How to Keep Your Employee Data Secure

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Learn what the law says about how to treat employee data, and discover some practical ways to keep staff information safe.

You’re up to date with your data security, right? You always ask for consent before saving customer emails and adding them to your mailing list, and you delete customer data when it’s not needed anymore. You probably even have a fancy system to ensure customer credit card details are fully encrypted.

But what about your employee data? Naturally, you wouldn’t dream of giving out personal information about them. Their addresses and social security numbers are probably looked after better by you than they are by your staff members themselves.

Of course, you keep records of their work, but that doesn’t count. That’s just operations data, isn’t it? Unfortunately, we’re here to tell you this isn’t the case. In fact, according to laws like the EU’s General Data Protection Regulations (GDPR) and the California Consumer Privacy Act (CCPA), employee data is given the same level of protection as consumer data.

Businesses today collect more data than ever before. You may not even think about it, but you probably keep personal and financial information on your employees, their health records, and even biometric data.

Not to mention the reams of data on their digital activities. This is all valuable information to cybercriminals. No wonder then that cybercrime is rocketing. According to IBM’s Cost of a Data Breach Report (2023), a staggering 83% of organizations experienced a data breach in 2022.

So, it’s time to get serious about your employee data protection. In this article, we look at various strategies and best practices and consider practical steps you can take to ensure your employee’s data stays secure.

What Employee Data Do You Collect?

You might be surprised by how much employee data your business collects. Understanding what data you keep is the first step to properly protecting it.

Here are some of the most common types of employee data, along with some specific examples:

  • Personal identification details e. full names and dates of birth
  • Contact information g. home addresses, phone numbers, and email addresses
  • Financial information, such as bank account details and tax information
  • Employment records, like contracts, performance reviews, and disciplinary records
  • Health information, like medical records and disability accommodations
  • Biometric data, such as fingerprints used for timekeeping systems and security
  • Digital activity logs, like email correspondence, network access records, and internet browsing histories

Given this list, you can see why data protection is vital. Much of this is private information, and a breach could seriously impact your employees.

That’s why it’s so important to protect their information. Doing so isn’t just a box-ticking exercise; it can help improve employee engagement by showing them you’re serious about looking after their safety.

Yet many companies forget that employee data is sensitive and treat it differently from customer data. For example, you probably spent time and money finding a trusted provider for your domain registrations—after all, your website handles customer credit card details. Yet how much effort have you put into securing the internal network containing all your employee information?

The Legal Landscape

Law statue

As is often the case, legislation is where things get tricky, as each region has its own specific set of laws on how employee data should be handled. Many companies assume they need to find out what the law states for the area they’re based in and simply stick to those rules. However, this isn’t always the case. For example, you must also follow GDPR guidelines if you employ any EU citizens.

Some companies even think they can ignore data protection laws i.e. that they’re something big tech companies have to worry about, not small to medium-sized businesses. But, as you’ve probably guessed, that’s not the case either.

For example, failing to stick to GDPR can result in penalties of up to €20 million or four percent of your annual global turnover (whichever is higher). Equally, under the Health Insurance Portability and Accountability Act (HIPAA), data protection violations can attract fines of up to $50,000 per violation, with a maximum penalty of $1.5 million per year.

As this proves, the law takes data protection seriously—and so should you.

The good news is that there are ways to ensure you’re on the right side of it, such as implementing top-notch IT security systems and following HR best practices.

Here are some other basic steps you can take to keep your data protected:

  • Conduct a data protection impact assessment (DPIA) to evaluate how personal data is processed and identify risks.
  • Appoint a data protection officer (DPO) to ensure your organization has a designated expert overseeing your policies and approach.
  • Establish clear data processing policies to create transparent guidelines detailing how you handle employee data.
  • Implement security measures to protect data against unauthorized access e.g. encryption and access controls.
  • Run regular training and awareness programs to keep staff informed about their data protection responsibilities.
  • Report data breaches promptly. To comply with breach notification laws, report any breaches within the required timeframe.

Practical Steps for Securing Employee Data

Locked up laptop

As you can see, protecting your employee data isn’t a nicety; it’s a necessity. So, how do you go about securing it? Here are some practical steps you can take to get started.

