How Companies Can Use Employee Data Responsibly

Executive Summary

In the wake of recent customer data breaches, companies are recognizing the need for more protections and transparency around the collection and use of customer data. But few have paid equal attention to the issues arising from the collection and mining of workplace data. A survey of more than 10,000 workers and 1400 C-level executives, in 13 countries and 13 industries, found that more than 90% of the employees are willing to let their employers collect and use data on them and their work, but only if they benefit in some way. And they harbor serious concerns about how companies might use the data. Perhaps for good reason: only 30% of the executives whose companies use workforce data reported being highly confident they are using the data responsibly. There’s a great deal at stake in misusing employees’ data, including lost revenue growth due to losing employee trust. So how can companies use workplace data in an effective, responsible, and ethical way? Three practices can help: give employees more control, create a system of checks and balances, and use data to elevate people rather than penalize them.

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In the wake of recent customer data breaches, companies are recognizing the need for more protections and transparency around the collection and use of customer data. But few have paid equal attention to the issues arising from the collection and mining of workplace data.

Companies have vast amounts of valuable data on work and their workforce, and executives recognize the opportunity to use this data to improve productivity and to motivate and engage people. But employees are skeptical.

We surveyed more than 10,000 workers, across all skill levels and generations, and 1400 C-level executives, in 13 countries and 13 industries. We found that more than 90% of the employees are willing to let their employers collect and use data on them and their work, but only if they benefit in some way. And they harbor serious concerns about how companies might use the data. Perhaps for good reason: only 30% of the executives whose companies use workforce data reported being highly confident they are using the data responsibly.

There’s a great deal at stake in misusing employees’ data. Our survey measured how employee trust increases or decreases in relation to 31 workforce data practices, and then we created an economic model to determine the effect of trust levels on revenue. We found that businesses risk losing 6% of current revenue growth if they lose the trust of their people. On the other side, higher trust, or a “trust dividend”, would be worth more than a 6% increase in revenue growth.

How can companies use workplace data in an effective, responsible, and ethical way? Our research suggests a framework of three key actions responsible leaders can take.

Give Employees More Control

Consumers have become highly conscious of how their personal data is used and misused. And they have been supported by new laws and regulations that give them more control over their data. But this isn’t the case in the workplace.

Protections of people’s work-related data are still years behind that of consumer-related data, and the governance of workforce data skews heavily toward the corporation. If leaders want access to valuable data, they will need to forge a new “give and get” relationship with employees and share more control with them over their own data.

For example, wall-mounted cameras track every person and asset at our client Schlumberger’s Center for Reliability & Efficiency in Denton, Texas, a facility that carries out maintenance and manufacturing of oilfield equipment. The video data is aggregated and anonymized, and AI analyzes patterns to improve productivity. The data is never used to monitor how individuals work, but anyone can opt-in privately to see their own performance data. This has its benefits: for example, the company drew on the data to grant workers more frequent but shorter breaks to combat productivity-sapping fatigue.

One step toward giving employees more control would be to create a single place where they can see, manage, and even delete the data their employer has collected about them. For instance, our client Telstra, Australia’s largest telecommunications company, maintains an internal site called MyCareer that allows workers to keep and update their own career data, and even challenge any incorrect or incomplete inputs.

Create a System of Checks and Balances

Governing the collection and use of massive quantities of sensitive data is fraught with risk. Companies need a system that builds in the right checks and balances.

Ideally, a C-level executive would be accountable for ensuring that workplace data and technologies are used in a responsible and ethical way. But less than 20% of the companies captured in our survey have a C-level executive in charge of this today, although another 48% reported having plans to change that soon. Some companies are even creating new roles, such as the chief ethics officer or chief data officer, to assume this responsibility.

But because the issues are so complex, the appointed leader must be supported by an executive-level coalition. That’s why JPMorgan Chase brings together three members of the C-suite—human resources, risk, and legal. As CHRO Robin Leopold told us, these leaders “come together to thoughtfully consider how we balance data insights for business benefit and respect for individuals’ privacy — looking through the lens of strategic business resiliency, risk and the ability to elevate our people.”

Getting employees involved in these efforts to better monitor workplace data and technology is also important. When employees are asked for their input into how systems are designed and used, companies can avoid doing unintended harm.

Use Data to Elevate People, Not Penalize Them

By using new technologies and the resulting data responsibly, companies can unlock the potential of their people and preempt fears of “digital determinism”—the idea that tech will determine social structures, cultural values, and one’s own experiences.

To uphold this responsibility, companies need to get creative. For example, AXA, a French multinational insurance firm we work with, has recently developed a virtual career assistant that uses AI algorithms to track the skills and interests of employees. It answers questions employees have about their careers, such as: Will a robot do my job? What other job options are there for me? What’s the best training for me? AXA is now working on an extension that will match a person’s values and traits with corporate culture to ensure employees are in the right work environment.

Companies can also use technology to track employee performance, both for good (to raise performance) or for ill (to penalize people). Many companies now track people—to see, for example, how fast they are working—and share real-time results on scorecards or in a live gaming format. But this can lead employees to feel that their every move is being watched. This real-time monitoring can raise worker stress, lower job satisfaction, and increase turnover.

But when the motivation is to help people get better at what they do, tracking employees can be beneficial. At Florida Hospital Celebration Health, nurses and patient-care technicians wear badges embedded with sensors, which track where they go during their shift, showing how often they visit patients’ rooms or the nurse’s station.  According to the organization, they haven’t used this data for punitive reasons, and the smart sensors have helped improve supply-stocking procedures and made nurses’ shifts more efficient and their jobs easier.

Companies must also use technology creatively to reduce bias in hiring and promotion. While algorithms can be biased too, smart machines can reduce subjectivity and help managers make fairer decisions. In speaking with industry experts, we learned about one multinational financial services company that used an AI-powered recruiting tool to increase female applicants for financial roles by 150% and female applicants for all positions by 39%. Candidates’ cognitive and social traits are measured as they play neuroscience-based games – providing leaders with the science-backed data predictive of performance to make better and less-biased hiring decisions.

Managing the Privacy-Performance Trade-off

The emergence of AI and other smart technologies in the workplace calls for trade-offs between privacy and performance. Data can unlock people’s potential and boost business performance, but these aren’t prizes worth having if they diminish fairness and trust. Leaders must ask themselves: Just because we can, does it always mean we should?

C-suite leaders have to put trust at the heart of business strategy, on equal footing with growth and profitability, as trust is the ultimate currency of the digital age.

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