How the drive to improve employee experience could trigger a ‘data-privacy crisis’

How much personal information would you feel comfortable with your company knowing, even if it improves the working experience? Where is the line? Also, will that boundary be different for your colleagues?

Right now, it’s all a gray area, but it could darken quickly. Because of that fuzziness and subjectivity, it’s a tricky balance to strike for employers. On the one hand, they are being encouraged — if not urged — to dial up personalization to attract and retain top talent. On the other hand, however, with too much information on staff, they might be accused of taking liberties and trespassing on data privacy issues. 

In 2023, organizations are increasingly using emerging technologies — artificial intelligence (AI) assistants, wearables, and so on — to collect more data on employees’ health, family situations, living conditions, and mental health to respond more effectively to their needs. But embracing these technologies has the potential to trigger a “data-privacy crisis,” warned Emily Rose McRae, senior director of management consultancy Gartner’s human resources practice.

Earlier in January, Gartner identified that “as organizations get more personal with employee support, it will create new data risks” as one of the top nine workplace predictions for chief human resource offices this year.

“A lot of the tech solutions employers are offering were initially used in employees’ personal lives, and that’s a bit creepy,” said Washington D.C.-based McRae. For example, data from fitness apps, wearable devices, interaction with AI chatbots, and more can uncover “a ton of information” about a person’s health, family circumstances, and more. “It starts to become, well, a little too personal.”

And this creepiness, sparked by an opaque approach to data gathering, might not be generated by design but a result of naive handling or a lack of experience or thought.

Transparency, trust and empowerment

For both employee and employer, the latter should be clear about what data is being tracked and for what reason, stressed McRae. “Organizations need to get better at governing and managing data — and if data is being collected, you must tell people where it is stored before there is a hack and sensitive information is leaked,” she said.

The shift to being transparent with employee data is “quite an adjustment” for many organizations, added McRae. “Previously, they have been able to say: ‘We’re your employer, we get to collect this data, deal with it,’” she said. “And they might not even disclose they have even collected the data.”

McRae floated the notion that progressive organizations will create an “employee data bill of rights” that focuses on transparency around how employers collect, use and store staff data. Further, such a document would empower employees to opt out of practices they find objectionable, strengthening the bond of trust.

There are signs of significant evolution in this space, said McRae, and the direction of travel is evident if one considers what the front runners are doing. “A few proactive companies are even considering paying their employees for their data,” she added.

“Organizations need to get better at governing and managing data – and if data is being collected, you must tell people where it is stored before there is a hack and sensitive information is leaked.”

Emily Rose McRae, senior director of management consultancy Gartner’s human resources practice.

Besides, data privacy laws are likely to be tightened in the coming years — if not months — and it would be wise for organizations to ensure they are at least one step ahead. For instance, Paul Kelly, head of employment law at Blacks Solicitors in Leeds, in the U.K., pointed out that “workplace monitoring” is legal in the U.K. and employers may have “many legitimate reasons” for surveilling staff — including to prevent theft or comply with health and safety regulations.

Elsewhere, in California, employee privacy litigation came into effect earlier in January, noted William Gamble, global privacy and cybersecurity compliance consultant at IT Governance USA. “The one hot area in the U.S. for litigations has been the Biometric Information Privacy Act in Illinois,” he added. This is a law that governs the use, collection, and storage of biometric data, including retina or iris scans, fingerprints, voiceprints, and scans of hand or face geometry.

Positive approach to data governance 

Legalities aside, Kelly argued that adopting a positive approach to data governance would be wise for organizations, especially those with a dispersed workforce. “In the new age of hybrid working, employers need to look at how they can harness the benefits of home working to increase productivity and build trust with their remote staff rather than take the regressive and draconian step of micromanagement and intrusive spying,” he said.

London-based Alexander Milner-Smith, partner and co-head of the data and privacy group at international law firm Lewis Silkin, said employers looking to improve the employee experience through greater personalization should learn from what works — and what doesn’t — in the consumer world.

“Any employer diving into employee personalization would be well advised to look at how this has been viewed in the marketplace to work out what has gone right and wrong,” said Milner-Smith. He added that it would be “a good idea — as data regulators often recommend — to gain employee buy-in and feedback very early in the piece” before any technical build takes place.

Natalie Cramp, CEO of London-head-quartered data science firm Profusion, revealed recent proprietary research suggested that “the majority of employees are comfortable with data gathered from workplace monitoring” being used by employers. Primarily, this acceptance is down to the belief that “it may help to level the playing field for performance assessment,” she said.

“Any employer diving into employee personalization would be well advised to look at how this has been viewed in the marketplace to work out what has gone right and wrong.”

Alexander Milner-Smith, partner and co-head of the data and privacy group at international law firm Lewis Silkin.

Cramp extolled the benefits of “a data-driven approach,” particularly around matching staff with internal job openings and career progression. “Businesses should look to make sure they have a consistent review structure with clear goals and expectations in place to reduce subjectivity, allowing employers to track employee performance easily and transparently,” she said.

Indeed, when promotion decisions hinge on performance analytics, employees would better understand what is expected of them and could focus on specific areas. “It can also allow businesses to source proven talent from unexpected people — maybe the quieter one in the office who is less likely to shout about their performance,” Cramp added.