Employee Data Management

Hayden Kroff
Hayden Kroff
Any HR professional will agree that they collect a lot of employee data. So how can you manage all that data efficiently? What tools can help you? Where should you get started? Employee data management encompasses all those questions – read on to learn more!

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What Is Employee Data Management?

Employee data management is the practice of collecting, organizing, and retaining employee data. As an HR professional, you know the amount of data you collect from employees is immense. From addresses and employment details to demographic data and medical information, sometimes the amount of data you collect can be overwhelming!

To keep from drowning in this sea of documents, you need a game plan. That’s what employee data management is all about – having a plan for how you collect data from employees, how you organize the data you’ve collected, and how you retain that data to ensure compliance with legal regulations.

Data management usually includes some combination of physical and electronic file management. While physical document storage can be simpler in some ways, the trend is to move to digital storage, which has a number of benefits. Digital data management is almost always more secure, more efficient, more sustainable, and easier to access. That said, physical files are still very common, and the transition to digital can be time-consuming.

Why It’s Important to Correctly Manage Employee Data

Correctly managing your employee data may not be the most exciting part of HR, but it is important. Here are some of the reasons why.

  • It saves time. Working out a smooth process to collect, store and retain employee data saves both HR and employees time. Knowing where you can access data in the future and filing it in as few steps as possible makes a big difference.
  • It helps you stay compliant. The government has requirements for how you manage employee data, especially government documents and sensitive information. Building these requirements into your data management process helps you stay compliant and gives you peace of mind.
  • It lets you do more impactful things. Employee data management is important but not impactful. It’s something that you need to do well, but it’s not where HR’s real value lies. Let’s be real . . . when’s the last time you heard someone say that what they love about their company is how well their employee data is managed?

Types of Data Stored in an Employee Data Management System

The kinds of data stored in an employee data management system vary, but most can be simplified into a few categories. Knowing which data falls in which category will show you how to organize it in a compliant and efficient way. Always, always, always pay attention to how you store any sensitive information.

Personnel Information

Think of personnel information as the basic employee file. It usually encompasses any non-sensitive information about an employee and their employment. Personnel information can include a resume, background check, promotion record, disciplinary action, termination documents, etc. This is the kind of information that employees and managers should be able to view when requested.

Payroll Information

Payroll information is usually sensitive payment information. As such, the sharing of this information should be more limited. Payroll information can include W-4s, W-2s, bank account information, government or lender requests for verification of employment, etc.

Medical Information

Medical information is usually easy to tell apart and should be separate from other employee information. The number of people who need access to an employee’s medical information is very small — rarely anyone other than HR and the employee. Medical employee data can include FMLA, ADA, parental leave, drug tests, etc.

Demographic Information

While demographic information might not always get its own file, this kind of information should be separate at least in your mind. By demographic information, we mean anything related to a person’s gender, age, race, ethnicity, veteran status, disability status, or any other protected class. This information should only be collected as needed. When it is collected, the number of people who should have access to it should remain small. If you are a government-contracted employer, you may have specific requirements to follow here.

Government Forms

Government forms, such as the I-9, FMLA, ADA, or Workers’ Compensation, should always be given special treatment. Usually, a government form has specific requirements for how the document should be collected, stored, and retained. Make sure you understand the regulations associated with each of these kinds of documents to avoid any fines or penalties.

How To Get Started with Employee Data Management

The best way to get started with employee data management is to do a sort of data audit — think of the first time you collect employee data and walk through each time data is collected. You’ll want to improve your process to make things as easy as possible for you and for the employees.

Step 1: Note Your Current Process

The first place to start is to write down each way you currently collect and store data. Write down whether the data is stored physically or digitally, as well as which type of data is stored. The easiest way to do this is to start with the first time you collect employee data (recruiting) and work through the employee lifecycle.

Step 2: Decide Which Data Should Go Where

Once you’ve taken note of which data you have, see if any adjustments need to be made. Do you have one kind of data collected across multiple systems? Do you have sensitive data in the same places as non-sensitive data? Do you have any data that is difficult to access?

Step 3: Improve How You Collect Data

Two pointers here. First, when it comes to managing data, the rule is to correct any problems at the source. So, if you find any incorrect or missing data, make sure to adjust how you collect the data to prevent the errors from happening again. Second, automation is always best for administrative tasks. Use all the tech tools you have to make the collection and storage of data in as few steps as possible for you and the employee.

Step 4: Conduct Regular Audits

For government documents especially, you’ll want to audit your employee data at least once a year. One common practice is to rotate internal (you do it yourself) and external (you pay someone to do it) audits every year. The longer you put off auditing your data, the more work will pile up for your next audit!

Employee Data Management Tools

HRIS

Your Human Resources Information System (HRIS) should be the main tool you use to collect and store employee data. In a perfect world, all employee information would be collected and stored in this one system, but rarely is that the case. You might toggle between two or more softwares, or even between softwares and physical files. Whenever possible, centralizing is best. When you can’t centralize data, do your best to keep the information in each software clean and easy to access.

Document Storage Software

If you don’t have an HRIS, or if your HRIS doesn’t have all the right capabilities, you might want to explore a document storage software. These softwares helps you store data securely and sometimes may even have other helpful features, such as scheduled deletion.

File Cabinet

Maybe one-day physical files will be totally done away with, but for now, they’re still common. If you decide physical document storage is best for your company, make sure to get a file cabinet that can lock and is disaster-proof. The same organizational ideas and practices apply to physical or electronic storage.

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Questions You’ve Asked Us About Employee Data Management

What should not be included in an employee database?
The main thing you would not want to include in your database is information you don’t plan on using. If you have no use for certain information, keeping it will only clutter up your database.
Hayden Kroff
Hayden Kroff

Hayden is drawn toward the Operations side of HR, always looking for ways to improve the employee experience. His background in Sociology helps him think of the big picture and challenge the way things are done. He also specializes in using data & analytics to make changes.

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