More companies than ever are using workforce data to analyze, predict, and improve performance. But as organizations start to use people analytics in earnest, new risks are also taking shape.
People analytics has been advancing steadily over the past few years, and today it appears to have hit the mainstream. Eighty-four percent of respondents to Deloitte’s 2018 Global Human Capital Trends survey now view it as important or very important to their organizations, making it the second-highest-ranked trend this year.1
Sixty-nine percent of surveyed organizations are building integrated systems to use worker-related data to analyze, predict, and improve organizational performance; 17 percent have real-time dashboards in place to crunch the avalanche of numbers in new and useful ways.
Leading organizations are mining a rich variety of sources to create a comprehensive architecture for listening to employees, thereby providing new insights about the entire employee experience, job progression, career mobility, and performance.
But while such tools offer tremendous opportunities, there are also significant potential risks. The European Union’s new General Data Protection Regulation (GDPR), for one, can make the mere existence of people data in a company’s systems a risk.
Organizations are approaching a tipping point in their use of this data; those that tilt too far could suffer severe employee, customer, and public backlash, with the potential for lasting brand damage.
Risks New and Old
This year’s Global Human Capital Trends survey yields some important insights about the data-related risks facing organizations today.
For instance, 64 percent of respondents report they are actively managing legal liability related to their organizations’ people data; six out of 10 say they are concerned about employee perceptions of how their data is being used.
But only a quarter report their organizations are managing the impact of these risks on their consumer brand.
Fears over employee privacy appear to be justified. One employer, for instance, installed body heat detectors at desks to track how many hours people spent in the office.
Employees reacted with outrage, swamping managers with complaints and leaking unflattering stories to the media. Many employees also fear sensitive data may be vulnerable to high-profile cyberattacks—again with good reason.
While 75 percent of surveyed companies understand the need for data security, only 22 percent report having excellent safeguards in place to keep employee data safe.
Other types of risk are more insidious. For example, some experts worry algorithms and machine-based decisions could perpetuate bias due to flaws in the underlying data or the algorithm itself.
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