HRIS System Security: What You Need to Know - A Comprehensive Guide

Learn HRIS system security essentials with OutSail: Protect sensitive employee data with best practices, compliance with privacy regulations, and robust vendor security features.

Brett Ungashick
OutSail HRIS Advisor
July 4, 2023
user comparing HRIS systems

The protection of employee data is a top priority for modern organizations. Human Resource Information Systems (HRIS) are critical tools for storing and managing sensitive employee information. Unfortunately, HRIS systems are also vulnerable to attacks and data breaches, which can have costly consequences. As such, organizations must prioritize data security when selecting and implementing an HRIS system. This guide provides an overview of HRIS system security best practices, the latest data privacy regulations, and the key features to look for in HRIS vendors.

Understanding HRIS Systems:

HRIS systems are software solutions designed specifically for managing and tracking employee information. They store a wide range of data, from employment records and payroll information to performance evaluations and attendance tracking. HRIS systems streamline the process of recruiting, onboarding, training, and managing employees by automating many of the administrative tasks associated with these activities.

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The Importance of Data Security in HRIS Systems:

HRIS systems store sensitive employee data, including Social Security numbers, bank account information, and performance reviews. As a result, these systems are prime targets for malicious actors looking to access confidential data or steal sensitive information. Data breaches can have severe financial and legal implications for organizations and reputational damage. Organizations must prioritize data security when selecting and implementing an HRIS system.

Some of the reasons why data security is essential in HRIS systems are:

  • Protecting employee data from malicious actors: HRIS systems store confidential data, such as Social Security numbers and bank account information. Without proper security measures, this information could be accessed by malicious actors looking to steal identity or perform fraud.
  • Meeting legal requirements: Organizations must implement adequate security measures to ensure compliance with local laws and regulations. For example, the EU’s General Data Protection Regulation (GDPR) requires organizations to protect personal data collected from European customers and employees.
  • Minimizing financial losses: Data breaches can significantly impact an organization, ranging from fines and legal fees to reputational damage. Organizations must prioritize data security when selecting and implementing an HRIS system to avoid these costly consequences.

Get the Full Picture: Want more details on the HRIS market? Dive deeper into features, pricing, and user reviews in our comprehensive HRIS Marketplace.

HRIS System Security Best Practices:

Organizations should ensure their HRIS system is protected with the latest security measures. Here are some of the best practices for securing an HRIS system:

1) Vendor Selection and Due Diligence

Selecting the right vendor is crucial to ensure the security of an HRIS system. Before choosing a vendor, organizations should conduct thorough research and due diligence. It involves evaluating the vendor's security protocols and reviewing their compliance with industry standards and regulations.

Furthermore, it is recommended for organizations to conduct security audits in order to verify that the vendor is fulfilling their security obligations. This can help reduce the risk of data breaches and ensure the vendor can respond to security incidents effectively.

2) Risk Assessments and Access Controls

Regularly assessing an HRIS system for potential risks and vulnerabilities is crucial. Organizations should identify and mitigate potential security threats before they can cause harm. Risk assessments should be performed regularly, and the findings should be used to develop and implement security controls.

Organizations should also have robust access controls to prevent unauthorized individuals from accessing employee data. Access privileges should be granted based on the user's role and responsibilities within the organization. Regularly reviewing and updating access privileges can help prevent data breaches caused by employee negligence or malicious behavior.

3) Authentication Methods

Authentication protocols are essential to protect employee accounts and data stored in the HRIS system. Robust authentication methods can prevent cybercriminals from hijacking employee accounts and accessing sensitive information. Multi-factor authentication (MFA) is a popular and effective method of verifying user identity.

MFA requires users to provide two or more authentication factors, such as passwords and security tokens, before accessing the HRIS system. MFA can help protect against cyber-attacks and ensure the security of employee data.

4) Data Encryption

Organizational data stored in an HRIS system should be encrypted at rest and in transit to prevent unauthorized access. Encryption ensures that sensitive data remains protected even if a breach occurs. Encryption protocols should be implemented at all levels of the HRIS system, including data storage and transmission.

Furthermore, it is recommended for organizations to utilize strong encryption techniques and conduct routine evaluations and updates of their encryption procedures to guarantee the data's security.

5) Employee Training and Security Awareness

Employees are often the weakest link in an organization's security defenses. Therefore, it is essential to equip employees with the knowledge and tools to protect sensitive data. Organizations should provide training on security best practices, including password management, social engineering, and phishing attacks.

Regular security awareness campaigns can help employees recognize potential threats and take appropriate action to prevent data breaches. Employee training and security awareness programs can help reduce the risk of data breaches caused by human error.

Data Privacy Regulations and HRIS Systems

Data privacy regulations have become critical for organizations worldwide in today's data-driven decision-making. Ensuring that their Human Resource Information System (HRIS) complies with these regulations is vital to protect employees' data and avoid penalties for non-compliance.

