Employee Data Management: Benefits, Roles, and Process

Your employees can be one of your greatest strengths. But to use that strength to its full potential, you need to use data to your advantage. The ever-growing data ecosystem—and the volume of information at our fingertips—can make this challenging. 

You gather more information day after day. Before you know it, chaos ensues and your data is unreliable. Employee data management helps you keep information organized, up-to-date, accessible, and reliable. Here’s everything you need to know about it.

What is employee data management?

Employee data management means collecting, organizing, and storing employee data. The bigger the company, the more employee data you have. From addresses and other demographic details to performance reviews and exit interviews, the volume of data adds up quickly.

Human error is a common data management challenge. There’s missing information on one side and duplicates or outdated entries on another. Employee data management helps you make sense of the chaos, giving you a structured way of collecting and organizing your data. 

With it, you can avoid common issues like incorrect or missing data, and you can store everything in a format that will be easy to access and use for people analytics. Employee data management in HR is essential for companies that want to switch to a data-driven model, make informed decisions, and reach business goals faster.

5 benefits of employee data management

Employee data management helps you make sense of one of your most valuable assets—data. 

Some benefits include:

• It saves time. Once implemented, employee data management can speed up processes like data collection, storage, and analysis.

• It shows you a complete view of your workforce. Your workforce is more than a headcount. With employee data management, you can understand who your employees are, how well they perform, how long they have been in their current position, and more.

• It helps you stay compliant. Data privacy regulations are becoming more stricter all over the world. Without effective data management, you’re at risk of experiencing data breaches or violating regulations.

• It helps you identify workforce trends. Employee data management helps you spot positive and negative trends within your workforce. You might notice most employees leave after two years or that engagement decreases after one year. You can then use these observations to understand what drives the changes and take steps to improve these trends.

• It boosts efficiency. When you don’t have to waste hours or even days figuring out where the data you need is or if it’s even correct, you can focus on more important business processes. Plus, if you automate things like data collection and storage, you free up more time to focus on more impactful things in your company.

Employee data management roles and responsibilities

Employee data management should never be a one-person job. Several stakeholders and team members should be involved, from multiple departments.

1. Data and HRIS teams

Data and HRIS (Human Resources Information Systems) teams are instrumental in managing employee-related information within an organization. These teams are instrumental in collecting, organizing, and analyzing vast amounts of employee data, ensuring its accuracy, and preparing it for analysis. They implement and maintain the technology systems used to store and manage all of this data efficiently and securely.

2. The HR team

HR is the department that works with employee data most often, so they’ll be the most involved in the data management process. Key roles include:

• HR specialist. Depending on the size of the company, you may need several people in this role. They’ll ensure data accuracy and confidentiality and may also update employee records and ensure a transparent collection of data.

• Employee relations specialist. This is the person who will handle any concerns employees may have related to data privacy. They’ll also help communicate HR policies and maintain a positive work environment.

3. Compliance officer

You can’t think of personal data without considering regulatory compliance. A compliance officer will ensure all HR practices align with privacy regulations. They will oversee collection and storage practices, prioritizing employees’ rights. 

4. Security officer

Data privacy and compliance go hand in hand with data security. That’s where the security officer comes in, ensuring there are sufficient measures in place to prevent a data breach. They may also check access rights and other security protocols.

5. Training manager

The training manager will help train HR and other relevant staff about data management best practices. They may also collaborate with the compliance and security officer respectively to help employees understand privacy and security protocols.

6 employee data management best practices

Employee data management is an essential process for any business. But using it might feel challenging at first. Here are some best practices that will help you get started on your journey.

1. Assess the data you have. Before you can think of collection, storage, and analysis, you need to identify the data you have. What type of data do you collect? How and when do you collect it? Where is it stored?

2. Set your goals. Knowing your goals will help you gain clarity about what type of data you should focus on. Make them realistic and measurable to help you keep track of your progress.

3. Categorize data. Knowing your data and your goals are the first steps. But for effective data management, you need to take it one step further and create data segments or categories. These will help you save time by accessing the right data faster.

4. Restrict access. Employee data is personal and often sensitive. Restricting who has access to it is a necessary security measure for your employees’ safety and compliance with privacy regulations.

5. Choose a data management tool. Employee data management is not a task you should carry out manually. Find a tool that automates the repetitive processes, helping you avoid common human errors.

6. Train employees. Offer extensive training to those who will work directly with data. Help them learn how to use the tools, but also the best practices for handling data and staying compliant.

The employee data management process 

The employee data management process will look different from company to company. Many variables come into play, such as how much data you have, your goals, your tools, and your analytics practices. There are, however, a few steps that you’ll encounter in most employee data management processes.

1. Audit your current data management techniques

Before creating a new process, you must look at your current one. 

• How are you collecting data? 

• Where are you storing it? 

• Can you notice any areas that are giving you a hard time, where mistakes are happening, or where you waste a lot of time? 

Getting a benchmark of where you are currently, and where the challenges lie, will help you identify improvement opportunities.

2. Assess and categorize all your data

Understanding the type of HR data you use is important both for regulatory compliance but also for your internal processes. Common types include:

• Personnel information you’ll commonly find in an employee file

• Medical information including drug tests, parental leave, and other things related to an employee’s work

• Payroll information, which usually includes sensitive information related to payment

• Demographic data, such as addresses and other relevant information

• Job-related skills

• Training and other learning and development programs a person was involved in

• Data related to employee performance

3. Improve data collection and storage practices

If you gave little thought to employee data management until now, chances are your collection and storage practices have room for improvement. Look back to step one to find the areas most prone to mistakes or where the process feels too slow. 

See what you can automate and what needs to remain a manual operation. Most companies will automate the data collection process, but activities like pre-processing, organizing, and storing can also be fully or partly automated.

4. Conduct regular audits

No matter how good your process is, mistakes can happen. Conducting regular audits will ensure everything works correctly, and that the quality of the data is the best. Look at your goals and various other HR metrics and KPIs to see if everything works as expected. 

What to look for in an employee data management system

Selecting an employee data management system (EDMS) depends a lot on your goals and your current systems. Your system should have a few things if you want the best results.

• Scalability. Expect the amount of data to grow in time, so select a tool that allows room for growth without compromising efficiency.

• Integrations. You need the ability to integrate all of your employee data into one system. Bonus points if you can integrate business data and other HR and people data into it, too.

• User access control. Unless you can restrict who has access to data, you’re at an increased risk of a data breach. Select a tool that allows you to set various roles and responsibilities, choosing who has access to which data.

• Data security. You’ll need to implement various security measures such as encryption, so find a tool that has data security capabilities.

• Compliance features. More and more employee data management systems come with integrated compliance features with various privacy regulations. They won’t solve all your issues in this department, but they can significantly reduce your workload.

• Data backup and recovery. Mistakes can happen. A system that has automatic backup and recovery will ensure you won’t lose your data in case of a system failure or other unpredictable events.

Employee data management is the first step towards making more data-informed decisions. It will help you analyze data, understand what drives your employees, and how you can improve performance and productivity, and reach business goals.

On the Outsmart blog, we write about workforce-related topics like what makes a good manager, how to reduce employee turnover, and reskilling employees. We also report on trending topics like artificial intelligence, using generative AI in HR, and how skills are rapidly evolving, and advise on HR best practices like how to create a strategic compensation strategy, how to manage HR data, and how to use reports vs. analytics. But if you really want to know the bread and butter of Visier, read our post about the benefits of people analytics.