Holding employee data comes with huge responsibilities, as some companies have found to their cost. Ignorance of the law is no defence.
The information companies hold about their employees is starting to look more like a minefield in the wake of tough regulations such as the EU’s GDPR. Failure to protect the sensitive data of its staff led to a recent class action being brought against a leading UK supermarket, on which a Supreme Court ruling is awaited. This is not an isolated case.
The main stipulations of GDPR are that organisations need good reason for collecting and holding data on any EU citizen, and for that data to be held securely or deleted upon request. Companies failing to abide by the rules risk fines of up to 4% of global turnover or €20m.
In the wake of GDPR, Asia Pacific countries such as China, Singapore, South Korea, Japan, Australia, Malaysia and the Philippines have all recently updated their data protection compliance rules or will soon be introducing new privacy and cyber-security laws.
In the US, although there is no single principal data protection legislation nor overarching authority, some federal rules are in force and most states have laws protecting the personally identifiable information of citizens, with strict controls imposed on activities such as employee monitoring.
Companies at risk
Despite the clear risks of employee data mismanagement, a new Accenture Strategy report, ‘Decoding Organisational DNA’, reveals that few companies are confident that they are not breaking the rules. In questioning 1,400 global senior executives across 13 industries, only 30% claimed to be “very confident” that they were using employee data responsibly.
Although 62% of senior executives said their organisations used employee monitoring technology to track aspects such as quality of work and the kind of interactions staff have, 55% said their organisation did not ask for employee consent before using such tools. This suggests many firms may be in contravention of current laws. They risk huge fines, and reputational damage.
The survey also questioned 10,000 lower-ranking employees. Of these, 50% think that the use of new sources of workforce data risks damaging trust between company and employee. Some 61% said recent data scandals led them to believe that their own employee data might be at risk.
Aside from the legal implications of mishandling employee data, Accenture calculates that the difference in future revenue growth rates between the data-related loss or gain of employee trust is 12.5%, or a global figure of around US$3.1trn.
However, 57% of employees questioned said they would exchange their work-related data for a “more-customised” wage, reward and benefit package. Some 53% would willingly exchange their data for better learning and development opportunities.
The difficulties of managing employee data within the law leads 33% of executives to delay investing in data collection technology as much as they would like. Some 35% said they are investing in this technology anyway and will respond accordingly when an issue arises.
“At a time when companies are using newly available workforce data to drive greater value, responsible leadership is the key to building employee trust,” said Ellyn Shook, Accenture’s chief leadership and human resources officer. “Trust is the ultimate currency – it’s the path to innovation and fuels growth by unlocking people’s potential.”
On the basis of its research, Accenture provides a ‘Framework for Responsible Use of Workforce Data’ for companies. This includes:
Giving employees more control over their own data. This helps gain employee trust but also delivers greater flow of workforce insights to improve performance. The survey reported that 70% of employees want to own their work-related data and take it with them when they leave their jobs. Just 48% of C-level executives said they would accept this.
Involving employees in the design of workforce data systems. Only 35% of businesses currently offer this opportunity.
Leveraging artificial intelligence and other technologies. Some 77% said that having reliable data gathered by new technologies will improve fairness in pay, promotions and appraisal decisions.