Since the start of the pandemic, employee turnover has persisted at all-time highs, both voluntary, from “the Great Resignation” and involuntary, as many businesses re-examine operations in the light of economic headwinds. Regardless of the source of turnover, a fluctuating workforce has an impact on corporate risk, compliance, data protection and investigations.
Addressing these new and escalating risks is equally as business-critical as improving recruitment and retention practices to attract and keep employees, because when an employee leaves, the departure may (intentionally and inadvertently) trigger a series of possible problems relating to intellectual property (IP) loss, sensitive data protection and other legal and regulatory issues. This is not a new corporate challenge, but in the midst of millions of Americans leaving or losing their jobs, the potential ramifications on digital risk may be far greater than anyone could have anticipated.
Major crisis events, such as political uprisings or financial downturns, are typically followed by an increase in fraud in the business sector and heightened risk to corporate IP and other sensitive information. Anecdotally, this seems to be proving out again in the recent and ongoing fallout from the pandemic. Even before the Great Resignation movement, corporations across the globe were reporting increases in suspicious activity, data leakage, IP theft and other data risks stemming from departing employees and remote workers. For example, in FTI Consulting’s Resilience Barometer survey, 81% of executives at large corporations across the G20 agreed there is growing concern that financial systems are being exploited and more than 80% said they expect their organization will encounter an investigation, relating to fraud or other legal and regulatory issues, in the coming year. More than one-quarter surveyed have experienced a loss of IP in the last year.
As workforce, economic and geopolitical turbulence persists, data risk implications are likely to be compounded. The reason for this is twofold. First is that corporate data now holds unparalleled value, and this value is spread across a vast and complicated IT environment in which IP, trade secrets and other sensitive information resides in countless collaboration applications, documents from cloud-based file shares, audio and video files, data from personal devices and more. Sensitive company information is also now increasingly co-mingled with employees’ personal communications and files due to remote work.
My team has experienced numerous recent cases in which sensitive company files or evidence in scope in an investigation have been found in personal accounts and devices not managed by the organization. With data volumes growing rapidly and corporate data being scattered out in the wild, it is difficult for organizations to protect their sensitive information, access it when an investigation arises and pull it back to remediate losses when they occur.
The second layer on top of these data challenges as they relate to employee departures is that departing employees often take data with them when they leave. According to research, employees are 85% more likely to leak sensitive files than they were a year ago, and 63% of those who admit to taking company data when they leave are repeat offenders. Some steal company data or IP knowingly, either with the intent of gaining competitive advantage in a new position or because they believe they have a personal right of ownership over files such as contact lists or project plans. Others take it accidentally when they forget about company files that were stored on a personal device or in the process of retrieving personal files that were stored on their work computer.
Employees who are on their way out may also be more likely to engage in fraudulent or other illicit activities, either because they are disgruntled or believe they have an opportunity for personal gain free of consequences. These behaviors can spur several problems down the road for an organization, including potential regulatory penalties and roadblocks in investigations. In any case, corporate data is more exposed when employees leave in large numbers. And the current workforce trends are prompting increases in the incidence of investigations into sensitive data loss as well as increased practical complexities in recovering leaked information and conducting investigations (for example, in the Resilience Barometer, 31% of respondents said they are already experiencing difficulty conducting investigations due to remote work environments). To adequately respond, organizations will need to address several key areas, including governance procedures to prevent data loss, monitoring for suspicious activity and updating their investigations methodologies.
In terms of monitoring for suspicious activity that may occur in tandem with employee departures, AI offers some solutions. Behavioral analytics and sentiment analysis tools are now on the cusp of bringing legal, compliance and investigatory teams closer to real-time and in-situ fact finding and risk mitigation. These emerging capabilities can help organizations proactively detect and flag potentially problematic behavior across numerous systems before data is lost or a sweeping investigation is needed.
Of course, there will be instances in which governance and monitoring aren’t enough, and employees still leave with critical information. When this happens, an investigation may become necessary. Legal and compliance teams can get ahead of this by ensuring their organization’s investigations methodology is ready for an increased load. Again, strong information governance programs — particularly those that include acceptable use policies, access controls, standardized legal hold processes and mobile device management—will make a significant difference in the efficacy and efficiency with which investigators can identify and preserve key information. Processes should also include the use of advanced analytics tools and the support of experts who understand how to leverage technology in a way that uncovers key information quickly, even when the matter involves searching across large, complex datasets.
Organizations are operating under extreme, unprecedented pressure that is not showing signs of abating, even as normalcy has rebalanced. In turn, the scope of insider risk, IP loss and the nature and volume of investigations will continue to undergo prolonged and pivotal shifts. Legal and compliance teams must try to resist burnout and remain vigilant about how the current state and ongoing remote work will continue to influence their risk position. Allocating resources to stay in front of problematic behaviors and ensure investigations processes are equipped with the right people and technology are important mitigating steps that can be taken now, in anticipation of another uncertain and turbulent year ahead.
Veeral Gosalia is a Senior Managing Director in FTI Consulting’s Technology segment. Mr. Gosalia’s areas of expertise include data preservation, data analysis, computer forensics and e-discovery. He has assisted attorneys and corporations in understanding the issues surrounding electronic evidence — including the acquisition, analysis and production of data.
The views expressed herein are those of the author(s) and not necessarily the views of FTI Consulting, its management, its subsidiaries, its affiliates, or its other professionals.