Human Resource Outsourcing

Data Privacy and Security in HR: Safeguarding Employee Data in an Increasingly Digital World

Our personal digital information transcends mere data points – it's the very foundation of our online identity. Every social media post, online purchase, and banking transaction adds to this ever-growing digital footprint. Unfortunately, this interconnectedness comes at a cost: vulnerability. High-profile data breaches at major corporations serve as stark reminders that even the most secure systems can be compromised. This exposes a chilling reality: digital data is constantly at risk of theft, fuelling a vast underground economy of fraudsters who exploit stolen data for nefarious purposes.

In today's digital world where 80% of companies (4 in 5) leverage the cloud for data storage, data-related crimes are escalating. Moreover, HR departments of organisations – both small and large – hold a treasure trove of sensitive employee data. These departments are prime targets for hackers. The potential fallout from data breaches could be severe, underscoring the critical importance for HR professionals to prioritise employee data security.

Stolen Data: A Nightmare for All

As technology progresses, so do the malevolent tactics and intentions of wrongdoers. Here are some major threats to employee data:

• Identity theft: This scenario involves stolen finances, fraudulent taxes, fictitious medical bills and more, leaving victims with damaged credit scores and lives to rebuild.
• Phishing: Hackers use stolen data to impersonate trusted sources like HR or IT, to extract additional information or trick people into clicking risky links.
• Data leaks: Exposed employee data can be sold on the dark web, making it accessible to other criminals for malicious purposes.
• Operations disruption: Hackers may target employee data to disrupt operations: encrypting data for ransom or leaking it to damage reputations.
• Competitive advantage: If employee information falls into the hands of competitors, they can exploit it to gain an unfair advantage.

These breaches have severe consequences for both employees (lost trust, financial woes) and organisations (damaged reputation, potential lawsuits). Data security must be a top priority for every organisation.

Vulnerability Check: Where Hackers Strike

Understanding threats is key to building strong defences. Here's what organisations need to be aware of:

External threats:

• Hacking attacks: Unauthorised access can be gained by exploiting software vulnerabilities, deploying malware, or phishing.
• Social engineering: This entails utilising human vulnerabilities and manipulation tactics to gain access to confidential information or induce individuals to click malicious links.
• Third-party breaches: Third-party vendors or service providers responsible for storing or processing employee data might inadvertently introduce security vulnerabilities. This concern is shared by nearly 36% of organisations.

Internal threats:

• Accidental leaks: Employees might unintentionally expose HR records by sending emails or documents containing sensitive information to the wrong recipient, losing devices like laptops or USB drives containing unencrypted data, or neglecting proper data disposal procedures.
• Disgruntled employees: Disgruntled or departing employees might deliberately steal or leak employee data as an act of revenge or for personal gain. Incidentally, 39% of organisations view employees as potential threats.
• Weak access controls: Inadequate password management practices like weak passwords, shared login credentials, and overly permissive access controls can make it easier for unauthorised individuals, both internal and external, to gain access to employee data.
• Physical security lapses: Weak building or server room security can lead to unauthorised access.

Forewarned is forearmed. Being aware of common data breach methods is essential to proactively plan defences and allocate resources effectively.

Strategies for data protection

Not a day goes by without a reported data breach. In 2022, there were 1,774 data breaches, averaging 4.8 breaches per day. These statistics highlight the urgent need for robust defence measures. Below are key strategies:

Technical safeguards:

• Encryption: Encrypting data at rest (stored on servers) and in transit (being transferred) protects it from unauthorised access.
• Strong passwords and access controls: Complex passwords with regular change mandates and role-based access based on the principle of least privilege, minimise the risk of brute-force attacks.
• Backups and updates: Regular backups and software updates with security patches safeguard against data loss and ransomware attacks.
• Firewalls and Intrusion Detection Systems (IDS): Firewalls block unauthorised access attempts and intrusion detection systems to identify and alert IT teams of suspicious activity on the network.

Employee education and awareness:

• Security training: Training imparted to employees on cybersecurity best practices, identifying phishing scams, creating strong passwords, and avoiding suspicious links or attachments rates among essential proactive measures for data safety.
• Data privacy & security policy: Clear data privacy & security policies inform employees about data collection, storage, and use. The policies must comply with relevant regulations. Some prominent ones are The General Data Protection Regulation (GDPR), California Consumer Privacy Act (CCPA) and China's Personal Information Protection Law (PIPL).
• Incident response plan: A defined plan, including employee notification and remedial procedures, ensures swift action in case of a data breach.

Physical security:

• Secure storage: Secure and restrict access to physical copies of employee data.
• Device security: Enforce strong passwords and data encryption on employee devices.

Additional measures:

1. Multi-factor authentication (MFA): Adds an extra layer of security beyond usernames and passwords.
2. Penetration testing: Regular penetration testing helps identify and address security weaknesses in systems before hackers discover them.

Strong data security safeguards employee privacy, minimises financial risk, fosters trust, and enhances your organisation's reputation. It's a win-win for everyone.

Continuous vigilance

The battle against cybercrime is a constant race. Hackers are relentless in developing new techniques, and security measures need to adapt accordingly. By implementing a multi-layered approach that combines technical safeguards, employee awareness, and strong policies, organisations can significantly reduce the risk of data breaches and safeguard the privacy of their employees. It's important to remember that data security is a shared responsibility. While organisations need robust security frameworks, vigilance from everyone is crucial.  Also, security is an ongoing process, and organisations should continuously evaluate and update their security practices to stay ahead of evolving threats.

How Infosys BPM can help

Ensuring employee data security is crucial for HR departments but given their myriad responsibilities, entrusting this task to experts is advisable. Leveraging Infosys BPM’s HR outsourcing solutions provides the peace of mind you need regarding employee data security.