7 Best Practices for Employee Data Management

by Kylee Stone Sep 5,2022

The People Strategy Leaders Podcast

with Srikant Chellappa, CEO

Data is present throughout the employee cycle, from the data-driven recruitment phase to the employee exit interview. But how would you feel if we told you there’s a chance you’re missing vital information about your employees?

You may not know how many people moved over the last few years? Or if they have the right skills for the next big project you’re about to undertake. Maybe you don’t know enough about their expense reports.

When you handle massive amounts of employee data, it’s easy to lose sight of what’s essential for your organization and how to leverage it to move your company forward. 

What Is Employee Data Management?

Employee data management involves collecting, storing, and maintaining critical information concerning your organization’s employees.

data management best practices 

From personal bios and medical information right down to employment details and performance data, collecting data from each employee is a fundamental HR requirement. But this operational need of maintaining and managing the information collected at onboarding, during employment, and throughout their tenure from employees is an arduous task. 

Why? Employee data can be required for statutory purposes and, therefore, must be maintained for long periods. If you don’t want to spend too much time and effort doing this, you need a master plan for collecting, organizing, and retaining all that data to comply with legal regulations.

Benefits of Employee Data Management

Employee data management can be challenging, but it’s especially essential in today’s data-driven company culture. The fact you get several significant benefits further sweetens the deal. 

These are the benefits of effectively managing your employee data:

Creates a Comprehensive Picture of Your Workforce

Employee data management gives you a good understanding of: 

  • who works for you, 
  • how long they have worked, 
  • what skill sets they possess, and 
  • their overall work performance. 

Knowing this information can help you accumulate your overall organization strategy and create a more productive work environment by assigning the right people to the right roles.

Saves Time

Correctly collecting and storing your employee’s information saves you time as you can easily access the data when needed without extra hassle.

Boosts Operational Efficiency

Employee data management makes your operations more efficient. You know what’s going on with your employees, what needs to be updated, and which HR processes need optimization to eliminate bottlenecks and ensure smooth working.

Identifies Human Capital Trends

Managing employee data also helps you spot trends related to your workforce. For instance, you may notice employees tend to leave your organization after a 2-year stay. After knowing this, you can focus on building programs aimed at improving staff retention.

Ensures Compliance

Data laws exist to ensure the safety of your sensitive documents and information. Incorporating these laws in your data management processes helps you maintain legal compliance and gives you greater peace of mind.

7 Types of Data to Store

It isn’t unusual to wonder what kinds of employee data impact your organization most. Here’s a list of the common data types you should store in your employee database:

data management best practices

Demographic Information

These are basic details about your employees. Think: their gender, age, marital status, educational qualifications, and nationality. 

This data tells you what kind of people you have in your workforce, their general characteristics, and how diversified they are. Knowing this information always comes in handy, so ensure you store in an easily accessible place. 

While you’re at it, limit the number of people that have access to demographic data as it’s still sensitive.

Medical Information

Medical data helps you maintain a safe workplace, so keeping and managing these data properly is essential. In fact, 87% of company leaders say they collect pandemic-related medical data, including vaccine status, COVID-19 tests, and temperature checks. 

Similarly, you can also store your employees’ medical data, including drug tests, the Family and Medical Leave Act (FMLA)-related, and COVID-19-related information. 

Employment Details

Employment details consist of records such as past work experiences, employment agreements, hiring incentives, background check results, and legal documents showing each individual’s employment terms. 

Other information includes employee ID number, leave policies, and bank details for receiving salaries. 

Job Details

No, job details and employment details aren’t the same. 

Job details comprise job description, skills and expertise, current projects, and location. This information helps you identify employees who currently don’t have work assigned to them in existing projects and have the capacity to take on more tasks within the organization.

Make sure these details are updated annually, as well as when new projects come up.

Training and Skills Development Data

Employees need training and development to reach their full potential and gain the necessary skills to do their duties effectively. An example of such an activity is the sales training game, just one of many strategies to improve sales performance.

As these trainings occur periodically, it’s vital to accurately record the training each employee gets and what skill sets they have or need to have. 

Doing this will help you maintain an inventory of employee skill sets and identify any skill gaps that require additional training. You can also decide which employees can take on more responsibilities like a managerial role.

