Cybersecurity and Data Privacy in HR Technology: What You Need to Know

Data privacy is no longer confined to banks and credit card companies; safeguarding employee information has become a crucial element of an organization’s overall cybersecurity strategy. As reliance on advanced HR technologies grows—whether in large enterprises or small businesses—ensuring the privacy of sensitive data remains a significant challenge.  

Insights on Data Breaches:  

• In 2023, there were 3,205 publicly reported data breaches, affecting approximately 353 million individuals—a 78% increase compared to 2022.
• Employee personal identifiable information PII accounted for 40% of all breaches in 2023, marking a significant increase from 26% in 2021.
• Nearly 1 billion email addresses were exposed in a single year, impacting 1 in 5 internet users.
• Data breaches cost businesses an average of $4.35 million in 2022.
• Worldwide cybercrime costs are projected to reach USD 10.5 trillion annually by 2025, highlighting the urgent need for stronger cybersecurity measures.
• Data breaches involving remote work cost an average of USD 173,074 more, reflecting the added cybersecurity challenges in today’s remote work environment.
• For the 12th consecutive year, the United States has experienced the highest cost of a data breach, averaging USD 5.09 million.  

Below we explore the pivotal role HR professionals play in securing employee data. It talks about recent data breaches, outlines best practices for HR data security, highlights the importance of compliance, and reviews global privacy laws. Let’s begin!

What Is Data Privacy in HR Technology?

Data privacy in HR technology involves safeguarding personal information collected and stored by organizations, which is crucial in today's business landscape where employee data—ranging from contact details to financial and health information—is routinely processed.  

HR departments face ethical considerations in handling this data, balancing the need for informed decision-making with the responsibility to ensure that data collection and storage practices are lawful, fair, and transparent. Effective data privacy protocols are essential for protecting individuals' information and establishing trust and credibility within the workplace.  

High-Profile Employee Data Leaks

Here’s the list of some of the biggest data breaches in the past few years:

• Tesla Data Breach (2023)
  In May 2023, Tesla’s confidential information, including 23,000 internal documents and personal data, was stolen by two former employees and shared with a media outlet. The breach, which could result in a USD 3.3 billion GDPR fine, underscored failures in revoking access permissions and highlighted the importance of effective onboarding and termination procedures, along with rigorous user access reviews and monitoring.
• Cash App Data Leak (2022)
  In April 2022, a former employee of Cash App illegally downloaded personal data of 8.2 million customers, including full names and brokerage details. The breach, which went unnoticed for four months, led to a class action lawsuit against Cash App Investing and its parent company. The incident revealed gaps in the company’s termination procedures and access reviews, emphasizing the importance of proper offboarding processes and continuous user activity monitoring.
• Yahoo Intellectual Property Theft (2022)
  In February 2022, Yahoo’s former research scientist Qian Sang allegedly stole 570,000 files, including valuable source code and strategic information, intended for a competitor. The theft, intended for financial gain, was facilitated by Sang’s access to sensitive data and highlighted the need for better employee monitoring, USB device management, and real-time alerts to prevent insider threats and protect intellectual property.
• SGMC Data Theft (2021)
  In November 2021, a former employee of South Georgia Medical Center unlawfully downloaded patient data to a USB drive after leaving the organization. This data theft, which included test results and personal information, prompted the medical center to offer credit monitoring and identity theft restoration services to affected patients. The incident highlighted the necessity of privileged access management to prevent unauthorized data access.  

The Growing Role of HR in Cyber Risk Management

As organizations increasingly adopt the latest HR technology, their digital data footprint expands significantly. Given the increasing complexity of cyber threats, HR departments are stepping up their role in cyber risk management. HR professionals are tasked with developing and implementing robust data protection policies, educating employees on best practices, and ensuring compliance with relevant laws and regulations.  

Innovations such as Automated Talent Acquisition, Intelligent Identity Access Management, AI-Enabled Employee Training Management, AI-Driven Applicant Tracking Systems (ATS), and AI-Powered Background Screening Solutions are now integral to modern HR practices. These tools digitally capture sensitive Personally Identifiable Information (PII), necessitating enhanced cybersecurity measures.

