As HR departments and people functions are becoming more analytical and data-driven, there are some important pitfalls to watch out for. Here we look at the key ones.

1. What Are The Pitfalls Of
People Analytics And
Data-Driven HR?

2. © 2019 Bernard Marr, Bernard Marr & Co. All rights reserved
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IntroductionIntroduction
People-related data is arguably HR’s most important asset. But when data becomes a
core asset, the need for careful data governance becomes even more pressing.
Today’s HR teams potentially have access to huge amounts of data, and this can bring
great rewards for those who use that data intelligently. But, data also brings its own
unique challenges. Therefore, before implementing any data-driven HR approach, it’s
important to consider the potential pitfalls that surround employee-related data,
particularly when it comes to their personal data.
What Are The Pitfalls Of People Analytics
And Data-Driven HR?

3. © 2019 Bernard Marr, Bernard Marr & Co. All rights reserved
Data privacy
Obviously, HR teams need to operate within the data privacy laws of their country. Here in
the UK, unless you’ve been living under a rock, you’ll know that personal employee data
comes under GDPR – General Data Protection Regulation – which comes into effect in
May 2018. I talk more about this in my article ‘What GDPR means for HR teams’, but
suffice to say that GDPR will impact the way HR teams gather, store and work with
employee data.
What’s interesting about GDPR is how it cracks down on companies that take a laissez-
faire approach to data privacy. Companies that fail to properly protect employees’
personal data, or are found to be misusing personal data, face stiff fines of up to €20
million or 4% of annual worldwide turnover, whichever is the greater of the two.

4. © 2019 Bernard Marr, Bernard Marr & Co. All rights reserved
Protecting against data breaches
Amidst this harsher regulatory landscape (not to mention the reputational fallout of high-
profile data breaches), HR data must be properly secured and protected from threats. If
you think that no one would be interested in stealing your employee-related data (as
opposed to, say, customer credit card details), think again. It may surprise you to know
that medical data is 10 times more valuable to criminals than credit card data. So the
lesson is: if it contains personally identifiable information, data of any kind can be
valuable.
But hoodied criminal hackers trading data on the dark web aren’t the only source of data
breaches. The insider threat (whether malicious or through sheer ineptitude) is huge. In
one example, a Boeing employee inadvertently caused a breach that might have exposed
the personal data of 36,000 Boeing employees, including their names, date of births, and
social security numbers. How? The unlucky employee was having trouble formatting a
spreadsheet, so he sent it on to his spouse for help, unaware that the spreadsheet
contained hidden columns with confidential information.

5. © 2019 Bernard Marr, Bernard Marr & Co. All rights reserved
Protecting against data breaches
In another example, a disgruntled employee of British supermarket Morrisons deliberately
exposed colleagues’ personal data online. In a landmark High Court case, the supermarket
was found liable for the breach. Just imagine the consequences of such a breach when
GDPR is in effect. The damage to a business’s finances and reputation could be
catastrophic.

6. © 2019 Bernard Marr, Bernard Marr & Co. All rights reserved
Understanding the ethical pitfalls
As well as sitting on the right side of the law, HR teams also need to ensure their data
usage sits within the company’s ethical boundaries. Most companies these days
emphasize a culture of openness and honesty. If your data-driven HR activities fly in the
face of that culture – for example, by clumsily implementing data projects or poorly
communicating how data is used – it could lead to massive morale and trust issues.
That’s why one of the key pieces of advice I give to businesses is this: transparency.
Transparency around what employee data is being collected, transparency around why it’s
being collected, and transparency around how it will be used.

7. © 2019 Bernard Marr, Bernard Marr & Co. All rights reserved
Understanding the ethical pitfalls
It’s also important to add value for employees and emphasize the positive outcomes of
using their data. People are far happier for their data to be used when they feel they’re
getting something valuable in return, whether it’s better working conditions, more
effective management, a safer environment,
or whatever.
The importance of good governance
Practicing good data governance will help ensure your HR data remains a valuable asset
and doesn't turn into a liability.
Here’s a snapshot of what good data governance means in practice:

8. © 2019 Bernard Marr, Bernard Marr & Co. All rights reserved
Understanding the ethical pitfalls
Create data governance procedures (if you haven’t already). This may include defining
who owns the various people-related data within the organization, who is responsible for
data accuracy, who is responsible for controlling access to the data, and who is
responsible for updating the data. It should also cover how the data can be used.
Get consent for employee data. Consent is a critical pillar of data privacy. This means HR
must get employees’ express permission in order to collect and process their personal
data. It used to be that consent was assumed as part and parcel of employment. Thanks to
GDPR, that’s no longer the case.
Be strict about data usage. GDPR means you can only use personal data for the specific
purpose for which consent was given. If you want to use the data for a different purpose,
new permission is needed. It’s vital HR colleagues fully understand this, as the fines for
misusing data can be enormous.

9. © 2019 Bernard Marr, Bernard Marr & Co. All rights reserved
Understanding the ethical pitfalls
Practice data minimization. This means gathering only the very essential data, i.e., data
that can help meaningfully improve the company and add value. Data for data’s sake is
worthless, and can actually prove detrimental to the company in the long run.
Anonymise data. Wherever possible, you should anonymize personal employee data,
which means stripping it of any personal markers that link an individual to that piece of
information.
Protect and secure your data. There are certain safeguards any business can put in place
to secure data and prevent breaches. Such measures can include encrypting data, having
systems in place to detect and stop breaches while they’re happening, and training staff so
they never give away secure information.

10. © 2019 Bernard Marr, Bernard Marr & Co. All rights reserved
What Are The Pitfalls Of People Analytics
And Data-Driven HR?
Read more about how HR teams can get the most out of data and analytics, without
falling foul of the pitfalls, in my book Data-Driven HR. It’s packed with real-life examples
and practical ways HR teams can deliver maximum value in our increasingly data-driven
world.

11. © 2017 Bernard Marr , Bernard Marr & Co. All rights reserved
© 2018 Bernard Marr, Bernard Marr & Co. All rights reserved
Bernard Marr is an internationally best-selling author, popular keynote speaker, futurist, and a
strategic business & technology advisor to governments and companies. He helps
organisations improve their business performance, use data more intelligently, and
understand the implications of new technologies such as artificial intelligence, big data,
blockchains, and the Internet of Things.
LinkedIn has ranked Bernard as one of the world’s top 5 business influencers. He is a frequent
contributor to the World Economic Forum and writes a regular column for Forbes. Every day
Bernard actively engages his 1.5 million social media followers and shares content that
reaches millions of readers.
Visit The
Website
© 2017 Bernard Marr , Bernard Marr & Co. All rights reserved
© 2019 Bernard Marr, Bernard Marr & Co. All rights reserved
Bernard Marr is an internationally best-selling author, popular keynote speaker, futurist, and a
strategic business & technology advisor to governments and companies. He helps
organisations improve their business performance, use data more intelligently, and
understand the implications of new technologies such as artificial intelligence, big data,
blockchains, and the Internet of Things.
LinkedIn has ranked Bernard as one of the world’s top 5 business influencers. He is a frequent
contributor to the World Economic Forum and writes a regular column for Forbes. Every day
Bernard actively engages his 1.5 million social media followers and shares content that
reaches millions of readers.
Visit The
Website

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