Performance Data

Many organizations regularly evaluate their employees’ performance engagement through annual or quarterly performance appraisals. 

Storing relevant HR metrics data helps you track your workers’ progress and gives you information like, say, the state of high-performing sales teams. You can then set goals and expectations for other employees in different departments of the company. 

Keeping sales performance data also helps you brainstorm employee reward and recognition ideas for awards and achievements events.

Also Read: A complete guide to performance management

Employee Feedback Data

These include data from onboarding surveys, employee engagement surveys and templates, and exit interviews. The valuable information generated from the channels will allow you to make changes and improvements across your organization whenever necessary. 

7 Best Practices and Tips for Effective Employee Data Management

Now that you know the kinds of data you need to store, let’s find out the best ways to manage it.

1. Assess and Audit the Data You Have

Carefully assess the data currently stored in your HR department. What kinds of data do you currently have, and how important are they for your organization?  

You must understand the information on your employees, both past and present, so you know how to organize and store them. Certain records shouldn’t be kept for long, so it’s vital to determine when to delete them from your data management system. 

2. Categorize Your Stored Data

It makes sense to separate the data you collected from your employees and then organize and store it.

Let us explain—suppose you have a large organization and find yourself responsible for handling massive amounts of data after interpreting employee engagement survey results.

 How do you do it? The most effective way is to categorize the data by creating data segments, such as gender, location, and department. 

Categorizing enables your HR department to easily access all employees information, saving precious time that would otherwise have been wasted scouring and locating scattered files. It also protects sensitive information by storing them separately from non-sensitive data.

3. Limit Access of Employee Data to Authorized Users

Certain employee details like medical records are confidential and should only be assessed by authorized users. 

Create a structure that lets you define who should have access to such data. Passwords and multi-factor authentication may not be enough. In such cases, consider implementing policies that require approval from top-level management before getting access to any sensitive information.

4. Redesign Data Handling Methods

The first step to redesigning your data management is getting clarity on the existing laws on employee data storage. Follow this up by evaluating your current techniques for collecting, sorting, and processing employee information.

Always ask your employees for permission before storing their information and let them know the measures you have in place to protect it. This is especially important when you have sensitive information like medical records. Research shows only 1 in 4 employees feel comfortable giving out such information to their employer. 

We also recommend referring to the employee data bill of rights document to better understand the appropriate way to handle employee data.

5. Use a Data Management Software

There’s hardly any room for error when managing employee data, which is why automation is the best. 

A data management software keeps every bit of the employee information in one place, making it easy to handle and accessible. Don’t postpone using tech tools to track and store employee data quickly and efficiently wherever possible. 

Also Read: Why you need a talent management software!

6. Encrypt All Employee Information

Data breaches resulting from cybercrimes can happen anytime, so it’s important to pay utmost attention to data security. 

While it’s standard for organizations to only encrypt sensitive information, a better approach would be encrypting the whole employee file. If you update employee records regularly, ensure the HR department and high-level managers know how to keep it safe.

7. Train HR Staff to Handle Data Securely

The HR team and managers with access to employee data should be trained regularly on applicable laws, the outcome of data breaching, and bad data management

If an employee resigns from the company, the managers need to be professionally prepared to prevent data leaks. Keep your team updated on the latest employment laws to ensure legal compliance on data storage.

Managing Employee Data Properly Is Serious Business

Employee data management facilitates strategic human resource management. 

When handling information about your employees, figure out the types of data your organization needs and use automation tools like Engagedly to collect, manage and analyze it for good purpose. Always keep data security and compliance with data laws top of mind, too. 

It’s better to be overly protective of your employees’ information than be casual. Use the tips above to effectively manage and protect your employee data.

This article is written by Rana Bano. She is a one-part B2B content writer and one-part content strategist. She uses these parts to help SaaS brands tell their story, aiming to encourage user engagement and drive traffic.

Kylee Stone

Kylee Stone supports the professional services team as a CX intern and psychology SME. She leverages her innate creativity with extensive background in psychology to support client experience and organizational functions. Kylee is completing her master’s degree in Industrial-Organizational psychology at the University of Missouri Science and Technology emphasizing in Applied workplace psychology and Statistical Methods.

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