These advanced systems automate security protocols, analyze large volumes of data, detect anomalies and potential threats, and respond rapidly to cyberattacks. By proactively addressing data security, HR can bridge the gap between data protection and personnel management, fostering a secure and productive work environment.

How Can HR Protect Your Data?

Let’s look at how with simple steps HR leaders can protect employees and organization’s data:  

1. Keep Software and Operating Systems Updated

Account vulnerability is another common security threat, often caused by weak authentication or poor password management. Outdated software can lead to issues like bugs, frequent system crashes, and security vulnerabilities. Regular updates introduce new features, enhance productivity, and most importantly, strengthen system security. Updated software improves protection against common threats and ensures compatibility with other installed programs. Human resources should ensure that all systems are updated regularly to protect HR data.

2. Enforce Strong Password Practices

HR departments are often targets for phishing and password attacks, where cybercriminals use malware to steal sensitive data. To counter this, it's crucial to establish and enforce strong password practices across the organization. HR should collaborate with IT to train employees on protecting their accounts. Best practices include:

• Using a password manager
• Avoiding weak passwords
• Discouraging password sharing
• Implementing two-factor authentication

3. Manage Third-Party Security Risks

Engaging with external service providers can expose organizations to third-party security risks. If a vendor is compromised, it can affect the organizations they serve. To mitigate these risks, consider:

• Restricting access to company systems
• Conducting regular screenings of third parties
• Implementing protection policies for third-party interactions
• Utilizing the latest security technologies
• Scheduling regular security reviews  

4. Align HR with IT

For enhanced HR data security, the HR and IT departments need to work closely together. This collaboration helps HR identify protective tools and build a robust security system. Effective communication between these departments ensures informed decisions about software purchases and security measures.

5. Conduct Regular Vulnerability Scans and Penetration Testing

To strengthen HR data security, regularly scan for vulnerabilities and conduct penetration testing. Vulnerability scanning can be automated, while penetration testing requires hands-on efforts to identify system weaknesses. Detecting and addressing these weaknesses promptly ensures data protection.

6. Educate Employees on Data Protection

Empower employees to protect their data proactively by educating them on best practices. Teach them how to conduct safety audits, store data securely, and identify suspicious emails. By using secure collaboration platforms, organizations can centralize communication and data management, reducing the risk of cyberattacks.

A Note on the Global Privacy Laws and HR Data Protection

HR professionals must navigate various privacy laws to protect employee data and ensure compliance. Key global laws and frameworks include:

• Lei Geral de Proteção de Dados (LGPD) - Brazil: Requires explicit consent for data processing, protects privacy rights, and mandates secure handling of employee data.
• General Data Protection Regulation (GDPR) - European Union: Applies to all organizations processing EU citizens' data, regardless of location, and grants rights like data portability and the right to be forgotten.
• New Zealand Privacy Act 2020: Ensures lawful data collection and provides individuals with rights to access and correct their personal data.
• Personal Data Protection Act 2012 (PDPA) - Singapore: Requires consent for data handling, mandates secure data transfers, and protects employee data.
• California Consumer Privacy Act (CCPA) - United States: Focuses on transparency, giving employees rights to know, access, and opt out of the sale of their personal data.

In addition to these laws, the ePrivacy Regulation (ePR) in the EU complements the GDPR by regulating electronic communications, while the APEC Privacy Framework promotes data privacy across borders in the Asia-Pacific region. Global best practices like Privacy by Design emphasize integrating privacy into system designs, and OECD guidelines provide a framework for international data protection.

To Sum It UP…

HR data breaches can significantly damage businesses by eroding employee trust and potentially reducing productivity. Declining employee morale is a common consequence. As technology evolves, the importance of HR data security grows. HR departments must stay vigilant against emerging cybersecurity threats and adhere to evolving privacy regulations to safeguard employee information. By keeping up with data protection trends, investing in robust security tools and technologies, and promoting a culture of data security awareness, HR professionals can help their organizations maintain compliance and security in a dynamic digital environment.