The HR function is not immune from the challenge of global governance and this is something I am noticing more and more in my conversations with HR and Benefits reward leaders. They seem to be increasingly concerned regarding the security of their employee data.
Is global benefits governance keeping up?
This is a trend that is also supported in our Global Employee Benefits Watch research survey, which reveals that only 17% of US employers are very confident that their employee data is transferred securely*. This shocking statistic has resonated through many conversations I have had with large companies who hold a plethora of sensitive information on their employees - social security numbers, medical background, addresses and more. What is perhaps more surprising is that this information is often still being stored, updated and shared within and amongst global HR teams and their providers via manual-based reporting documents like Excel spreadsheets.
So what are the risks?
To be honest they are countless, but here are the main ones which should incentivize you to tackle this global governance challenge head on:
- Security Limitations – Spreadsheets are open by nature. They’re not encrypted and are incredibly vulnerable to outside access, especially when you have many people in an HR department who need to consistently open, edit, and share these documents. And they are not just sharing them internally – most large companies are sending these spreadsheets to multiple providers in different countries via email, with this personal information as an attachment. So, there is an added risk that the information is sent to the wrong person or is hacked en route to its intended destination.
- Unauthorized Access – When you’re collaborating on manual spreadsheets, it’s easy for an unauthorized person to get copied into the conversation or otherwise inadvertently sent a document that should require a passcode to view.
It isn’t only security risks that are exposed through this outdated approach.
Cracks in companies’ global governance systems leave room for error and cost mismanagement too:
- Typing Errors – Nearly 90% of spreadsheets contain errors that range from minor to severe, according to recent studies like this one – primarily because companies rely on manual data entry and customized formulas. When you’re talking about personal information from thousands of employees, this is an unmanageable rate.
- Versioning Mistakes – Global companies typically have an HR department or representative in several different regions around the world. This can easily lead to people working from the wrong document, updating it with irrelevant information, and more. The chances of this happening are only increasing with trends like BYOD, where employees might open a third party document to edit something on their own device
- Tracking Errors – These manual processes make it extremely difficult to manage accurate lists of eligible employees. It is very common with companies managing their benefits in this way to miss people off a health care plan, or continuing to pay into plans for employees who no longer work for the company.
Many HR teams are moving away from these manual processes for their benefits administration within certain countries. They also have prepared back-up plans and other security measures in the case of a breach. But the waters are a bit murkier when you look at the global picture: 55% of employers have a different approach to benefits governance in each country and what is remarkable is two thirds of these identify this as an ineffective operating model*.
Organizations should make sure that they are addressing these data issues and governance errors head on across all employees globally. All companies with an international employee base need to be thinking about a plan for greater data security and ensure their employee information is being kept safe. As we witnessed last year with Ashley Madison, security risks for data breaches can be highly disruptive.
For HR, data breaches can break employee trust. Companies need to come up with a plan to have robust global governance or they risk finding themselves on the defensive. To put it simply, why allow poor data security instantly undo the employee engagement achieved through a great benefits offering?
For more insight into global employee benefits trends and the findings from our recent Global Employee Benefits Watch 2016 research and to receive a copy of the report, register here.