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Data Retention Policy Best Practices

Data is the lifeblood of countless organizations. Whether you focus on healthcare, hospitality, tax processing, communications, education, or retail, the security and privacy of the information you store, manage, and transmit is of paramount importance.

However, the best practices that underlie robust retention of this resource can be vague and confusing. Take some time to learn about data retention policy guidelines, and your company will reap the benefits.

Data Retention Best Practices Explained

As organizations contend with the question of what is data retention and the nature of the best practices surrounding it, several priorities become clear. As you work to develop a data retention plan, keep the following essentials in mind:

  • Identify and label. You cannot possibly comply with standards such as HIPAA, GDPR, or SOC 2 without first understanding the nature of the information you hold. Take time to scrutinize every aspect of your organization to specify all of the information over which you have stewardship. Then label and categorize it in order to be in compliance with international, federal, and state regulations, industry standards, and internal requirements that mandate protocols for how information is handled as well as the time period involved.
  • Be sure that you institute a data retention policy that takes all relevant legal requirements into consideration. These days, organizations seem to be awash in rules and regulations that can put their management teams into quite a quandary. How, for instance, should a company comply with separate mandates that appear to contradict each other? When questions about the law or other regulatory issues arise, your best resources are generally internal or third-party compliance specialists.

These professionals are well-versed in the intricacies of policies and legal requirements and can assist you in determining what is required of your business when it comes to compliance. Although access to these resources amounts to a financial investment, the credible information you gain and the non-compliance risks you mitigate will generally make it worthwhile.

  • Only retain data for as long as the law and the necessity of use dictate. Although it is tempting to hold onto customer information indefinitely in the belief that doing so safeguards your company in some way, the opposite is actually the case. Data retention policy best practices suggest that you delete this information as soon as the law allows and you no longer need it.

Doing so lowers the likelihood of data breach, helps to declutter your hardware and software for current data priorities, and makes complying with internal and external assessments more streamlined.

Steps to Implementing an Information Retention Policy

Regardless of your company’s location or the industry-specific regulations and conditions under which you operate, there are several steps that any enterprise can take in formulating a robust data retention policy. These include the following:

  • Recruit a diverse team of staff and partners. These should include accounting professionals, legal counsel, stakeholders such as managers and supervisors, and people who are involved in the generation, reception, or management of financial reports.
  • With the help of your legal and accounting experts, determine which regulations apply to your company. Examples of what may affect your business are the U.S. Internal Revenue Service, the Health Insurance Portability and Accountability Act (HIPAA) for healthcare companies, the Sarbanes-Oxley Act for financial organizations, and the EU’s General Data Protection Regulation (GDPR) for any company doing business with residents of any states in the European Union.
  • Determine the data be covered by your data retention policy best practices. In addition to other special types of information, you will want to be sure to include categories such as contracts, spreadsheets, electronic data, customer personal information, correspondence, employee data, sales and invoicing records, tax data, and any other information that you store or produce during the course of your regular business activities.
  • Write your data retention policy, with emphasis on the following: a statement of purpose, a description of the regulations and laws that apply to it, a schedule of how long data is retained and when it is deleted, a strategy to deal with litigation and a time frame that determines when the plan will be reviewed. This is particularly helpful when audit time rolls around.
  • Make all affected employees aware of your data retention policies. If workers and end-users are not informed about their role in your data management program, they cannot participate in upholding the standards you are setting.

Your company cannot function without data. When crucial internal records and customer information is stored and disposed of in a responsible way, your enterprise can remain in compliance with the dizzying array of rules and regulations that seek to protect it. If your data retention best practices could use a second look, there is no time like the present to shore up your company’s security and compliance stature.