People analytics offers the best opportunities for companies to improve the hiring, management and efficiency of their employees, but this doesn't stop it from being a contentious and hotly-debated issue.
With the Facebook Cambridge Analytica scandal putting the importance of data privacy front and center, it's never been more crucial for companies to decide where they stand on people analytics and how they want to implement it.
Businesses are now collecting more information than ever about their workforce, which opens them up to a host of risks relating to the misuse, theft, or concealment of personal data. Regardless of the number of employees employed or the amount of information collected, all companies are under great pressure to collect, use and store this data responsibly.
But why are so many businesses spying on their employees?
In its 2018 Global Human Capital Trends survey, Deloitte highlights three core reasons to explain the surge in popularity of people analytics:
- Productivity and employee engagement, as well as social issues such as diversity and gender pay equity, are becoming more important, putting more emphasis on management techniques.
- There are more resources to allow companies to collect data.
- Data security and privacy are key issues so employers want to know how to safeguard personal information.
Why should businesses track their employees?
People analytics has come a long way, allowing businesses to measure and monitor internal communications, productivity, efficiency and even attitude. These all have very obvious benefits for a company that wants to set itself apart from its competitors.
Advanced software can collect employee feedback, identify areas where improvements could be made and then send management personnel tips and advice on how to implement changes. This not only helps companies improve retention but could also boost collaboration and productivity in teams.
Employers can also track emails, phone conversations, online meetings and other interactions to help them highlight problems at the earliest opportunity or hone in on otherwise overlooked opportunities.
What are the risks?
Deloitte's research highlights two main risks that businesses view to be the most pressing: legal implications of storing personal data and employees' perception of data storage. However, companies don't appear to be putting the necessary measures in place to safeguard them from these dangers.
Although 75% of the companies surveyed saw the need for data security, only 22% had excellent safeguards to protect employee data. There's also the potential risk of damaging morale as a result of implementing people analytics. If employers aren't completely transparent about the way they use, store and collect personal data on employees, as well as what their overall intentions are, they'll face personnel backlash as well as potential legal action.
When is it too far?
One of the key factors that has been highlighted by the recent General Data Protection Regulation (GDPR) affecting businesses working inside the European Union is that no company should be collecting data without a clear purpose.
GDPR sets the standard that data should be deleted safely as soon as it is no longer being used for its initial purpose. Even businesses working outside of the GDPR area should hold themselves to a similar standard as most countries are subject to requirements to only store data for a specific purpose.
To avoid falling foul of these requirements, it's a good idea to have a clear objective in place for any data being collected. This should include a transparent strategy on what data is being gathered, for what purpose, and how it will be decided whether it's being effective. It's also wise to include a return on investment benchmark that will justify the time, effort and risk of holding personal data.
Another reason companies may find themselves in jeopardy is by collecting personal information that isn't necessary. Anonymizing data is an easy step for any company to take that protects both individuals and employers. Software can automatically anonymize data to remove details that aren’t needed to realize your objective. Businesses can also only allow data to be stored in groups so it's impossible to find specific information about any single person.
If this isn't possible, consent is vital. Giving employees the right to know how their data is being used and asking their consent before you start gathering it are both important steps to take. Using an opt-out is the easiest way of achieving this, while still getting the information you need. Employees are given the opportunity to remove themselves from the study and their consent is assumed if they don't.
You should also limit the number of people who have access to sensitive information, which will further protect the employer and individuals.
Walking the line
Despite the significant risks of monitoring employees, there is too much potential value to people analytics for businesses not to invest in it. However, it's crucial that organizations do the right research to implement secure policies and safeguards to ensure all measures are taken to minimize the threat.
Security has to be at the heart of any personal data storage. Anonymization and encryption can both be used to mitigate risk but these need to be part of a wider strategy that also involves training, risk assessments and clear company policies.
As companies look to collect larger amounts of data, it's important that they stick to the principles set out in their strategy. Escalation of any process is always an opportunity for slip-ups to happen but businesses need to prioritize personal data security even more as they scale up the amount of information being used.
Mapping the journey of data can help companies to mitigate the risk, allowing them to keep track of where information is coming from and where it's being stored. For further protection, companies can outsource data collection to a third party. Software can automatically take data from your employees and securely send it to another company that will perform the data cleansing, anonymization and aggregation.
This completely removes the risk of privacy violations from the employer and allows the sensitive information to be dealt with by specialists.
There is a significant opportunity for employers in people analytics but it's crucial that they take the right measures to safeguard themselves and their employees. This requires a proactive approach to data security rather than just reacting to issues when they arise.
By being transparent and respectful with employees, companies can remove any friction or bad feelings that may come from the workforce, while allowing employers to take advantage of the potential of people analytics.