How HR professionals can use a HCM for data security

A3Logics 24 Jan 2023

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We’re living and working in a time where data security is a risk for all people and professionals. Most workplaces now largely manage their data through digital means, too. Due to the sensitivity of this data and the associated work volume, this puts pressure on human resources (HR) team members. From onboarding new employees to overseeing industrial compliance, the workload of HR professionals is varied, demanding, and requires a high attention-to-detail. As employees responsible for a range of critical and often confidential processes, even with their training there can be human error that compromises data security.

Fortunately these intersecting challenges associated with HR can be overcome. Existing and emerging technology tools can be used that protect data while also improving the workflow of HR team members. The go-to solution for this is a Human Capital Management software system (HCM system). With features including secure platforms, integration, and an all-in-one design, these systems offer simplification of operations, data security, and employee services across organizations.

How exactly does an HCM system work as an HR solution?

An HCM offers workforce management solutions that, until now, most people have only dreamt of. This is because HR professionals are so often dealing with extraordinary volumes of employee and organizational data — an approach that’s “rapidly evolving” — that requires dual-category compliance for both data protection laws and business privacy. Whether it’s the risk of simple human error or unintentionally offering cybercriminals an opening for attack, weaknesses in HCM processes mean that software solutions are an essential way to: secure, organize, protect, and streamline for the good of all stakeholders. Globally, these HCM SaaS solutions continue to expand leading the ‘HR Tech’ space to be valued at $23.98 billion USD in 2022 and projected to reach a value of $39.90 billion USD by 2029, with a CAGR of 7.5% for the forecast period.

HR professionals have experienced extensive digitization in their work management throughout the 21st century with the most recent changes being attributable to Covid-19. Fortune Business Insights report that the global shifts in employment opportunities and automation of the work of HR professionals are directly attributable to how HR Tech is growing. In a 2022 report, they also acknowledged that the Covid-19 pandemic contributed to how HR utilizes this technology saying, ““Further, post COVID-19, enterprises are expected to prioritize investments in technologies such as cloud, artificial intelligence, and machine learning to streamline business processes and reduce cost, which is projected to provide significant opportunities for HR technology vendors.”

As an HR solution, the HCM system supports the following organizational interests:

File and database management
Recruitment and hiring
Onboarding and training
Benefits administration
Payroll including timesheets and attendance documentation
Employee services dashboard
Internal reporting and analytics data
Compliance for privacy, employment, and industrial laws
Budget management
Enhanced centralization of data

It’s important to note that the features of each system are not identical and organizations looking to invest in a particular type of product should be diligent in how they research and choose the system.

What are the organizational benefits of HCM solutions for end-to-end cybersecurity processes?

In the 2020s, an HCM software solution plays a major role in reducing the risk of employees carelessly or mistakenly sending sensitive information. The system infrastructure is designed to make business operations more centralized, this in turn can deter hackers and minimize the points where data leaks can occur. The LinkedIn article describes how this system helps strengthen cybersecurity processes based on how it supports overcoming user error and the everyday network issues that afflict organizations. They say that in terms of protecting sensitive data, an HCM revolutionizes access to key files due to how, “…By making it accessible to the right people through a central HR system you are allowing more people to make good use of the data you hold”. The use of an HCM software solution in tandem with strong cybersecurity infrastructure and user protocols promises impressive strategic benefits for all stakeholders including:

Limiting data breaches and promoting responsible data management
Deterring targeted attacks
Introducing unifying user language and practices for securing confidential data

How does an HCM solution specifically improve data security?

Data security is a concern for everyone and rightly so when we take into account the scope of personal and professional data held in workplace databases all over the world. In the worst-case scenario, the workplace data breach compromises sensitive organizational data as well as the private organizational data that covers their operations inclusive of employees. This worsens again if organizational data covers client information — such as with the Optus data breach in Australia — and results in third-party vulnerabilities. By design, a well-conceived HCM software solution will begin to clean up the existing systems for data storage, data sharing, and data access. What this looks like, syncHR says is, “An HCM system that privileges access to sensitive data and centralizes it in a single system reduces the risk of someone accidentally sending sensitive information to the wrong person or place.” The technical features of the HCM mean that it is a secure platform that replaces vulnerable API connections and data transfers; instead, HR and employees can access data directly rather than use intermediaries that can be targeted by hackers or leak data inadvertently.

Due to how a centralized HCM SaaS platform helps to target vulnerability and limits possible entry points for a breach, the user experience is improved and this frees them to focus on other sound cybersecurity practices. This is where HCM characteristics improve data security with good digital hygiene; on the user level, the portal system of a quality HCM solution offers these additional high-level security benefits:

Monitoring of login and account usage
Automatic password encryption
Multi-factor authentication
Network perimeter security
Security processes analytics for review then resolution or improvement

Looking ahead to the next generation of HCM platforms, these systems will only continue to keep improving. Cloud-based HCM SaaS products are expected to experience the most growth overall due to the rise in remote and hybrid work, plus the low costs for implementation versus traditional site-based server HCM products. The data security features of this generation will be in line with the data protection policies of each region making the robust capabilities of HCM SaaS products even more valuable. Trust around data handling is guaranteed to become an evermore precious commodity with credibility, fines, and employee resignations just some of the costs of data breaches in the years ahead which reinforces the fundamental centrality of HCM software for every organization.

An end-to-end HCM software solution gets business done and supports every team member including HR

Ultimately a quality HCM solution can ensure that common weak points are targeted and HR are empowered to fulfil their role in the best way possible. After all, HR team members are largely the first touchpoint between new hires and the organization so their experiences are largely perceivable to other team members. In many ways, investing in their workflow invests in everyone’s workflow and the entire organization’s workflow. Equally, protecting the interests of internal and external stakeholders is front of mind when designing cybersecurity solutions so there needs to be alignment at all levels of the organization.

There is so much at stake when it comes to a secure and successful introduction of an HCM. As we look ahead to the future, cybersecurity is guaranteed to remain a threat to all organizations. Investing in tools that cover data security as well as supporting employees is the way to go. Choosing and implementing wisely is of inherent importance, so using an HCM in conjunction with high-level local and remote network security is imperative. From here, maintaining systems and reviewing insight data is crucial as well; constantly refine the functions to have optimal outcomes in: