Your HR System and Payroll have the most sensitive data, employee salaries, bank transfers, tax records, performance assessments, etc. Have you ever asked yourself if this information is safe?
Data security has transitioned from being an IT issue to a necessity for your business in today’s technology-driven world. Because of increased cyber risks and the rise in compliance obligations, businesses must take a proactive approach to security for their payroll software, attendance software, leave management software, and performance management software.
What is Data Security?
Data Security involves establishing strategic rules, technical and organizational safeguards, and processes that ensure the protection of your digital information against unauthorized access, use, modification, or destruction. In the case of the HR function, Data Security is focused on providing secure storage and access to employee records held in HR Software Systems.
To protect data, the Information Security framework includes technical safeguards such as encryption and access controls, along with organizational policies to establish compliance with applicable laws and regulations, and to protect privacy and to ensure responsible handling of data throughout an employee’s lifecycle.
The following are key Data Security elements:
- Data Encryption
- Access Control
- Data Backup and Recovery
- Monitoring and Auditing
- Regulatory Compliance
Why Every Organization Needs Data Security in HR Software?
1. Safeguarded Employees’ Personal Records
HR software systems store sensitive employee data, such as social security numbers, personal identifying information (PII), and financial information. The HR data protection requirements are strict due to the importance of sensitive employee information, the need for PII security, and the need to comply with federal and state regulations.
2. Ensure Legal And Regulatory Compliance
There are new employment laws every year; companies must keep informed of the evolving requirements and be compliant with applicable state and federal regulations to avoid penalties, lawsuits, or damage to their reputation.
3. Prevent Payroll Fraud and Financial Loss
Using secure payroll software can help reduce the risk of unauthorized changes to employee pay, the ability to commit payroll fraud, or experiencing an incident of financial mismanagement.
4. Build Trust and Confidence With Employees
When employers make data privacy and protecting employee information a priority, they create an environment where employees have confidence in sharing their information.
5. Enable Secure Remote and Cloud Access
HR technology must be securely built on cloud-based platforms with secure access to workforce data stored in the cloud.
6. Reduce Risk of CyberCrime Attacks
Using advanced security measures reduces the likelihood of malware, valuable information, and cyber attacks on HR databases.
7. Protect Company Reputation and Brand Image
Good security practices enhance the company’s credibility as an employer, develop its brand image, and demonstrate to the public that it is a responsible corporate citizen.
What are the Types of Disturbances in HR Software?
1. Unauthorised Access
People who should not have access to an HR system can gain access through weak passwords and the specification of access.
2. Data Breaches
Cybercriminals take advantage of software vulnerabilities to steal HR data, including payroll, personnel identification, and personal health information. Data errors created by HR systems can also help promote hacking attempts.
3. Malware and Ransomware Attacks
Malware is malicious code that may disrupt an HR database or computer, corrupting the database or encrypting certain files, then requesting a ransom to restore access to the database or its resources. Ransomware attacks against HRIS are becoming increasingly common.
4. Insider Threats
Employees or administrators who have access to an HR system may intentionally or unintentionally compromise data security.
5. Phishing Attacks
Fraudulent emails can compromise employees’ user IDs and passwords, and also respond to requests for information concerning payroll or attendance systems.
6. System Configuration Error
If the HR software has been improperly configured, it may accidentally expose sensitive, confidential, or personal data to the public.
7. Data Loss After Technological Failure
If an HR software is subject to an equipment failure (hardware malfunction, server crash, etc.) or a software bug, there may be unintentional deletion of employee records or data corruption.
Key Features That Strengthen Data Security in HR Software
1. Role-Based Access Control
Refers to restricting employees from seeing information linked to payroll software, leave management, or performance management based on job roles (assuming this means that a manager could have access to their employees’ performance records).
2. Multi-Factor Authentication
If you are using an HR system, multi-factor authentication will help reduce the risk of users accessing the system without proper identification by requiring multiple forms of identification (such as OTP via text, biometrics).
3. Encrypted Data
Sensitive employee data stored or sent through HR systems is encrypted so that the data can be protected from being intercepted or breached.
4. Secure Cloud Infrastructure
The secure cloud infrastructure uses firewalls, intrusion detection systems, and secure servers to protect HR databases from cyber threats and external attacks.
5. Audit Trails
HR systems are designed to maintain detailed logs of user activities so that the organization’s compliance level can be established, and then enable quick detection of suspicious activity.
6. Automated Data Backup
Your data is regularly backed up to an off-site location, so it is protected against permanent loss due to cyberattacks, failures, human error, etc.
What are the Compliance Requirements in HR Data Security?
Employers are obligated to align their human resource processes with the regulations regarding the privacy of data. In India, these regulations are found in both the Information Technology (IT) Act of 2000 and there may be further Data Protection Regulations that employers must comply with. On a global basis, the GDPR imposes strict rules for handling data and protecting individuals’ privacy rights related to both.
Employers must ensure:
- The lawful collection and processing of employee data.
- The accurate management of consent.
- The secure storage of employee data and the restriction of access to confidential employee data.
- The right of every individual to access their own, to have corrected, and to have deleted their own private, personal data.
- Regular audits of compliance with the law and maintenance of all necessary documentation.
The organization could be financially penalized for violating compliance with the law and face long-term damaging brand impact.
Best Practices to Improve Data Security in HR Software
1. Conduct Regular Security Audits
Identify vulnerabilities in HR software, payroll systems, and attendance management tools before cybercriminals exploit them.
2. Train HR Teams on Cyber Security Awareness
Educate employees about recognizing phishing and the responsible handling of sensitive data.
3. Implement Strong Password Policies
Require the use of complex passwords and update them regularly on HR software platforms.
4. Update Software Regularly
Ensure payroll software and performance management software are updated regularly for security purposes.
5. Use Secure Integration Methods
Utilize secure means to connect HR solutions through APIs between other HR systems and finance tools or third-party applications
6. Continuously Monitor System Activity
Enable alerts to detect suspicious logins or unauthorized changes to payroll immediately.
How Cloud-Based HR Software Enhances Data Security?
HR software that is delivered through online cloud networks has greatly improved security features over previously used local and on-premise versions of HR systems. Because of central storage, automatic upgrades, and integrated security controls, cloud HR systems also offer improved protection against data breaches for all modules (payroll processing, absence tracking, leave requests, performance reviews) utilizing the HR software.
The key improvements made to how cloud HR manages security to protect your organization include:
- Centralized Security of HR Data
- Encryption of HR Data
- Automatic security upgrades and patches
- Secure remote access to cloud HR software
- Proactive cybersecurity monitoring of the HR system
- Automated business process compliance controls
Conclusion
Protecting your employees’ data is important to ensuring that your company’s data security is protected. With the increasing use of technology and HR systems, including payroll systems, tracking of employee attendance and time off, performance appraisal systems, and so on, it is important for businesses to implement a comprehensive cybersecurity strategy that protects their employees’ data as well as their business’s data.
Having a reliable and secure HR system ensures that you will have the appropriate amount of protection (cybersecurity) and remain compliant with all applicable data privacy regulations. When you choose Savvy HRMS to help manage your workforce, you will utilize a secure and dependable platform with enhanced data security features, encrypted payroll, clear compliance-driven workflows, and excellent access controls. Safeguard what is most important to you, your people, and their sensitive data.
