Reasons why the organization needs to collect HR data


Your Organisation has a new HR Director.  You have been requested to review the organisation’s approach to collecting, storing and using HR data and produce a statement on your findings.

The HR Director has asked you to cover the following:

  • 2 reasons why the organisation needs to collect HR data
  • 2 types of data that is collected within the organisation and how each supports HR practices
  • A description of 2 methods of storing records and the benefits of each

2 essential items of legislation relating to the recording, storage and accessibility of HR data (You may refer to European law or your local law requirements.)


Reasons why the organization needs to collect HR data

            The organization must collect, store and ensure that HR data is kept safely. There are a number of reasons why the organization should collect HR data. First, legal requirements ensure that organizations collect HR data for record keeping (Ramsey, 2007). The organization is mandated to collect HR data in order to prove that its hiring practices conform to outlined employment laws and regulations in the country. The organization must keep certain data such as passports to show that the employees are eligible to work. The organization should ensure that HR data is kept confidentially to avoid misuse. Organizations must thus secure data in a safe manner to avoid misuse.

            The organization also needs to collect HR data for administration data. The organization must store data concerning the employees in order to effectively run the payroll system. For instance, data collected enables the organization to plan for replacement of employees leaving the organization. The organization is also able to plan for the total wage bill while having the right HR data. Other administrative issues include performance appraisals, transfers, and performance of various employees in the organization.

Types of data collected within the organization

            The type of data collected by the organization varies depending on the organization, its priorities and nature of the industry. The first type of data collected is absence data. This involves collecting data about the total number of days an employee has worked, and the total number of days the employee has been away. Absence data supports HR practices by informing the department about the number of employees working in the organization. It enables the HR function to plan for holidays, leave days, and other leave requests by the employees. For instance, thee HR function is able to avoid a backlog of leave request by employees, and at the same time plan for employee leave in such a way that the organization does not become understaffed by too many employees taking their leave at the same period (Wang, 2007).

            The second type of data collected is recruitment data. This involves collecting data about the number, qualifications and other relevant details concerning employees being hired. Recruitment data enables the HR function to establish the best channels which can be used to hire employees. It also enables the HR function to establish the employee retention rates and plan in advance for new recruits when a high number of employees leave the organization.

Methods of storing records

            There are two main methods of storing records in organizations; manual record keeping and electronic record keeping. Manual record keeping involves the use of paper files to manually store documents. Records are arranged in folders and safely locked in filing cabinets. Documents of this nature are often arranged in alphabetical order to facilitate easy retrieval. Some organizations run parallel systems whereby the information on documents is also recorded on computers. There are a number of benefits with this method of storing records. First, it is cheap to set up. Second, it is an easy process that does not require knowledge of any computer system. Third, the risk of data loss is significantly low. Lastly, the problem of duplicate copies of documents is avoided.

            Majority of organizations prefer storing records electronically. In this system, documents are scanned and kept in electronic form for future retrieval. Most of the work is carried out on the organizations’ computer system which automatically saves data in secure databases. The organization must ensure that only authorized persons can access the data (Wang, 2007). This is achieved by putting up physical barriers the computer systems and providing passwords. This method is highly efficient as it saves on time and space needed in storing transactions. It is possible to back up records and keep them in safe places where there is no risk of fire or water. Lastly, the method is automatic and hence easy and cost saving.

Essential items of legislation relating to recording, storage and accessibility of HR data

            Organizations are required to handle employee data carefully as per the legal requirements outlined by the European law. The Data Protection Act of 1998 outlines specific guidelines which employers must observe while handling client data. According to the act, organizations are required to use employee data in a responsible and accountable manner (Ramsey, 2007). Individual employee data should be kept confidential at all times. Second, employee data should only be accessed when there is a clearly outlined purpose for doing so. Even then, accessing the data should only be for the reasons established and not for any other purposes.


Ramsey, V. (2007). Construction law handbook. London: Thomas Telford.

Wang, J. (2007). Data warehousing and mining: Concepts, methodologies, tools, and        applications. Hershey: Igi Online.

Purpose and process of performance reviews