With the growing amount of data collected by various industries and organizations, it makes sense for business owners to want to create and enforce a robust data retention policy. Data retention policy allows organizations to manage the way they handle personal information. This includes tracking how long a set of data must be kept and how to delete the data when it's no longer needed.

Data retention policy outlines the purpose of processing personal information. It stores and organizes data for optimal operational efficiency and disposes of data no longer required. You can also use data retention to achieve compliance with data retention regulations and privacy laws.

Reason to Create a Business Data Retention Policy

Compliance: The local, state, federal, and international laws and regulations are specific about the type of data businesses and organizations must retain. Industry guidelines also determine how long particular types of data must be maintained and how the data is stored. Failure to comply with these laws and destroy documents before the specified retention period can lead to penalties.

Efficiency: Over-saving data or destroying it too soon can be problematic. A data retention policy details how to organize data for storage, record-keeping, and retrieval, making it easier to locate and retrieve files. The policy also flags expiry data and how the file will be destroyed.

Clears duplicated and outdated data: Keeping duplicate and outdated data not only fills up space but also increases storage costs. Creating a data retention policy allows you to determine this kind of data and clear them from your systems. A data retention policy also acts as a guide for when certain documents can be destroyed due to electronic or physical space constraints.

How to Create a Data Retention Policy

Before you embark on creating a data retention policy, you'll need to do thorough research on policies, regulations, and other aspects applicable to all data categories. Here are some simple steps to help you create a smart, compliant, and useful policy.

Build a Team

A lot goes into creating a data retention policy; you might not be able to do everything alone. You need an outside counsel to identify the legal requirements and advise how they apply to your organization. You'll need accounting team to help with bookkeeping and accounting sti]yff. You’ll also need members from various business functions (like IT, departmental business owners, etc.), to offer input and ensure successful implementation. So, your first step should be to determine the people who need to contribute to the data retention policy and bring them on board.

Determine the Regulatory Requirements that Apply to your Business

The regulatory requirements that apply to your business will influence how you classify, protect, and retain data. Once you have your team in place, your next step should be to determine your requirements. Come up with a thorough list of rules that apply to your business, considering the retention nuances on state, federal, and international levels. You can then analyze and prioritize the data that's subject to regulation. Here are a few examples of regulatory bodies and acts that define data retention durations and conditions of data removal:

• Health Insurance Portability and Accountability Act (HIPAA) for healthcare and related industries
• Sarbanes-Oxley Act (SOX) for financial-related sectors
• Children's Online Privacy Protection Act (COPPA) for all businesses in the US
• Internal Revenue Service (IRS) for all companies in the US
• General Data Protection Regulation (GDPR) for businesses serving clients in any of the 28 EU member states

Run a Data Audit

Data audit is where you analyze your data to determine whether it fits the specified purpose. It includes parsing all types of files, including customer records, emails, receipts, spreadsheets, images, contacts, videos, online followers, tax documents, patient data, shopping data, and so on. You can then find out where these data are being stored, the people who have access to it, who needs access to it, how often the information is accessed and used, and how it's used. This will help you define data according to your company's value.

Compose the Policy

Now that you have the team, data, and regulations handy, you can go right ahead and create your business data retention policy. One thing that you'll need to keep in mind while at it is the full data life-cycle. Remember, some data are only short-lived, while others may need to be retained for years. Again, when it comes time to dispose of the data, you'll need to do so securely. Basically, you want to think about the purpose, applicable regulations and acts, a litigation plan, and a review and update schedule. A litigation plan is essential – in case any violations happen.

Inform your Staff

The last step is to inform the team about the data retention policy. You don't want a situation where they assume you don't have a policy in place. It's even a good idea to have a few team members join in as you develop the policy to understand the various aspects of the policy better.