In the wake of rising payroll data breaches, big names like the BBC, British Airways, and Boots have unexpectedly found themselves in the spotlight for all the wrong reasons.
When you consider that a staggering 64% of UK firms entrust their payroll to external providers, it paints a vivid picture of the extensive risk faced by employees. Now, more than ever, it’s crucial to partner with a payroll provider that truly values data protection.
The Stakes are High
The Information Commissioner’s Office (ICO) doesn’t mince words when it comes to cracking down on data breaches. Take Interserve, for example. Their lapse? A data compromise affecting 113,000 people. Their penalty? A staggering £4.4 million fine. The takeaway is clear; outsourcing payroll doesn’t mean you can outsource blame.
Companies are still the captains of their ships, holding the ultimate responsibility for data protection. With fines potentially rocketing up to £17.5 million or eating up 4% of your annual turnover, you need to guard your employee data like it’s gold.
And it’s not just about the fines. A single breach can tag a company with an average cost of £3,000 per affected individual. For many SMEs, that’s a quarter of profits vanishing into thin air. But it doesn’t end there. The fallout - dented reputation and shattered trust - is harder to quantify and even harder to repair.
What is causing the data leaks?
Why the surge in breaches? The problem lies in many outsourced payroll providers’ dated operational methods. Despite their significant cyber risk, they operate as though it’s 2010 - relying heavily on manual tasks, sharing sensitive data over email, CSV exports and inexperienced outsourcing staff.
7 Considerations for Choosing the Right Vendor
1. Embrace a tech-first approach
Opt for a technology-centric methodology. Automation not only minimises human errors - a primary source of breaches - but also introduces an added layer of security by flagging unusual activities.
2. Seamless data transfers are essential
Sidestep data import/export processes known for data mishandling. With 79% of 2022’s reported breaches stemming from phishing attacks, sharing data via emails or links is perilous. Instead, prioritise vendors offering API integrations that sync with existing HR systems, thus negating the need for manual transfers.
3. Commitment is non-negotiable
Opt for vendors bearing certifications like ISO 27001. This certification is a testament to a vendor’s dedication to data security, ensuring confidentiality, integrity, and availability.
4. Experience matters
Inexperienced staff can be cybersecurity liabilities. Ensure your vendor’s team is seasoned and understands the intricacies of payroll processing.
5. Fit with your business
The right software should resonate with your specific needs, from user count to departmental needs, scalability, geographical compliance, and pricing.
6. Understanding features and automation
Choose software that manages deductions, tracks attendance, handles bonuses, and offers employee portals. It should integrate with accounting tools and pension providers, emphasising top-tier security and cloud-based solutions.
7. Take a result-oriented approach
Your chosen solution should streamline onboarding/offboarding, assimilate seamlessly with existing systems, enhance employee experience, be time-efficient, minimise errors, have an intuitive interface, and most crucially, ensure secure communication to fend off potential data breaches.
These data breaches are becoming disturbingly frequent and companies can’t afford to be complacent. Modernising payroll systems is not just about staying relevant, it’s a strategic move to safeguard sensitive data, financial assets, and your reputation. The choice seems pretty simple, either innovate and secure or risk becoming the next unfortunate headline.
Article originated in Global Banking & Finance Review
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