Employment contracts form the foundation of an employment relationship and contain important information about the employee as well as the rights and obligations of employer and employee. However, capturing this information is a tedious process for HR departments in companies. In this article, we address the difficulties you face when dealing with employment contracts and present a breakthrough solution (with a view of the platform).
Key takeaways: Complex, unstructured documents such as employment contracts, which are available both in digital form and still in paper form, cause problems for companies. Efficient processes are hardly possible as a result. With an intelligent document processing solution based on artificial intelligence (AI), companies can finally approach the efficient and cost-effective processing of employment contracts.
The employment contract: essential data, unstructured document
The data from employment contracts is important for companies in various use cases, including:
- Employee Onbarding: After signing the employment contract, HR departments need to extract data from it, for example, to set up the new employees in the company’s systems and ensure that they receive the right compensation and benefits.
- Contract changes: When changes to the employment contract are pending, it is important for companies to be able to quickly access all data from the employment contracts of all employees.
- Payroll: The data from the employment contracts is essential for the payroll teams and for the preparation of the payroll.
- Management of social benefits: HR departments rely on data from employment contracts to manage their employees’ social benefits.
In all use cases, it is important that companies can access all relevant information in the employment contract of each individual employee at any time and as quickly as possible. However, this is where the difficulties lie, because the employment contract is a complex document that comes in an unstructured form. In addition, employment contracts can contain numerous boxes to check as well as handwritten notes, which makes the automated processing even more difficult.
Other difficulties with work contracts:
- Different formats: Employment contracts exist in different formats, which makes standardization of data extraction difficult. Different layouts, fonts and languages make the task even more complex. Moreover, the employment contract is one of those documents where paper form is still common.
- Time-consuming manual data entry: Especially for large companies that rely on manual data entry to extract information from employment contracts, this process is not only enormously time-consuming, but also error-prone.
No satisfactory solution: manual processing or conventional OCR
In addition to purely capturing data from employment contracts manually, companies also use conventional Optical Character Recognition (OCR) solutions. Although this helps in converting paper employment contracts into digital formats, these systems are severely limited:
Template-based solutions are only helpful to the extent that the layout does not change. Even the smallest deviations in the employment contract, such as a date in a different place in the document, pose a problem and lead to misinterpretation of the data. The same applies to documents that are of poor quality or contain handwritten notes such as signatures. Traditional OCR solutions have difficulty identifying data. The solution extracts the data inaccurately, making intervention and manual corrections inevitable. Clearly, none of these approaches is satisfactory for the modern enterprise.
Advanced approach to document processing
The processing of employment contracts works in a completely different way with Parashift. Parashift offers an innovative approach to realize the automated classification and extraction of complex documents such as the employment contract. The Intelligent Document Processing (IDP) solution does this by leveraging various Artificial Intelligence (AI) technologies and the unique approach of Document Swarm Learning. Document Swarm Learning is a global data network that enables document classification and data extraction that is second to none.
To do this, the “document swarm,” the core technology of the Parashift IDP platform, is driven by machine learning algorithms trained on billions of data points. Document types are separated into individual fields and the learnings are shared across all customers and across all document types on the platform in a fully GDPR compliant manner. This unique approach (industry agnostic and language agnostic) creates unprecedented accuracy in the handling of all documents. This provides a number of benefits when processing your employment contracts, including:
- Accuracy: Parashift’s AI technology ensures a high level of accuracy in data extraction and reduces the risk of errors that can lead to compliance issues and costly mistakes.
- Efficiency: Parashift’s platform significantly speeds up the extraction process, saving valuable time and resources.
- Adaptability: Parashift’s AI is adaptable to different document layouts and languages, making it suitable for all employment contracts, regardless of format or layout. Completely unstructured documents, with checkboxes and handwritten notes or signatures pose no problem whatsoever.
At the same time, integrating the Parashift IDP solution is simple: you can easily integrate it with your existing processes and business applications. In addition, the platform offers a user-friendly UI that makes it convenient for everyday business users to set up additional document types.
The work contract is one of the 15 most processed document types on the Parashift platform. Curious which document type is in the top 10? The bank statement is ranked 6th most processed document on the Parashift IDP platform.
Platform view: automated data extraction, generative AI
Let’s take a look at Parashift’s Intelligent Document Processing platform. For a better understanding of the user interface, we have picked out two screenshots from the platform:
- the employment contract in extraction mode.
- a correspondence in DocGenius (generative AI).
A quick look at the first screenshot confirms it: With the Parashift platform, you can automatically process unstructured documents like the employment contract. In doing so, you only read out the data that is important to you – and no more. For example, you can automatically extract the following relevant data from employment contracts:
- Employer: Company name, address, postal code, city, etc.
- Employee: Employee name, date of birth, address, postal code, city, etc.
- General information: Contract date, job title, start of contract, end of contract (if temporary employment contract), working time, etc.
As you can see in the second screenshot, in addition to accurately extracting this relevant data from the employment contract, Parashift goes a step further. With the introduction of fully EU GDPR compliant Large Language Models (LLM) using proprietary Document Swarm Learning, you get the benefit of generative AI. This not only gives you the ability to automatically extract the unstructured data, convert it to a structured format, and pass it on to downstream business processes, but also allows you to ask questions about the document in a chat-like format:
- “What kind of document is it?” (You receive the written information that the document is an employment contract).
- “Give me a summary of the employment contract.” (You receive the written summary of the employment contract in seconds).
The Parashift team is focused on leveraging these innovative technologies along with the rapidly growing data network in the document space while maintaining high standards for information security and compliance. This enables insurers and banks to use the Intelligent Document Processing cloud platform for their customer-identifying data (CID).
Conclusion: Process work contracts with AI and reduce costs
The challenges of extracting data from unstructured documents like employment contracts are significant, but the solution is obvious. The Parashift platform provides an efficient and adaptable means of handling these complex documents. By using Parashift, you can reduce costs while always ensuring high standards of information security and compliance.
With Parashift, you’ve found the perfect partner for automating your employment contract processing (and, thanks to the industry-agnostic and language-agnostic platform, far beyond!). Talk to one of our experts about your requirements and needs. Or test the intuitive Intelligent Document Processing platform yourself right now for 14 days, free of charge and without any obligation.
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