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HR file management with document locators simplifies the process of storing and managing employee files. The system is integrated into Microsoft Windows, making navigation intuitive. The files are organized alphabetically by employee last name, with folder structures automatically created and customizable. This ensures consistency in folder naming and structure. The tutorial demonstrates accessing an employee's folder and reviewing documents, with a hover-over feature for quick previews. The system also automatically generates a new folder structure when a new employee is added to the payroll system.