1. Assess Your Current Data Security

To safeguard the digital security of your business, it’s essential to critically assess the overall state of your cybersecurity readiness. This proactive measure will highlight potential vulnerabilities in your system that cybercriminals could exploit.

Be sure to include all forms of communication when you assess your data security. Businesses often overlook older technology, such as landlines, yet these can be shockingly easy to tap and intercept.

Moving to more modern equivalents, such as encrypted emails or a PBX system for small businesses, can help eliminate these outdated weak spots.

2. Conduct Regular Security Audits

Once you’ve set up a secure system to look after your employee data, it’s crucial to maintain it. Cybercriminals are always looking for new ways to infiltrate your company. They aren’t resting, so neither can you.

3. Restrict Employee Access Levels

According to research by IBM, 41% of all cyber-attacks are committed via phishing, and another 26% result from compromised face-to-face interactions. This means that at least 67% of all cyber-attacks are caused by employees inadvertently giving criminals access to your system.

That’s why the principle of ‘least privilege’ should govern who can see employee data i.e. permission should only be granted on a need-to-know basis. It makes sense—not everyone needs to be able to view staff information, so limit who can limit mistakes.

4. Implement Strong Password Policies

Password graphic

The next step is to ensure the passwords your employees use to access your system are secure. They should be:

  • Mandate a mix of letters, numbers, and symbols.
  • Regularly changed. Implement mandatory password updates every 60-90 days.
  • Discourage the use of the same password across multiple platforms.
  • Saved on password managers. Encourage using reputable password managers to store and generate complex passwords for external sites.
  • Strengthened by two-factor authentication (2FA). Add an extra layer of security by requiring a second form of identification.

5. Encrypt Your Sensitive Information

Encryption transforms readable data into a coded format, which can only be unlocked with the correct digital key. This ensures that even if your data is intercepted, it will be unreadable.


Ergo, moving to a VoIP service provider for calls where sensitive data is discussed is a good idea, as internet phone calls can be encrypted to make it impossible for cybercriminals to listen in.

7. Provide Employee Training

As we discussed earlier, most data breaches result from human error. While restricting access and creating strong passwords are great ways to boost system security, the best thing you can do to safeguard your business from mistakes is to train your employees not to make them.

This is especially important as many employees don’t consider data about their colleagues confidential and may be less likely to use secure systems when handling it. Ingraining this knowledge into your company culture is therefore critical.

Key topics to cover during data security training sessions include:

  • Identifying phishing attempts. These usually come via emails or calls from people claiming to be someone in a position of authority. Teaching your employees to spot them can eliminate a large percentage of data breaches.
  • Secure data handling. Train your teams to avoid insecure forms of data handling when managing sensitive employee data. This might mean using software like Dialpad enterprise VoIP solutions instead of landlines to talk about HR matters, choosing encrypted email instead of regular email or text messages to pass on employee details, and backing up employee data to secure encrypted cloud storage.
  • Password best practices. Explain the benefits and importance of the practices mentioned above too.
  • Reporting procedures. Additionally, ensure your employees are trained to report suspicious activity and know who to report it to if they suspect a data security breach.
  • Use of security software. Finally, make sure employees are trained on any specialist software they have to use (particularly if people work remotely or have their own computer). This might include virtual private networks (VPNs), antivirus and anti-malware software, and RealVNC remote access tools to log in to your system securely.

8. Have a Response Plan in Place

People working on a contract

No matter how good your systems are, breaches can still happen, and it’s difficult to think clearly during a catastrophe.

To avoid this becoming an issue, create a plan for responding to data breaches so you can work quickly and efficiently if disaster strikes and minimize the effects on your employees. A good plan should help you:

  • Identify breaches
  • Contain threats
  • Notify individuals
  • Notify customers
  • Notify the press (in the case of large-scale breaches)

For your plan to work, it should contain all the information someone handling the breach might need. This includes how to get in touch with individuals trained to deal with this sort of situation, clear steps to take, and pre-drafted letters to send to individuals and/or the press.

Summing Up

Looking after your employee data shouldn’t be an afterthought, and there can be severe consequences for those who fail to implement appropriate measures.

Don’t worry though: by sticking to the best practices outlined above, you can stay on the right side of the law and be ready to respond to all eventualities, even if the worst should happen.

That said, if you haven’t yet established a robust security system and protocols to maintain this, now is the time to act.

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