in assisting the digital transformation of companies. This fact shows that the change of management model is beginning to penetrate the whole organisation, and involves the transformation of the work culture, the profiles of the workers and the management in the whole "life cycle" of the activity of the HR department.

 

Digitisation extends to the following functional areas of HR: 

 

 

Digital human resources are based on innovation and experimentation. A new generation of human resources products and solutions based on mobile applications, artificial intelligence, etc. is on the market. These tools allow HR to be managed practically in real time. 

 

Successful digitalisation of HR is necessary:

  1. Design of a digital strategy for human resources based on our own business strategy and experience.
  2. Integrate digitisation into HR strategy by identifying key digitisation tools around strategic areas. The processes whose digitalisation will bring a large number of benefits should be analysed, as it is not advisable to carry out a digital transformation of all processes without discretion.
  3. Execute the HR strategy and measure the impact of digitisation and the experience of workers and candidates.
  4. Encourage collaborative work and develop leadership, while strengthening a culture of adaptation to change.

Challenges of the digitisation of HR 

Digitisation is an opportunity for updating and extending the processes of companies that require agility and recovery capacity for their implementation. Therefore, in this process of designing digitalisation strategies, HR departments are faced with a double challenge. On the one hand, that of reforming the activities of the department itself. The problem associated with this challenge is the lack of leadership in the digital transformation processes. Until now, these were led by general managers and the marketing and sales departments, where the impacts of the digital change were more evident. The HR department is now taking a very active role. However, in this process, it has to deal with the resistance to change that exists in organisations.

 

On the other hand, the challenge of transforming the workforce must be met. We are committed to training workers in digital skills and new professional profiles. Both candidates and employees are digital which requires employer branding strategies to change. It is necessary to raise awareness, guide and train in digital skills and design a strategic plan that responds to the challenges and needs of the company and the profile of the employees.

Choosing technology for digitisation: electronic signatures

The digital transformation in this field is focusing on several axes, among which the implementation of new digital tools for communication and collaboration and the digitalisation of companies' internal  processes stand out. Among the digital tools used by the HR departments, the following stand out: ERP/HCM software, apps, social networks and e-learning platforms. 

 

In this process, it is recommended that HR departments look for easily integrated solutions. The digital transformation has to be based on reliable, scalable and flexible integration. Creating and integrating new processes is a crucial element for companies and having a powerful platform or integration tool becomes an essential element for successful digitalisation. This requires a combination of the new information available to the company with the data already stored in the tools available to it. In this way, business processes can be changed or new ways of interacting with customers can be found.

 

Of particular importance among these tools are electronic signatures that help make HR department processes more efficient. In fact, recruitment processes already begin through digital channels. As a consequence of our increasingly dynamic and digital society, these processes should also be able to be formalised and developed through digital means. Therefore, their conclusion by means of electronic signatures is the natural thing to do. 

 

Electronic signatures are regulated at European level by Regulation No. 910/2014 of the European Parliament and of the Council of 23 July 2014 on electronic identification and trust services in electronic transactions in the internal market (known as the eIDAS Regulation). It regulates several types of signature according to the level of security they offer, as follows: electronic signatures (sometimes identified as simple electronic signatures), advanced electronic signatures and qualified electronic signatures.

 

 

In the field of HR, the use of qualified firms is recommended since in most cases the contracts and documents signed will have legal consequences for all parties involved. It is precisely qualified electronic signatures that make it possible to accept a contract with the same legal validity as if it were made in person, since under Article 25.2 of the eIDAS a qualified electronic signature has the same legal effect as a handwritten signature.

 

In addition, the third paragraph of this Article provides that qualified electronic signatures based on a qualified certificate issued in one Member State are recognised as qualified electronic signatures in all other Member States. In other words, this is an interoperable instrument.

 

In short, leaders capable of adopting new technologies, ways of working and constantly reinventing themselves will have a strong impact on the company's results and on the experience of its employees.

