How to Protect Employee Data on Your HRMS

Harshit Agarwal
April 17th, 2020 · 8 min read

Employee data is certainly the most sensitive as its exposure leads to even bigger attacks. In fact, the eBay hack where 145 million customers were compromised started with stolen employee credentials.

With the advent of technology and the evolution of the business environment globally, robust HRMS (Human Resource Management System) tools have replaced the traditional HR solutions. And as the rate of their adoption increases worldwide, concerns related to employee data security rise on a similar level too. We will cover some of these issues here and see how some simple steps can help you efficiently protect employee data on your HRMS. But before diving deep, let’s know more about an HRMS.

Introduction to HRMS Systems

A typical HRMS is an advanced HR software that utilizes information technology capabilities to carry out the management of numerous HR functions inside an organization.

One of the most important highlights of HRMS implementation is that it enhances the overall efficiency and productivity of the business’s HR function by automating the tasks which were done manually in the past. This, in turn, allows the HR professionals to channel their time on more critical and strategic tasks.

HRMS generally covers all the aspects of a traditional HRIS and also has high-end capabilities ranging from expense management to analytics. Now, let’s see how an HRMS assists in carrying out the major HR functions.

What does a Typical HRMS Include

While the best HRMS tools are the ones which best align with its customer’s business goals, there are certain functions which every HRMS must fulfil in order to suit its purpose.

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Some of the key functions of HRMS include:

Recruitment: One of the primary functions of HRMS is assisting the HR team during the recruitment process. Through referrals, campus hirings, internal promotions, and job postings, the recruitment function is carried out efficiently.

Onboarding:

HRMS reduces the burden on HR managers by efficiently managing the employee onboarding process. They typically provide customizable onboarding templates, offer letters, manage background checks, and set up user accounts and access passes for the newly hired employees.

Time & Attendance:

HRMS solutions also take care of timing and attendance functions by offering facilities like biometric tracking of attendance, providing facilities for remote working, in-time and out-time compliance checks, etc.

Payroll Management:

Processing of payroll is one of the most critical activities in any organization. Modern HRMS solutions assist the employees in payroll management by helping them with tax and investment declarations, provide access to payslips on multiple platforms, assist in loan management and also help the company in updating the existing salary structures.

Employee Engagement:

One of the core HR functions is to connect with the employees and understand their needs better. HRMS tools help achieve such engagement goals by setting up organization social networks, setting up birthday and work anniversary reminders, creating discussion groups, etc.

Talent Management:

Every organization focuses on hiring talented individuals. But even more important is the fact that existing talent needs to be nurtured efficiently. HRMS solutions achieve this by setting up talent assessment pipelines, creating talent profiles, through goal cascading and so on.

Expense Management:

Expense management allows managers to easily track and manage reimbursement requests like travel, food and mobile expenses and approve them based on the set limits. Other financial accounting functionalities like tax and CTC management are also offered by HRMS vendors.

Help Desk:

HRMS vendors also provide an efficient query handling system to track employee problems and provide prompt solutions. This may include resolution of system issues, internal queries, attendance adjustments, etc. They create categories and subcategories of queries and provide options for employees to raise tickets against the issues seamlessly.

Analytics:

One of the key functions of any HRMS is to assist the management in drawing out actionable insights from the collected employee data. HRMS tools create customized dashboards and perform predictive and prescriptive analytics on employee data to bring meaningful insights.

Comparing On-Premise HRMS with HRMS Cloud

Organizations often face a dilemma while opting for a suitable HRMS. And before choosing what suits them best, it becomes important to compare the available options on certain parameters. There are certain well-defined differences when it comes to on-premise and cloud HRMS. Some of the most prominent ones are as follows:

Installation Speed and Accessibility

If an organization has the required IT workforce and infrastructure in place, then setting-up in-house HRMS might work out for them. Otherwise, cloud HRMS is the go-to option. Due to easy and fast installation and user-friendliness, many organizations certainly prefer cloud over the on-premise option. However, if the business workplace lacks proper internet connectivity, having a cloud HRMS might become a burden.

Ease of Maintenance and Use

As compared to on-premise HRMS, the cloud-based HRMS is relatively easier to integrate into the existing system. Moreover, it is more user-friendly and that is why it requires less time and effort to train personnel to use it. In the case of on-premise HRMS, substantial effort is required during maintenance and upgrades. A large IT workforce is also required to handle all this and productivity gets affected as a result. Cloud-based HRMS vendors, on the other hand, take care of maintenance and upgrades by themselves.

Information Security

As far as the assurance of data security is concerned, on-premise HRMS has an advantage over its cloud-based opponent. This is because, in the case of in-house HRMS, businesses fully own their data and can protect it within their own firewalls.

However, if a business lacks the required infrastructure to store and manage large volumes of data, it’s better to go for cloud HRMS as it also provides all the required features and the essential level of data security.

Good Read: Best Organizational Dynamics for Information Security

Short-term and Long-term Costs

In the case of on-premise HRMS, organizations have to bear the initial cost of hardware and software installation. Moreover, they might incur added costs during the configuration and implementation of the system.

In cloud-based HRMS, the initial cost is lower and businesses only need to pay the regular fee of subscription. However, in the long run, the added subscription fee of the cloud HRMS may surpass the cost associated with in-house HRMS.

