How to Create an Effective Data Retention Policy

By Michael Meyer

Published on February 29, 2024

Image of a digital lock

Data has become a valuable business asset. It’s data that drives decisions and shapes strategy. But with it comes significant responsibility — managing it.

With 84% of organizations hit by ransomware reporting a loss of business or revenue, effective data policies matter. Many companies need help with the challenge of managing their data effectively. Are you one of them? Take heart; you’re not alone!

This article will explain the basics of creating a compelling data retention policy that matches your unique organizational needs. The goal is to help you maximize the potential of your data while keeping it secure, compliant, and accessible.

Understanding data retention

Before anyone can begin to create an effective data retention policy, they need to know some basics. What is data retention, and why is it so important?

What does data retention mean for businesses?

When businesses store information for some time, this comes under data retention. It could be names and addresses of customers, employee information like medical information, or even job application forms.

When discussing data retention, we’re not just considering keeping it safe. We include the rules governing its retention–how to manage it while retaining it and how long to retain it.

As a minimum, a data retention policy mentions which data is kept, why, and for how long. Policies must also consider the organization’s unique needs, regulations, and user privacy.

Why does data retention matter?

The implications of poor data management are significant. Understanding these makes it easier to understand the significance of secure data retention.

Two reasons why all organizations need an effective data retention policy:

  1. Legal risks: With data privacy regulations like GDPR and CCPA, organizations failing to protect data or meet data compliance standards risk severe legal consequences. They also risk damage to their reputation and hefty fines.

  2. Data security: Proper data retention means you only keep what is necessary to reduce the risk of security breaches.

Graphic displaying mean recovery costs

Identifying your organization’s needs

How much data do you have? Where is it stored? Before devising a custom data retention policy, you must understand the organization’s unique position.

Here are the steps to take:

  1. Assess your current data ecosystem. 

  2. Quantify the volume of data. You’ll need to include structured, unstructured, and emerging datasets. 

  3. Consider the types of data you have, including financial records, customer data, employee information, and communication data.

  4. Identify where the data is stored, such as on-site servers, cloud storage, databases, and remote devices.

  5. Understand who can access and manipulate data within the organization. 

  6. Determine what data you have a legal responsibility to keep for items such as a legal hold. 

Creating your data retention policy

Once the organization’s data fundamentals are known, a data retention policy will take shape. The policy will serve as a guide to existing employees and recruits alike. It ensures that data is managed securely and complies with applicable regulations. The policy needs to be accessible with all of your other data policies. A good choice for this can be in a data catalog.

Don’t know where to start? Follow these steps:

1. Define your goals

The first step is to define the goals of your data retention policy. It may seem obvious to some, but you must consider what you’re trying to achieve by creating the policy. Are you hoping for better data governance? Do you want a more streamlined data management system? Whatever your objectives, these will shape how you build the policy.

Person taking notes on paper between two laptops

2. Define the categories of data you’re dealing with

Not all data is equal or as valuable. Since you’re likely dealing with data of all kinds, begin by categorizing it into groups. You could base this on relevance, usage, and sensitivity. For example, you might have categories for financial records, customer data, communication data (including emails and telephone records), and employee information. Recognizing the diversity of the data you deal with means you can tailor your data retention policy.

3. Establish retention times

Your policy needs to include the amount of time you will keep each type of data. These retention times need to reflect industry regulations and your organizational needs. For example, laws might dictate that you keep hold of customer transaction data longer than other data, such as your communication record.

4. Consider data disposal

Though you’re writing a policy on data retention, you also need to consider what to do with it all when it’s time to dispose of it. Your policy should clearly outline your disposal procedures to safeguard against breaches effectively. Disposing of data also reduces storage costs and ensures compliance with regulations.

Ensuring Compliance and Security

Security and data management are two of the many things organizations like to outsource, and for good reason. Infrastructure providers like Pantheon and others mean businesses can access specialized expertise and technology to bolster their data security.

Neglecting any aspect of data security can cause serious repercussions. You must safeguard personal and sensitive data from breaches and unauthorized access. Incorporating pseudonymization techniques or anonymization can help protect privacy while retaining data legitimately.

A padlock on a laptop keyboard

Access controls

Besides protecting the data from breaches, controlling who can access and manipulate held data within the organization is essential. There should be strict access controls with clearly defined roles and permissions to ensure employees will only access data they need for their job role.


You also need to plan regular audits as part of your data retention policy, which includes reviewing data access logs, assessing compliance with retention times, and evaluating security measures and their effectiveness. Conducting audits can help identify and address issues like validation errors or potential data vulnerabilities.

Implementation and training

When you’ve finally crafted a policy, you’ll need to shift focus to ensure the entire organization is well-prepared to adhere to it.

For the best results, you’ll need a structured rollout approach. All relevant stakeholders— including IT personnel, data teams, and anyone involved in data management—must first know the policy’s objectives and scope.

Having a detailed implementation plan before announcing any changes is a good idea. It is critical to outline key milestones, who is responsible for each aspect, and deadlines. Also, include any new tools that will facilitate policy enforcement.

A well-informed workforce is crucial to execute your data retention policy effectively. All employees need to understand the principles of the process and their responsibilities within it.

Are you concerned about resistance to change? You can overcome this by designating advocates who can champion the adoption of the policy and provide support to colleagues struggling with the changes.

Graph showing root cause of attack by industry

Monitoring and continuous improvement

Once introduced and established, you must regularly monitor your data retention policy. By tracking its effectiveness, you can make adjustments and improvements.

How can you track effectiveness? For those who love data about data, a WebOps platform can provide real-time visibility into your crucial data compliance and security metrics. It’s also great for informing you of the overall health of your systems.

Platforms like this have custom alerts that notify you instantly of any security vulnerabilities and data breaches. Early detection means you can take corrective action quickly.

Feedback and adjustments

Like any business practice, feedback and subsequent adjustments benefit data management. When organizations encourage their employees to collaborate and shape policies, they foster a culture of continuous improvement toward data compliance and safeguarding. When team members aren’t afraid to raise concerns, they’ll also be more inclined to propose improvements, resulting in a better data security position for the organization.

Creating an effective data retention policy

Data is an asset, but it’s also a liability. Most organizations are well aware of this. People can’t make data-driven decisions without holding onto this valuable information. It’s not a question of whether you need a data retention policy. You definitely do! 

Acknowledging the seriousness of data security and the risks is the first important step in creating a robust policy. A policy will be much more effective with a clear understanding of your objectives, data categories, retention periods, and disposal mechanisms. A one-size-fits-all does not exist here. Remember, you’re not alone. Countless organizations are navigating the same path — and help is out there for those who need it.

  • Understanding data retention
  • Identifying your organization’s needs
  • Creating your data retention policy
  • Ensuring Compliance and Security
  • Implementation and training
  • Monitoring and continuous improvement
  • Creating an effective data retention policy
Tagged with