Benefits of electronic signatures in the field of Human Resources 

Digital human resources have many advantages such as reduced business costs, increased collaboration and communication between all departments, increased competitiveness, reduced bureaucracy, effective time management, increased productivity and job satisfaction. In particular, the use of electronic signatures brings a large number of benefits. We highlight the following:

  1. Acceleration of employee recruitment and hiring processes. With the use of electronic signatures the signing of employment contracts is simplified for both the HR department and the candidate. There is no longer any need to travel or to print, scan and send the documents again. The employment contract can thus be signed anywhere and on any medium, be it a computer, tablet or mobile phone. In addition, it makes it easier to attract talent, for example, it facilitates international hiring, it allows other figures to be incorporated as external collaborators.

                                                     
  2. Monitoring the status of documentation in real time. With these digital solutions you can monitor the status (sent, waiting for a signature or completed) and changes made to documents.
  3. Possibility of teleworking. The electronic signature is a simple and integrated tool that allows teleworking. This form of work has slowly increased over the last 10 years, conceived as something occasional. Employees who made use of teleworking increased from 5.2% in 2009 to 9% in 2019. However, after COVID-19 this reality has changed radically. Early estimates suggest that about 40% of workers in the EU started to telework full-time as a result of the pandemic.
  4. Saving money by reducing unnecessary costs. Documents can be signed immediately, avoiding annoying delays. The use of electronic signatures allows many tasks to be automated. Processes such as the delivery of pay slips, account authorisations, work communications, changes to workplace conditions, recording of daily working hours, holiday leave, etc. are all speeded up. The result is significant cost savings for the HR department and the company.
  5. It makes a good first impression on young people. The new generations relate digitally in all areas of their lives. The possibility of signing electronically at the time of recruitment shows that the company is on a good technological level.
  6. Commitment to sustainability and the environment. It is estimated that 115 billion sheets of paper are used annually in offices and workplaces. Eliminating paper from HR departments results in real paper savings. With the implementation of electronic signatures, the entities' corporate social responsibility policies are simultaneously complied with.
  7. Greater guarantees in the protection of Personal Data. The dematerialisation of paper- based processes allows for the traceability of personal data. In this way, access to this data is managed more efficiently and compliance with the General Data Protection Regulations (GDPR) is facilitated.
  8. Improved user experience. The possibility of signing and managing a document from anywhere with just a computer, telephone or tablet and an Internet connection makes it easier for workers to do their job. Similarly, it provides them with greater autonomy and well- being.
  9. Safe solution. The use of electronic signatures does not put the integrity of the documents at risk as it can be when they are sent by e-mail or other means.
  10. Possibility of integration with other work management platforms. Electronic signatures are a tool that allows a multitude of procedures to be carried out. Furthermore, it is easy to integrate into other work management platforms. It adapts to the needs of all organizations, HR departments and their workforce.

 

 

In short, electronic signatures have a number of advantages for HR. Its main virtue is to guarantee the identity of the person who manages and the integrity of the content of messages and documents.

Use Cases

Electronic signatures can have a number of uses within the HR department. The use of an electronic signature is recommended for all those documents that provide for contractual obligations with the employee. This solution allows the management of the working relationship with all employees and the communications with them. The most frequent cases of use of electronic signatures in the field of HR are as follows::

 

Recommendations 

Companies increasingly require unique HR department roles that emphasise transformation objectives that allow HR staff time to address more strategic issues. Through this transformation, the means to change the business model can be provided. In his process, electronic signatures are configured as a tool that allows the digitalisation of HR departments.

 

The use of electronic signatures is becoming more common in human resources as employers find themselves in situations where paper-based signatures are impractical and time consuming to manage. Technology is seen as playing a key role in making it more efficient and applicable to the entire organization and to multiple sectors.

 

To implement the use of electronic signatures in the HR department, it is necessary to bear in mind the following recommendations:

  • To design a digitalization strategy according to the needs and characteristics of the company. To define those sectors that require the use of digital signatures.
  • HR managers have to involve all members of the company in this process. Carrying out a real transformation of the business culture.
  • Electronic signatures are tools that can be easily integrated into work management platforms.
  • Qualified electronic signatures are equivalent to handwritten signatures, with a few exceptions they can be used to carry out a large number of work procedures.
  • These signatures are therefore interoperable and recognised as qualified electronic signatures in all other Member States.

