HR Glossary

Data breach

What is a data breach in HR?

A data breach in HR is when a hacker gains unauthorized access to an employee's confidential and sensitive information such as their personal details, bank information, social security numbers, medical information, performance reviews, and more to steal it. 

What causes data breaches?

Here are some common actions that often lead to a data breach:

• Cyber attacks, including phishing, ransomware, malware, denial of service, and social engineering attacks, could result in a data breach.
• Human errors, such as unknowingly sharing sensitive information with the wrong people, sharing sensitive information without proper encryption, having weak passwords, and neglecting security protocols, could cause a data breach.
• Insider threats could result in a data breach when dissatisfied employees or third-party vendors mishandle employee data.
• Theft of hardware devices such as laptops, hard disks, USB drives, and more could result in hackers gaining access to sensitive information.
• Outdated tech tools may easily become vulnerable to data attacks since it may lack advanced security controls and encryption. 

How to tackle a data breach?

Here's how HR teams can tackle a data breach: 

1. Inform IT, legal, and security teams about the data breach.
2. Coordinate with those teams to identify the data that has been compromised and the extent of the breach.
3. Keep affected employees informed about the breach. Be ready to address their concerns and queries.
4. Report the breach to the concerned legal authorities. Make sure you understand the legal consequences involved.
5. Determine the root cause of the breach thoroughly and patch the vulnerabilities
6. Document the cause of the breach and actions taken to combat it
7. Establish strong protocols to prevent such incidents in the future

What are the consequences of a data breach?

Here are some common consequences associated with a data breach

• Damage to reputation: 

  A data breach could highlight that the organization doesn't have proper security protocols in place to improve data security. Employees, customers, partners, candidates, and other stakeholders may lose the trust they have in your organization, affecting your organization's reputation. 

• Financial losses: 

  According to an IBM report, the average cost of a data breach in 2024 is 4.88M USD. The cost of breach investigation, compensation to affected employees, legal penalties, legal fees, and more could make the breach super costly. 

• Lawsuits: 

  Organizations have to deal with lawsuits from the affected parties. 

• Loss of data: 

  Data breaches could result in HR teams losing access to important employee records and payroll data, which could have severe legal consequences as well as delays in certain HR processes.

• Operational disruptions: 

  Critical resources may have to work on managing the consequences of the breach instead of focusing on their everyday responsibilities. 

How can HR teams prevent data breaches?

• Enforce strong cybersecurity policies

  Establishing robust policies and procedures is crucial to protecting your organization from cybersecurity threats. Implement role-based access controls to restrict sensitive employee data to authorized personnel only. Enhance login security with multi-factor authentication. Promote the use of strong passwords among employees and enforce stringent encryption protocols for protecting sensitive information.

• Educate employees

  Keep employees informed about the possibility of different cybersecurity attacks including phishing, social engineering attacks, malware, ransomware, and more. Help them distinguish between spam messages with suspicious links and authorized messages and emails. Let them understand how to report in case of a cybersecurity attack. 

• Develop a breach response plan

  Develop a plan that elaborates on everything that has to be done in case of a data breach. Define roles and responsibilities so that everyone has a clear idea about who has to communicate about the attack, who has to coordinate with the legal team, and who has to perform the data analysis. This will help you act swiftly and prevent any further damage. 

• Run regular audits

  Make it a point to organize audits regularly to identify and fix any vulnerabilities. Check who has access to sensitive data and ensure that your data handling procedures are fool-proof. Check with third-party vendors and partners to ensure that they have data security processes in place to manage and process your data. If you're using HR tech tools, assess its security policies to ensure compliance.