Don’t forget the ‘H’ in HR: Ethics & People Analytics – Part One

By David Green

Ethics is the most critical ingredient in people analytics. Those working in the field simply cannot afford to get it wrong. The risk to employee trust and to the reputation of the burgeoning discipline of people analytics is too high.

Ethics jeopardises four out of every five people analytics projects

Research in November 2017 from Insight222 found that 81% of HR people analytics leaders and practitioners reported that their people analytics projects were jeopardised by ethical or privacy concerns (Figure 1).

Figure 1: 81% of people analytics projects are jeopardised by ethics and privacy concerns (Source: Insight222)

WHY IS ETHICS SUCH A SIGNIFICANT CHALLENGE?

The challenge ethics presents to people analytics leaders is set to get harder, and not just in the short-term as companies seek to comply with the European Union’s General Data Protection Regulations (GDPR), which comes into effect in May 2018.

Whilst the requirement to comply with GDPR is undoubtedly high on the agenda for HR (the same Insight222 study found that 53% of companies had not even started getting ready for GDPR), a number of other factors are in play:

LEGISLATION & VALUES

People analytics teams have to navigate different rules and values with regards to data privacy and usage in the countries that they operate. In certain countries, particularly in Europe, people analytics leaders need to work with local HR teams to seek and receive agreement from workers councils and employee representative groups.

A recent example is the negative press surrounding the announcement that Amazon has been awarded patents to develop wireless wristbands for warehouse workers. A series of media outlets queued up to lambast Amazon, conjuring up images up Big Brother to support their argument that this represented a further erosion of worker rights. This prompted Amazon to counter that the wristbands will support employee wellbeing as well as improving productivity.

Vendors also have a responsibility here and it is refreshing to see CEOs of people analytics technology firms such as Ben Waber of Humanyze (check out Ben’s podcast with John Sumser) and Manish Goel of TrustSphere (listen to Manish speaking to Al Adamsen on the PAFOW podcast) playing a prominent and proactive role in the ethics debate.

TECHNOLOGY OUTPACES LEGISLATION & DESIRE

Even with the advent of legislation like GDPR, the law simply cannot keep up with the magnitude and increasing pace of technological advance. Figure 2, which is taken from Deloitte’s 2017 Global Human Capital Trends, provides a perfect illustration of the extent of the challenge. This is exacerbated by the fact that technology also outstrips desire.

Employees increasingly expect a similar experience at work as they do as consumers in areas such as personalised recommendations and the ability to give and receive feedback. In contrast however, employees are typically less prepared to share the data that enables this ‘consumerisation’ with their employers than they do outside work with the likes of Facebook (although the recent revelations about Cambridge Analytica may change a few minds there.

Figure 2: Technology outpaces legislation and desire (Source: 2017 Global Human Capital Trends Report, Deloitte University Press)

THE RISK OF GETTING IT WRONG

Judging what is acceptable and what is not presents a huge dilemma for HR professionals and people analytics teams. The challenge is as much moral as it is legal. People analytics is about people after all and the risk of getting it wrong and eroding employee trust, perhaps irreversibly, means that ethics needs to be front and centre of any people analytics initiative.

WHAT SHOULD HR DO IN THE ‘GREY AREAS’ NOT COVERED BY LEGISLATION?

What analytics teams in HR could and should do with people data are two entirely different questions. The reality is that we are at an inflexion point where the delta between what is possible with technology and what is covered by legislation is widening. As such, a nagging question for people analytics leaders is what to do in those situations – or ‘grey areas’ – not adequately covered by legislation.

To find out what companies can do to inform their decisions on how to use employee data, the IBM Smarter Workforce Institute surveyed more than 20,000 workers in 44 countries about their preferences regarding how data dilemmas are resolved in people analytics. The Institute clustered countries according to national preferences on how decisions regarding usage of workers’ data are made.

CONTEXT & CULTURE MATTER

The results show that within the grey areas, where legal precedent does not exist, or where data ownership is unclear, context and culture matter most. There are important differences between cultures that may impact employees’ receptiveness to having their personal data analysed for people analytics. Even when examining countries in the same continent, the Institute sometimes observed differing dominant ideologies.

The research discovered most countries have dominant ethical ideologies (with 77% falling into the Absolutist ‘I believe the rules are the rules’ type – see Figure 3 below). This infers companies and people analytics practitioners can look to the regions where their business operates to gain a better understanding of how employees might react to an initiative to collect and analyse a new source of people data.

Figure 3: In the Grey Areas, Context and Culture Matter (Source: The Grey Area – Ethical Dilemmas In HR Analytics, IBM Smarter Workforce Institute)

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In the next post we will focus on the recommendations for HR, how to best tackle this sensitive challenge.

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About the Author:

David Green, People Analytics Leader, Board advisor: Insight222/TrustSphere, CEO: Zandel/davidrgreen.com

David is a globally recognised and respected influencer, speaker and writer on people analytics, data-driven HR and the future of work. He has spoken at and/or chaired conferences in 25+ cities around the globe over the last 18 months including Sydney, London, Paris, Singapore, New York, San Francisco, Moscow, Las Vegas, Helsinki, Amsterdam, Lisbon and Berlin. Additionally, David also works closely with people analytics and senior HR leaders throughout the world. In combination, this imbues David with a unique perspective and insight into what’s working, what’s not, and what’s forthcoming in the field of people analytics.

David has received a number of industry accolades including winning Best Writer at the HR Tech Writers’ Awards, being included as one of 10 Power Profiles for HR by LinkedIn and is regularly included in influencer lists on people analytics, HR and the future of work. David is chairing, speaking and/or attending the following conferences between now and the end of October 2018. If you are going to one of these conferences and would like to meet up with David or you would like to book him to speak at a conference, please contact David via LinkedIn or by email on green.dr@gmail.com