Flexibility and Suitability to Business

The choice of suitable HRMS also depends on the size of the organization and the ease with which the system could be integrated. Organizations of larger size generally prefer in-house systems as they are more flexible and customizable. For the rest, cloud-based systems are appropriate.

Overall, there is no clear winner in the race of cloud and on-premise HRMS. However, the final choice should be based on the resources at hand, available budget, and workforce and business goals.

Security Aspects to Consider while Implementing an HRMS

For every organization, it is during the implementation phase of HRMS that the systems are most vulnerable to cybersecurity concerns. That is why it becomes crucial to effectively analyze all the security aspects. During the implementation phase, all the concerned parties like employers, managers, and vendors should work closely to handle the security parameters efficiently.

These aspects must be stressed upon:

Selecting the Vendors who put Security First:

Before purchasing a new HRMS, it becomes essential to understand what other users of the same system have to say about it. Even if a business is conscious about security, going for a vendor who also emphasizes security on a similar level will surely reduce the organization’s efforts while putting the security parameters in place.

Analyzing Basic Security Safeguards:

Before making a final selection, it must be ensured that the HRMS vendor’s security safeguards fit all the benchmarks of security. Almost all the HRMS vendors focus on security these days, but the level of their preparedness must be checked beforehand. If necessary, business leaders must take advice from security experts to make sure that the system passes the required security litmus test.

Granting and Restricting Access Wisely:

As soon as the HRMS gets implemented into the organization, the management must make sure that access to information is controlled efficiently. To make only the required information accessible, checks should be placed on employees and even managers so that no one abuses their access rights.

It is necessary to keep a check on internal threats to information security. Using proper authorization techniques on each access level is a smart way to ensure that the managers and employees can see only that information which is essential with respect to their job requirements.

Moreover, terminated employees must be restricted from accessing the system immediately. Experts also believe that before the system goes live and everyone gets access to data, it is a good practice to assess the security of the system by using some dummy employee data.

Employee Data and Storage

In case some business is still dependent on traditional HR systems, collection and interpretation of business data must take a lot of time and a lot of human effort. The data storage capabilities of the traditional HR tools are no longer capable enough to meet your organizational goals. Correspondingly, it becomes rather difficult to manipulate the data and filter out the required information and analytics. Moreover, the lack of data backup capabilities may pose other problems as well.

On the other hand, a modern HRMS seems to eliminate these worries by generating, storing and protecting useful employee data and strengthening the laid out business objectives. It’s efficient data manipulation capabilities enable managers to better align employee performance with business goals and drive the organization forward.

We often hear in the news about business data and personnel data being stolen or exposed when someone accidentally leaves their laptop somewhere or other similar things happen. And we all know this can spell disaster over any company. An efficient and security-conscious HRMS can save you from such mishaps by storing your data safely so that it can’t be lost or stolen.

Why is HRMS a Gold Mine for Hackers to Steal Data?

An HRMS is virtually a gold mine of information for hackers. Generally, sensitive employee details like names, addresses, dates of birth, salary and banking details, social security numbers and other personal data are stored in HRMS.

Once threat actors breach the safeguards of the system and get hold of any such data, they can efficiently carry out identity theft attacks and even steal money using the stolen credit card info. Be it small or even large businesses, no is practically immune to such threats unless and until proper security measures are put to place.

Now that we know why the security of HRMS is so important, let us understand some of the key security practices to follow in order to ensure the security of data on an HRMS

Security Practices to Follow while Implementing an HRMS

In order to ensure security and protect employee data on HRMS, it becomes critical to follow some basic security practices. Since both the HRMS vendor as well as the business owners are responsible for security, constructive collaboration is required to achieve the desired results. Some of the security practices include:

Conducting Regular Compliance Checks:

There are numerous regulatory compliances like GDPR and HIPAA which ensure that the concerned party is taking all the relevant measures to protect valuable information. That is why it becomes necessary to check whether your HRMS solution is in line with the necessary security guidelines and complying to the regulations. Mature HRMS vendors maintain a regulatory compliance dashboard where they get to see the status of all the security assessments conducted in the context of specific regulations.

Quarterly Vulnerability Assessments:

In order to make sure that there are no security loopholes in the data pipeline as the HRMS tool collects sensitive employee data, it is essential to carry out regular vulnerability assessments. Moreover, as the data in transit is exposed to the cloud environment, it becomes even more critical to scan all the possible exploits and discuss mitigation strategies in advance.

CI/CD Implementation at SDLC

The best way for HRMS vendors to ensure safety of employee data is to inject security in the early staged of the SDLC and make it an integral part of the overall development process. Active testing and verification of scripts must be done in order to proactively assess all the vulnerabilities and leave no stone unturned.

Data Storage Checks:

One of the key aspects when it comes to employee data security on HRMS is conducting regular data storage and integrity checks, maintaining data backups, data encryption and checking for storage hardware failures. It is also essential to prevent unauthorized access in order to maintain the integrity of the data.

Conclusion

Employee data is one of the most valuable assets for organizations of every scale and type. And that is why it becomes essential to take proactive measures so as to keep the HR data secure and safe from threat actors. A modern HRMS can help businesses achieve this goal but only when certain security parameters are strictly maintained. Despite the already established security safeguards, it is essential to stay updated with the most recent threats and optimize the security readiness of your HRMS accordingly.

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