Navigating GDPR, privacy and AI in HR
GDPR, privacy and AI
A guide for HR professionals
As an HR professional, you are navigating a rapidly evolving landscape where artificial intelligence (AI) is revolutionising the world, including HR functions.
While AI offers incredible opportunities for enhancing productivity, efficiency and decision-making, it also presents significant challenges regarding GDPR compliance and privacy.
This guide aims to equip you with the insights needed to balance innovation with the responsibility of protecting personal data.
The AI toolkit: Power meets responsibility
AI isn’t here to replace you; it’s designed to supercharge your productivity. From automating mundane tasks to providing data-driven insights, AI tools are changing how we work.
However, with great power comes great responsibility.
As you integrate AI into your operations, it's crucial to ensure that personal data is safeguarded.
“The greatest danger in times of turbulence is not the turbulence; it is to act with yesterday's logic.” — Peter Drucker
By adopting a proactive approach to data protection, you can position yourself as a trusted partner in your professional HR journey through this technological shift.
GDPR: Your competitive advantage
While GDPR may seem daunting, it represents an opportunity to build trust and establish yourself as an expert in your field. Here’s how:
Stand out: Many consultants or in-house HR professionals shy away from GDPR; by embracing it, you differentiate yourself in a crowded market.
Build trust: Clients and companies will view you as a guardian of their employees' data rather than just a service provider or keeper of compliance. In addition, a 2021 survey by Cisco found that 92% of consumers say they care about data privacy and 90% of businesses report that meeting data protection requirements benefits them
Reduce risk: By helping clients navigate GDPR, you protect them (and yourself) from hefty fines. According to a DLA Piper GDPR Data Breach Survey carried out in 2022, organisations across EU and UK have incurred fines of more than 1.7 billion Euro for non compliance.
“Not only does GDPR compliance help avoid fines, but research shows it also improves data quality and operational efficiency by up to 20% (PwC 2020). This means that for HR, adhering to GDPR principles when using AI tools can streamline workflows, enhance trust, and even boost talent acquisition.”
Ensuring GDPR compliance while leveraging AI
The UK GDPR outlines strict rules on handling personal data. For HR professionals utilising AI, it's crucial to adhere to all seven principles of GDPR:
Lawfulness, fairness, and transparency: Ensure AI systems process data legally, fairly, and in a transparent manner. Clearly communicate to employees how their data is used, especially when AI influences decision-making
Purpose limitation: Only use personal data for specified, explicit, and legitimate purposes. When implementing AI, define clear objectives and do not use data for incompatible purposes
Data minimization: Collect only the data you truly need. Review your AI tools to ensure they gather only necessary information, avoiding excessive data collection
Accuracy: Maintain accurate and up-to-date personal data. Regularly audit AI systems to correct or delete inaccurate information promptly
Storage limitation: Keep personal data only for as long as necessary. Implement data retention policies for AI-processed information, ensuring timely deletion
Integrity and confidentiality: Implement appropriate security measures to protect personal data against unauthorised access, loss, or destruction. This includes securing AI systems and their outputs
Accountability: Take responsibility for complying with GDPR and demonstrate this compliance. Document AI processes, conduct regular impact assessments, and be prepared to show how you meet GDPR requirements
A PwC report in 2020 indicates that companies that adopt GDPR compliant data practices report a 20% increase in data quality and 10-20% increase in operational efficiency due to streamlined data management.
For further guidance on AI and GDPR, you can visit the Information Commissioner's Office post on Artificial Intelligence
Key GDPR challenges with AI in human resources
AI introduces unique challenges regarding GDPR compliance:
Automated decision-making: Ensure individuals can contest AI-driven decisions and request human review.
Handling special category data: Implement stronger safeguards for sensitive information like health data.
Bias and discrimination: Regularly audit AI systems to prevent discriminatory practices.
Uploading sensitive data to LLMs: Avoid sharing personal or confidential details with large language models (LLMs) like ChatGPT, Perplexity, Claude or other models.
We would always recommend that you use different company names, or anonymise data.
