Siloed data and compliance risks

The compliance risks of siloed data

Siloed data occurs when information is stored across separate systems that don’t communicate efficiently. For HR, this typically means employee data is scattered across platforms like payroll, performance management, and recruitment tools. Without integration, this fragmentation creates serious compliance risks. 

GDPR compliance risks
Siloed data makes it hard to maintain a clear view of where personal data resides, increasing the risk of GDPR breaches. Sensitive employee data could be mishandled or shared through insecure channels like email. Furthermore, updates to employee records during onboarding or off-boarding may not be handled correctly without integrated systems, risking non-compliance and damaging organisational trust and reputation.

ESG reporting challenges
ESG reporting requires detailed data on workforce diversity, employee engagement, and workplace safety. Siloed systems complicate the process, as diversity metrics may be stored separately from recruitment or performance data. This fragmentation can lead to inaccuracies in ESG reports, carrying legal and reputational risks. 

Increased risk of errors and inconsistencies
Manually reconciling data from different sources due to silos increases the likelihood of errors. These inconsistencies make it difficult to prove compliance during audits, potentially resulting in fines or legal issues, and harming stakeholder trust. 

Resolving challenges through data integration

The risks posed by siloed data can be mitigated through automation and data integration, which connects disparate HR systems into a unified framework. This centralisation improves data accuracy, reduces compliance risks, and simplifies both necessary compliance reporting and day-to-day regular reporting requirements. 

Centralising data for compliance
Integrating HR systems allows for seamless data flow, offering a complete view of employee information. This enables HR with less effort to report accurately, ensuring compliance with GDPR and other regulations. For example, integrating payroll and appraisal systems reduces errors, making compliance checks smoother. 

Simplifying GDPR compliance
Integrated systems make GDPR compliance more manageable by centralising data control. This ensures personal data is handled appropriately, such as automated data retention policies for timely deletion or anonymisation. Thus, minimising the risk of GDPR violations. 

Enhancing ESG reporting
Data integration simplifies ESG reporting by providing a comprehensive view of critical metrics like workforce diversity. Breaking down data silos allows organisations to compile accurate ESG reports, making commitment to social responsibility and improving reputation with stakeholders easier. 

Reducing manual work and human errors through automation

Automation complements data integration by reducing the need for manual processes, which are prone to human error. Automated systems streamline tasks like data entry and reporting, improving efficiency and accuracy. 

Automating data entry and reporting
Automation pulls data from integrated sources, ensuring accuracy across systems. This saves time and reduces errors, allowing HR professionals to focus on strategic tasks rather than administrative work. 

Streamlining compliance audits
Automation simplifies audit preparation by generating reports from integrated systems, reducing the workload and stress associated with audits. These systems can also flag potential compliance issues, enabling HR to address them proactively. 

Reducing the risk of human errors
Automation minimises the risks inherent in manual data reconciliation. For instance, an automated payroll system integrated with HRIS (HR Information Systems) ensures updates are accurate and compliant, reducing the likelihood of errors.