How Much Employee Data is Too Much?

by Crystel Robbins Rynne, COO of HRLocker

Everything we do in the workplace creates data. Email chains capture conversations. Every business expense makes storing e-tickets, payments, and vehicle trackers necessary. Mammoth spreadsheets record performance metrics. The list goes on and on. Much of this data sits with HR teams and is often highly sensitive.

Unsecured, inaccurate, and outdated data puts businesses in breach of GDPR. Failing to store information safely can undermine employee trust, put companies at risk of data breaches, and destroy reputations. Keeping data safe and secure is non-negotiable– But that’s easier said than done when there’s just so much of it.

Keeping a limited amount of data in a secure and centralised system can reduce the chance of theft, corruption, and human error. HR teams must limit what they keep without missing out on vital data insights.

The true value of HR data  

HR teams keep different data for different reasons. Retaining some employee data is a legal requirement – like employment records and details about pay, leave, and contributions. However, other non-essential data is kept to improve the employee experience, business performance, and company culture.

Performance reviews are an essential tool for leaders to evaluate employees’ strengths, weaknesses, and areas of improvement. By keeping track of this information, managers can identify patterns and trends in employee performance, provide targeted feedback, and develop strategies to help employees achieve their goals.

Employee feedback provides valuable insights into the factors that contribute to turnover. Understanding why employees leave is crucial in improving a company’s retention rate. The information spotlights areas of improvement and informs implementable changes that address employee concerns, ultimately leading to a more satisfied, engaged and loyal workforce.

Learning and development data is a valuable resource for businesses when succession planning. By delving into this data, companies get a comprehensive understanding of the strengths and weaknesses of their workforce. As a result, organisations can implement targeted training programs that help employees develop the skills required for career progression, leading to improved performance and overall productivity.

There are countless benefits to a data-driven HR approach. Companies can use this information to improve engagement, progression, and retention. But it all hinges on the quality and quantity of data collected. And many HR departments are failing to collect enough of the right data to make a meaningful impact.

The risk of too much HR data

We’ve all been told that data is the be-all and end-all– that it can solve all our problems. It’s why companies fall into the over-collection trap. Holding onto data they’ve been told is important – but lacking the facility, capacity, and understanding to use and manage it properly.

Storing too much of the wrong data can put businesses in breach of GDPR. H&M found this in 2020 when it overstepped the mark on people analytics and received a fine for keeping excessive employee records.

Under GDPR rules, businesses must ensure the data they keep is accurate and up to date and that proper security is in place to protect against unlawful or unauthorised access. But another key element of the legislation is to only keep what is necessary and use it in an adequate and relevant way. If you can’t justify what you’re saving, you shouldn’t keep it. The more you have, the more you need to protect.

Beyond compliance, good data practices are essential for employee, partner, and investor relationships. When private information isn’t kept safe, it’s not only a breach of regulations – it’s a breach of trust.

HR professionals have leaned on spreadsheets for years to manage and maintain employee data. But this isn’t the most secure option. It’s all too easy to click in a spreadsheet cell and alter or delete data – undermining the accuracy and reliability of information. And it’s harder to garner data insights from spreadsheets. You can see the information but can’t always see what it means.

Tips for better data management

Modern data management systems offer encryption and security protections that top even the most tightly monitored spreadsheet. With advanced data analytics capabilities, you can do more good with the information you collect.

When you strip back your data collection approach – so only the relevant information is stored, maintained, and used responsibly – you build trust with your employees at a time when retention couldn’t be more critical.

Run an audit on your employee data – if there isn’t a clear reason for collecting it, you shouldn’t have it. Assess how your current data is helping towards specific company objectives – if it isn’t helping, perhaps you’re not focusing on the right data. It may be time to re-evaluate your focus and shift your attention to collecting and analysing more relevant data aligned with your business goals.

Empower employees to manage their data where possible – provide a connected app to your HR platform that lets teams update their data. Providing this tool ensures that your employees can take ownership and manage their information accurately and efficiently while minimising the need for HR staff to update employee records manually.

Use a system that enables you to customise data access – only let people see the information they’re authorised for. This not only protects privacy but also helps to build trust with the employees who rely on your organisation to handle their information responsibly.

Centralise all your employee data in a secure space – to increase protection and stop private information from moving around in the wrong places. This includes information such as employee personal details, employment history, payroll data, performance reviews, and any other confidential or sensitive records.

Managing employee data is crucial for HR departments to ensure compliance with regulations, build trust with employees, and improve business performance. While collecting data is essential, HR teams must focus on collecting and using only relevant data responsibly. By using modern data management systems and running regular audits, HR departments can protect sensitive data, gain valuable insights, and foster a culture of trust and transparency. With the right approach to data management, companies can improve their retention rate and overall productivity, leading to greater success in the long run