Example GDPR challenge: Handling data minimisation with AI in recruitment
Scenario:
An HR department integrates an AI-driven recruitment tool designed to streamline the hiring process by scanning CVs and ranking candidates based on predefined criteria.
However, the tool begins collecting and analysing more data than necessary, for example social media activity and unrelated job history, potentially breaching GDPR’s data minimisation and purpose limitation principles.
Challenge:
Under GDPR, organisations must collect only the data necessary for specific purposes and avoid gathering excessive information. When using AI tools, this principle can be challenging to uphold, as some AI systems are designed to draw on a wide range of data to improve accuracy. In this scenario, the AI tool’s expansive data collection could inadvertently introduce risks, such as processing sensitive or irrelevant information or even introduce bias within your recruitment process.
Solution:
To address this, the HR team should configure the AI tool to limit data collection strictly to relevant information, such as job history and qualifications (if appropriate).
Practical steps: Balancing AI and GDPR
To successfully navigate the intersection of AI and GDPR, consider these practical steps:
Become a DPIA Master: Data Protection Impact Assessments (DPIAs) are essential for successful AI implementation. Create a DPIA template specifically for AI tools in HR.
Curate your AI toolkit: Not all AI tools are created equal regarding GDPR compliance. Research and compile a list of GDPR-friendly solutions. Even then, regularly check them for robustness.
Develop an "AI Ethics Checklist": Create a checklist for evaluating the ethical implications of your AI use, including questions about decision-making impacts on employees.
Offer an "AI-GDPR Audit" service as a HR consultant: Position yourself as an expert by reviewing clients' current AI tools for GDPR risks and offer an ongoing audit process.
Create employee-friendly AI policies: Draft clear policies on AI use that prioritise transparency under GDPR and include data minimisation and retention details.
Create an AI Ethics and Accountability Policy to establish ethical standards for AI use within your organisation, addressing transparency, fairness and accountability. It should include steps you have taken to address AI biases and ensure your AI decisions that impact employees are fair and explainable and have the opportunity of review by a real person.
Implement consent forms to obtain explicit permission from individuals when AI tools process their personal data. These must include outlining the purpose of data collection and provide transparency on how AI might influence the decisions that are made about them.
Consider either implementing or updating incident response and data breach management policies to define those protocols for responding to breaches, including those that may arise through AI or automated systems.
For guidance on AI ethics and policy, refer to the CIPD’s guidance which can be found here. You can also read their viewpoint here.
Stay ahead of the curve
The landscape of AI and GDPR is constantly evolving. To stay informed:
Follow key thought leaders on LinkedIn, such as Ann Bevitt for GDPR insights.
Set Google alerts for terms like “AI in HR” and “GDPR updates.”
Embrace AI; it’s here to stay!
Consider signing up for our newsletter for weekly actionable tips that keep you ahead of the curve.
Conclusion: future-proofing your HR career
Navigating the balance between AI and GDPR may feel overwhelming, but it’s essential for future-proofing your HR career.
Your next steps:
Assess Your Knowledge: Identify gaps in your understanding of AI and GDPR.
Pick ONE AI Tool: Dive deep into its capabilities while considering potential GDPR pitfalls.
Draft your first AI-GDPR Policy: Create a customisable template for clients, or consider reviewing your in-house GDPR policy in light of AI if you have not done so already.
The future of HR belongs to those who harness the power of AI while adeptly navigating data protection complexities.
GDPR compliance for AI in HR is something every HR professional must learn - do not leave it too late and get left catching up.
This article is for informational purposes only and does not replace formal legal advice.
You can find a full guide to the UK GDPR on the ICO’s website, here.
If you have additional tips on navigating GDPR and AI or specific topics you'd like us to cover in our upcoming series, please let us know in the comments!
This blog post has been written by Lorraine Hunt, a HR professional with 35 years experience in HR and L&D and extensive experience within GDPR. She has written courses on GDPR, and carried out many investigations concerning potential data breaches, completing Data Subject Access Requests. Now a passionate advocate for GDPR considerations within AI.