 

The following is a brief overview of labour legislation and the acceptability of electronic signatures in this area in Germany, France, Italy, and Spain.

Fact sheet: Germany

According to the Digital Workplace in Europe study, 48% of German companies are in the process of digitising their HR processes. In order to implement electronic signature solutions in the field of HR, it is necessary to determine the procedures that can be carried out with this instrument. German labour law generally provides for freedom of choice in the form of employment contracts. However, there are a large number of declarations and agreements that legally require written form, such as: the temporary employment contract (Arbeitnehmerüberlassung, in German, regulated in section 12 (1) of the Temporary Employment Act - AÜG), temporary contracts (section 14 (4) of the Part-Time Employment Act - TzBfG), etc. 

 

Written form may be replaced by electronic means under Section 126a of the German Civil Code - BGB, unless otherwise provided for by law as follows from Section 126 (3) of the Civil Code. Electronic signatures may be used in accordance with the eIDAS regulations. If the electronic signature replaces the form prescribed by law, the electronic document must be provided with a qualified electronic signature in accordance with the eIDAS Regulation and the German Trusted Services Act (Vertrauensdienstegesetz - VDG and Section 126a (1) BGB). In addition, a combination of electronic and handwritten format is possible, i.e. one party uses the electronic format and the other party signs the contract in writing.

 

In some cases the substitution of a written signature by an electronic one is completely excluded, such as in the case of contract terminations (section 623 BGB), reference letters (section 630 BGB), etc. In these cases handwritten signatures are mandatory and cannot even be replaced by qualified electronic signatures. 

 

WHAT ABOUT TEMPORARY CONTRACTS?


Temporary contracts require compliance with written form in accordance with Section 126 of the German Civil Code - BGB. The question is whether it can be replaced by qualified electronic signatures. There is currently a doctrinal debate on this issue and the Federal Labour Court has not yet ruled on it. The prevailing view is that electronic form is applicable, although there is still legal uncertainty for business practice until the Federal Labour Court rules.

 

A series of recommendations are then made on the typology of signature for certain documents in the field of human resources:

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Fact sheet: France

Since the entry into force of the Labour Law on 1 January 2017 (n° 2016-1088 du 8 août 2016) and with the practical modifications by the labour ordinances of 2019, the digitisation of work in France has been facilitated. Among other measures, employers can decide to use dematerialized payrolls for their employees, teleworking is facilitated and employment contracts are also directly affected by dematerialization through electronic signatures.

 

On the one hand, the principle of freedom of form of the employment contract applies in France. This follows from Article 1221-1 of the Labour Code, which stipulates that the employment contract is subject to the rules of ordinary law and can be drawn up in any form that the contracting parties decide to adopt. On the other hand, the electronic signature is enshrined in article 1367 of the Civil Code. It is thus possible to sign employment contracts using electronic devices. 

 

The following is a series of recommendations on the typology of document signatures in the field of human resources: 

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Fact sheet: Italy

The digital maturity of Italian companies is quite low and the contribution of HR departments is still limited. 43% of HR departments are in the phase of exploring digital technologies and methodologies.  Employment contracts in Italy can be concluded either orally or in writing, although particular attention should be paid to national collective agreements (contratti collettivi nazionali di lavoro, CCNL) which play an important role in terms of the formal requirements of each contractual modality. 

 

The Italian legislation on electronic signatures is contained in the Digital Administration Code (CAD). It establishes the legal validity of electronic signatures, which can be used as a tool to regulate relations both with the public administration and between individuals.  

 

It then makes a series of recommendations on the type of signature for documents in the field of human resources:

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Fact sheet: Spain

80% of companies in Spain are tackling the challenge of digital transformation in HR. In the labour field, the principle of freedom of form governs, by virtue of Article 8 of the Workers' Statute. Similarly, Article 23 of the Law on Information Society Services recognises electronic means as a perfectly valid means of entering into any type of contract. In the same vein, the Ministry of Labour issued an external circular, establishing that employment contracts may be concluded by means of electronic or digital signature. Therefore, the conclusion of digital employment contracts is fully valid. 

 

A series of recommendations on the signing of documents in the field of human resources are made below:

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