People Data Ethics: Balancing Privacy and Productivity in HR

The topic of People Data Ethics has moved up HR’s agenda in recent years, particularly with the integration of artificial intelligence (AI) in many HR processes. A great deal of sensitive employee data is being held within organisations, making HR Data Privacy a critical concern. Providing a guarantee that personal information is safe is a powerful tool for improving the employee experience and driving organisational success. This includes the critical aspects of data processing and ensuring compliance with data privacy laws. HR departments must be vigilant about data protection laws and the handling of employees’ personal data.

A global study from The Chartered Institute of Personnel and Development (CIPD) found that HR professionals use people data to tackle significant challenges, with three-quarters (75%) tackling workforce performance and productivity issues. Despite its prevalence across many areas of business, there remain several ethical challenges associated with collecting, storing, and using this data, that will ensure that employee privacy and consent are at the forefront of organisations’ security concerns.

Creating a better employee experience

HR can use its organisation’s people data to enhance the working lives of its employees by improving and informing any initiatives it puts in place. HR departments should also ensure that background checks and employment contracts comply with relevant employment laws. It is essential to inform employees about how their data is collected and processed., showcasing the importance of People Data Ethics. For example, within Equity, Diversity, and Inclusion (EDI) practices, people professionals can collect, collate, and analyse employee demographics, identifying any areas that lack diversity. This approach underscores the importance of Ethical Data Practices in HR. This information can help develop strategies to address these gaps. For the executive team, often approaching EDI programmes from a data-driven angle will secure buy-in and help measure any demonstrable changes and the impact of these initiatives.

EDI is a top priority for 77% of talent professionals, according to a recent LinkedIn study, primarily because data insights drive it. Companies can track progress over time using this data and maintain any EDI efforts so that tangible improvements are made within their workplace. Similarly, analysing recruitment and retention data can unearth any biases in the hiring process, or even identify departments in the company with a high churn amongst underrepresented groups. HR can respond accordingly, armed with the data to ensure compliance and fairness.

Trendspotting in employee benefits and development programmes is another area where data insights can shape the employee experience, highlighting the role of People Data Ethics. Conducting regular employee surveys and feedback sessions can provide insights into the needs and wants of the workforce, addressing any issues before they escalate. This practice aligns with HR Data Privacy principles by ensuring employee feedback is handled responsibly. Ultimately, this results in a more positive and productive culture and gives people a means of expressing any concerns.

A Question of Privacy and Consent

While the benefits of using employee data are clear, it is equally important to balance this with the need to protect privacy and obtain informed consent. Organisations must establish access controls to prevent data breaches and meet their legal obligations. A core aspect of People Data Ethics. Staff have a right to know what information is being held about them, how it is stored, its intended use, and who has access, adhering to HR Data Privacy standards. Being completely transparent in all communication surrounding data practices will help build that essential trust and ensure compliance with legal and ethical standards.

According to a 2023 report by the International Association of Privacy Professionals (IAPP), concerns about the handling of personal information remain a concern for 62% of employees surveyed. This supports the argument for transparency about data collection purposes and ensuring consent is given when collecting sensitive personal data. Consent forms, for example, should be clear and straightforward, detailing the purpose of data collection and how it will be used.

This extends to data protection measures to safeguard employee data from unauthorised access and security breaches, crucial for Employee Data Protection. There are simple practices HR can undertake, such as regular audit checks and updates to security procedures, which can help prevent breaches and maintain the integrity of people data in the organisation. Adopting Ethical Data Practices in HR ensures compliance with the General Data Protection Regulation (GDPR) and similar regulations worldwide, providing robust guidance that HR can implement into their own organisational policies.

Training HR on Ethical Data Practices

While HR is no stranger to protocol, navigating the complexities of people data adds another layer of legal requirements they need to get used to, emphasising the need for understanding People Data Ethics. Training should cover data processing and the importance of processing data in compliance with all relevant laws. Emphasising the need for understanding People Data Ethics. A 2023 study by the Society for Human Resource Management (SHRM) revealed that only 45% of HR professionals feel confident in their knowledge of data privacy regulations. There is clearly a requirement for more training in data practices, the ethical implications of data analytics, the importance of obtaining informed consent, and strategies for ensuring data accuracy and relevance. Sessions on Ethical Data Practices in HR and gaining an understanding of the principles of transparency and data security are essential for HR to ensure best practices for ethical data usage.

HR must take a proactive approach to this training and lead by example. Like many other HR disciplines, the more commonplace they are, the more successfully embedded they will become in the organisation. This will also underpin employee confidence in the HR team, reassuring staff that their sensitive data is being handled, stored and managed appropriately and securely. This extends to continuous learning and the need to formalise training within companies in order to foster ethical awareness, encourage open discussions about data ethics and create channels for employees to voice concerns.

People Data is a bedrock for organisational success

The ethical challenges associated with collecting, storing, and using this data cannot be underplayed, highlighting the importance of People Data Ethics. Rather than seeing it as a necessary evil, HR can become digital data managers, balancing the benefits of people data with the need to protect employee privacy and ensure informed consent. Investment in training and open, transparent conversations about the evolving digital workplace will help promote a transparent, psychologically safe workplace for all employees, aligning with HR Data Privacy and Employee Data Protection standards. 

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