December 29, 2021

Don’t Trade on Privacy When Building An HR Data Policy

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Human resources teams are often stuck in a pre-digital model of HR data, a mix of qualitative and quantitative data they can use to make correlations about employee happiness and productivity, including surveys, performance reviews, days off, sales or productivity metrics, benefits usage, and salary rates.

Companies at the cutting edge of HR data now add to that mix data from wellness apps, learning management systems, compliance training systems, and behavioral metrics collected from business software like customer relationship management software, enterprise resource planning tools, and project management software. These new data types can provide deeper, more actionable insights about employee engagement and corporate risk, but they also bring with them some concerns over privacy and bias.

Qualitative Data is More Informative but Still Labor-Intensive

Michael Alexis, CEO at said, “One of the unexpected challenges we hit with our data initiatives was that the employee survey was anonymous. Participants could identify their department, which helped provide some context, but without knowing exactly who submitted which answers it was difficult to truly understand them.” Anonymous surveys that don’t provide department, job title, or other identifying markers makes it difficult to tie insights to actionable solutions.

Because much of the most salient information from these surveys is the text in free responses, the HR team has to read it, interpret sentiment, and try to make decisions based on the most important or pressing feedback.

In the short term, Alexis and his team have expanded the amount of detail each employee can add in the survey, which gives greater context.

“One way you can mitigate this challenge is by providing form fields where employees can give full-sentence descriptions about why they answered questions in certain ways,” said Alexis.

For larger teams, consider using a feedback tool that employs natural language processing (NLP) for sentiment analysis. A performance and evaluation software like Lattice can scan employee surveys, reviews, and other internal documents to better understand who might warrant intervention.

Also Read: What is structured vs. unstructured data?

Expanding Your Quantitative Data Collection

It’s easy to get stuck in the old data models that human resources teams can collect and make use of. While the number of PTO days, productivity, and net promoter score (NPS) may provide valuable data, these are often lagging indicators of how well the company is serving its employees. Other indicators, like employee growth and engagement can be measured through learning initiatives and training tools.

“HR teams can use data analytics to truly understand their employees and ensure learning and development objectives target individuals,” said Darren Hockley, managing director at DeltaNet International.

For example, when HR teams employ phishing simulations or security tests, they can gain valuable feedback about the success of their training. He states that companies that use simulated phishing emails to employees to test cybersecurity awareness can then target training and compliance follow-ups with more precision.

Risk Management Data Collection Requires Consent

Some companies that have invested in employee data collection have implemented risk management solutions that monitor a wide range of internal and external employee behaviors. These tools, combined with individual employee reporting, can tip leaders off to behaviors that may require interventions, whether it’s to re-engage employees who show lowered productivity or stop toxic behavior before it becomes a legal issue where the company may be found liable.

“Often HR and organization leaders are not aware of employee misconduct or incidents of toxic workplace behavior in their company,” said Tom Miller, CEO of behavioral risk management platform ClearForce. “Employees don’t always report incidents because they either don’t know what to report or don’t believe their report will be kept anonymous.

“By implementing a reporting portal, HR leaders can configure their risk management policy and collect more meaningful data from employees based on reporting.”

ClearForce’s employee reporting portal can aggregate internal business data and decisions alongside individual employee reports, which can help HR teams collect enough data to confidently make tough decisions.

But Miller warns that data can show bias, and HR teams should “initially anonymize behavioral alerts until the identity of an employee is required. This will prevent judgmental decisions on who to act upon and prevent personal preference or grievance or even favoritism to enter the decision-making process, a necessity for EEOC compliance.”

If your company decides to continuously or periodically monitor external data like credit reports, arrest records, or other background screening, Miller also notes that you must gain consent to remain compliant with the Fair Credit Reporting Act (FCRA).

“Instituting a practice of annual or semi-annual consent reminders or self-certification forms improves compliance and creates deterrence, as it reminds employees that the program is still in place and operational,” said Miller. “This is a best practice for smoothing the process when a problem arises and makes it more difficult for employees to claim they were unaware of these policies.”

Also Read: The Key to Employee Retention: Knowing What Your Individual Contributors Care About

Access to Health and Wellness Data is Increasingly Available to HR Teams

Many companies are investing in the daily health and wellness of their employees with company-provided subscriptions to wellness apps, added healthcare benefits for wellness, and tools to improve mental health. All of these tools are ways to improve the benefits the company provides to its employees while also lowering the company’s healthcare-related financial liability by promoting better health.

Employers and third-party companies can collect personal health-related information like weight, eating patterns, and exercise habits. Most of this information is not covered by HIPAA laws, and doesn’t require more than a simple consent form to collect. Elisabeth Duncan, VP of human resources at Evive, a healthcare platform that aims to help employees connect with timely and personalized care, says that predictive analytics based on employee data points can nudge employees toward better health-related decisions.

“Predictive analytics does this by analyzing data about each employee, including demographics, socio-economic status, benefits usage, habits, environmental variables, and life events to generate timely recommendations and messages tailored to the individual health, financial, and lifestyle needs of each employee,” said Duncan. All of this information is readily available through HR data points or can be provided directly by the employee.

And an application that prompts employees toward healthy behaviors can have positive effects on behavior.

“These messages provide the encouragement employees need to take empowered action, such as completing preventive screenings on time; choosing cost-saving, in-network sites of care; and making more strategic choices in health plan selection,” said Duncan.

These actions can benefit the company and the employee through preventative actions that ultimately save money for both. Duncan points out that in addition to financial benefits, these tools can also “serve as a key differentiator in an organization’s employee retention strategy.”

Data Collection Policies Require Careful Consideration

From an HR perspective, implementing software and data collection tools — tools that point employees toward health and wellness opportunities, monitor for toxic activities and behaviors, or simply go beyond the incomplete data contained in the annual survey — should be considered with an abundance of caution.

While many employees may react to consent forms or personalized wellness reminders with a relaxed, “I have nothing to hide,” attitude, the company will need to focus the clarity of its messaging on reassuring other employees who feel the tools invade their privacy. It’s one thing to monitor an employee’s engagement at work but quite another to provide resources for a medical condition that the employee has not disclosed.

Many employees choose to keep parts of their personal lives secret from their employers for fear of retaliation, whether intentional or not. HR data, including feedback from surveys and performance tools, should be used when choosing data collection tools and building HR data policies. Companies should invest in tools and programs that allow employees to retain their privacy while also contributing to the company’s objectives.

Read Next: Using Performance Management Software to Combat Burnout

Top Human Resources Software Recommendations

1 Paycor

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Paycor’s HR software modernizes every aspect of people management, which saves leaders time and gives them the powerful analytics they need to build winning teams. Paycor provides a full suite of HCM solutions with a single source of truth for employee data, so users never have to switch platforms, log-in to multiple systems, re-key data or open multiple spreadsheets. Everyday processes become simplified, allowing organizations to focus on their most important work.

Learn more about Paycor

2 Factorial HR

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Complete HRIS solution. All your HR processes in a single place, improve the management of your business.
Factorial converts never-ending, manual processes into integrated, effective ones.

Learn more about Factorial HR

3 GoCo

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GoCo is modern HR, benefits, and payroll, built for flexibility and ease-of-use in mind. Manage records, performance, time off, onboarding, benefits, and more all in one place. GoCo is a secure, compliant hub for sending, digitally signing, and organizing your sensitive HR documents and data. Unlike other HRIS platforms, GoCo is built to be flexible enough to support existing processes, policies, and providers, so you don't have to change the way you work just to adopt a modern HR system.

Learn more about GoCo

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