What is an employee ID?Employee ID's and why your business should use them

An Employee ID, sometimes referred to as an Employee Number or Employee Code, is a unique number that has been assigned to each individual staff member within a company.

Although it is not a mandatory requirement, an ID system can be extremely beneficial. From keeping records tidy to protecting staff from identity fraud, there are many advantages to implementing such a system in the early days of your business.

Shield from cyberattacks and identity theft

Cybercrime continues to soar at record rates, ranking as the second most reported crime across the globe in 2020. Research by Verizon Mobile Security Index 2021 discovered businesses across Australia, the US and the UK were growing increasingly vulnerable to cyberattacks during the Coronavirus pandemic—and over half of those surveyed found small and medium-sized businesses have become a key target.

Sensitive information relating to the personal data of your staff is vulnerable without air-tight security measures.

When armed with key information such as addresses, contact details and Social Security Numbers (SSN) or National Insurance (NI) numbers of your staff, thieves could easily exploit this information for financial gain. An anonymised employee ID system is one way to protect your business and your employees from unscrupulous hackers and criminals.

Maintain healthy records

Employee IDs are also ideal for keeping records and databases clean, streamlined, and well maintained.

Instead of sifting through files upon files of information, a simple numerical ID system allows you to search and locate information in one place. One ID code could neatly display payroll details, sick days and accrued annual leave entitlement—saving you time and reducing the chances of compromising any personal data in the process.

Your main accountant can maintain and generate ID codes on your behalf. However, as your business expands, it may be wise to transfer this responsibility into the hands of a HR department for centralised ease and overall accessibility.

Avoid name mix-ups

As a small company with few staff members, you may not need to worry about distinguishing your employees apart. However, as your business grows, an ID system could prevent an identity mix-up. Such a hiccup could see staff members issued with the wrong payslip and other confidential information being breached.

Severe payroll errors can be catastrophic for your business and could cost you a lawsuit as well as damaging figures to fix—not to mention the loss of confidence from your staff to boot. Yet these problems quickly emerge when businesses cannot keep up with their own rapid growth. Errors relating to payroll are more likely to occur in new and fast-growing companies.

Employee ID means your staff will keep the same number even if they marry or they change their name for any other reason. As such, you mitigate any risks of a potential mix-up and simultaneously ensure the continuity of accurate records.

Grant access appropriately

A key benefit of an employee ID is that the code can become a function used in the day-to-day life of all your staff members. It could be linked to the pin code which staff use to clock in and out of the building or it could be utilised within a fob system.

Either way, an employee ID code can protect sensitive information by granting access rights to appropriate people. Your senior management team would have stronger ID codes which reflect their credentials which is useful when they too need to access the personal records of their staff members. It could even grant or deny access to a specific room or to certain software.

How to format an employee ID code

With safety concerns at the forefront of any digitalised system, employers must remain vigilant in protecting employees’ SSN and/or NI number.

Merging SSN or NI numbers with employee ID is a recipe for disaster. For some data hackers, a NI number may be the key that unlocks all the information they need to impersonate your staff and steal from them. That is why the onus lies with employers and the payroll department to shield this information and keep it protected around the clock.

As a result, the employee ID number must be unique within its own right. Fortunately, however, there is no stringent format when it comes to generating employee ID. 

Whether the figure is sequential, case sensitive or a combination of letters and symbols remains entirely at your discretion. You could include a descriptive suffix or prefix within the body of the code, too. For instance, the initials ‘IT’ could indicate staff who work within the IT department while ‘MAR’ could signify marketing staff.

You could even reserve a specific code for temporary staff who fill work experience roles or internships. Although these staff members are typically unpaid, they may need their own code when accessing your company’s computers or software. A code reserved for intern staff saves you the hassle of re-issuing an ID each time the temporary role is filled.

The difference between an employee ID and a payroll number

It is pertinent to note the key difference between an employee ID and the payroll number that each employee is given. The two are different, but share striking similarities.

Generally speaking, an employee ID represents a specific employee, encompassing both payroll details and other personal information such as address, gender, age, SSN or NI number. Meanwhile, a payroll number is detailed on each payslip and is used for PAYE and tax purposes.

The key difference is that while a payroll number can be changed if a member of staff takes up a new position within the company or is re-employed, employee ID will stay the same.

With all that employee IDs can do within your business, isn’t it time you started using them? 

Start scheduling your staff online.

No credit card required, nothing to download, no mailing lists and no surprises.