The General Data Protection Regulation (GDPR) is a comprehensive data privacy regulation enacted in the European Union (EU) in 2018. It aims to safeguard the privacy rights of individuals and regulate the processing of personal data. The GDPR applies to all organizations that process the personal data of EU residents, regardless of their location.

Organizations must implement technical and organizational measures to ensure personal data's confidentiality, integrity, and availability. In the case of HRIS systems, organizations must ensure that employees' data is collected, processed, and stored lawfully, transparently, and securely. They must also obtain explicit employee consent for data processing activities and provide them access to their personal data.

Non-compliance with data privacy regulations such as the GDPR and CCPA can result in severe penalties, including fines, legal actions, and reputational damage. Organizations that fail to comply with these regulations may face fines of up to €20 million or 4% of their global annual revenue, whichever is higher, under the GDPR. Similarly, the CCPA imposes fines of up to $7,500 per violation. In addition to financial penalties, non-compliance can harm an organization's reputation and erode customer and employee trust.

Evaluating HRIS System Security Features in Vendors

When evaluating HRIS vendors, there are several key security features that organizations should look for.

Security Certifications and Accreditations

One critical factor to consider when evaluating HRIS vendors is their security certifications and accreditations. The most common certifications include ISO 27001 or SOC 2. These certifications demonstrate that the vendor has established and adheres to industry-standard security controls and processes. It also shows that they regularly undergo security audits to maintain compliance.

Vendor's Reputation and Track Record in Security

Another critical factor to consider when evaluating HRIS vendors is their reputation and track record in security. Organizations should research the vendor's security history, such as data breaches or security incidents, and assess how quickly and effectively they respond to them. Additionally, organizations can review the vendor's security policies and procedures to understand how they manage security risks.

Case Studies of Secure HRIS System Implementations

Organizations should also seek out case studies of secure HRIS system implementations from the vendor. This allows them to see how other organizations have successfully implemented the system and how the vendor ensured the security of their data. It also provides an opportunity to speak with these organizations directly to get feedback on their experiences and any security concerns they might have.

Conclusion:

HRIS system security is essential when selecting and implementing HRIS systems due to the sensitive nature of HR data and the increasing frequency of cyber-attacks. To prioritize data security, organizations must invest in HRIS systems that comply with data privacy laws, implement appropriate access controls and authentication measures, and regularly conduct security audits to identify vulnerabilities and mitigate risks.

HR professionals and business owners are responsible for ensuring the security of their HRIS system to protect employees' sensitive information and safeguard their organization from costly data breaches and legal repercussions. Sharing experiences and thoughts on HRIS system security can improve the security of HRIS systems and maintain trust and confidence with employees and stakeholders.

FAQs
1. Why is data security important in HRIS systems?

Data security is crucial in HRIS systems because they store sensitive employee data such as Social Security numbers, bank account information, and performance reviews. Without proper security measures, this information is vulnerable to malicious actors who may attempt to steal or misuse it, leading to financial losses, legal consequences, and reputational damage for organizations.

2. What are some best practices for securing HRIS systems?

Some best practices for securing HRIS systems include:

Thorough vendor selection and due diligence

Regular risk assessments and access controls

Robust authentication methods like multi-factor authentication

Data encryption for stored and transmitted data

Employee training and security awareness programs

3. What data privacy regulations should organizations consider when implementing HRIS systems?

Organizations should consider regulations such as the General Data Protection Regulation (GDPR), which applies to organizations processing personal data of EU residents, and the California Consumer Privacy Act (CCPA), which applies to businesses collecting personal information of California residents. Compliance with these regulations is essential to protect employees' data and avoid penalties for non-compliance.

4. What security features should organizations look for when evaluating HRIS vendors?

When evaluating HRIS vendors, organizations should look for:

Security certifications and accreditations such as ISO 27001 or SOC 2

Vendor's reputation and track record in security

Case studies of secure HRIS system implementations

Transparency regarding security policies and procedures

5. How can organizations prioritize data security in HRIS system selection and implementation?

Organizations can prioritize data security in HRIS system selection and implementation by conducting thorough research, selecting vendors with strong security measures, implementing appropriate access controls and authentication methods, complying with data privacy regulations, and regularly auditing and updating security measures.

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Meet the Author

Brett Ungashick
OutSail HRIS Advisor
Brett Ungashick, the friendly face behind OutSail, started his career at LinkedIn, selling HR software. This experience sparked an idea, leading him to create OutSail in 2018. Based in Denver, OutSail simplifies the HR software selection process, and Brett's hands-on approach has already helped over 1,000 companies, including SalesLoft, Hudl and DoorDash. He's a go-to guy for all things HR Tech, supporting companies in every industry and across 20+ countries. When he's not demystifying HR tech, you'll find Brett enjoying a round of golf or skiing down Colorado's slopes, always happy to chat about work or play.

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