Global Payroll HR

How does an HR Management System (HRMS) Ensure Organizational Data Security?

Nena Petrovic
Global Sales Director
March 24, 2024

The HR management system is the most vulnerable when it comes to organizational data, as HR data contains personal information and vital details about personnel.

The threat to data security is at an all-time high in the current scenario, with so many people working from home on their own devices. To safeguard HR data from threats and illegal access, it’s becoming more vital than ever to put in place procedures that raise data security a notch or two. The current generation of HRMS software has improved data security capabilities to assist businesses in overcoming the challenge of keeping their corporate data safe.

Before we move on to understand how HRMS and payroll solution helps in securing data security, let us first understand what an HR management system is.

What is an HR management system?

A human resources management system (HRMS) is a collection of software programs used to manage human resources and related procedures throughout an employee’s career. An HRMS allows a company to have a complete understanding of its workers while remaining compliant with changing tax and labor rules.

Because they administer day-to-day workforce operations and are responsible for compliance and performance reporting, HR leaders and staff are the major users. HR isn’t the only department that benefits, though.

Employee Self-services for typical activities can empower managers and staff, which is a key selling point for younger hires. An HRMS can be used by executives to generate data on worker trends and their consequences for the business.

Given that HR-related costs are among a company’s most significant, HRMS integration with the accounting system is critical for finance departments. Leading suppliers will go above and beyond basic accounting to assist a business in extracting more financial insights from HR services & data.

Challenges HR management face in Data Security

  • Breach of Personal Information

In cloud-based HRMS, a data breach, also known as a data leak, is a major concern. This happens as a result of cloud computing security breaches. Employee data and other confidential information would be acquired, manipulated, and transmitted by unauthorized people or apps.

  • Service Disruption (DoS)

The DoS cloud assault might bring all cloud services to a halt, making them inaccessible to consumers for some time. The system is fed with large amounts of traffic that cannot be buffered; otherwise, it is crashed by exploiting bugs.

  • Crypto-jacking

Crypto-jacking has grown in popularity in tandem with the rise of bitcoin. Hackers exploit computing resources to conduct cryptocurrency transactions. A crypto mining script is installed in the servers without the permission of the organization. Another critical cloud HR Services security threat has surfaced.

  • Not secured APIs

Unauthorized users could offer data security dangers with IoT solutions, even if an organization’s systems are regarded secure. Sensitive data could be captured and transferred in real-time using IoT sensors and various appliances. Hackers could use this method to steal data by assaulting APIs rather than the cloud itself. 

Benefits of the HR Management System

The most basic benefit of an HR management system is having all of your personnel information in one place. This reduces compliance concerns, provides a comprehensive data collection to support decision-making, aids employee engagement, and makes HR professionals and procedures more productive.

Let’s look at some of the benefits of HRMS services:

  • Better, more in-depth knowledge

Employees and managers create data in a variety of places without an HRMS, including spreadsheets, expense applications, and paper records, making it tough to get a complete picture of labor costs. All data is in a single bucket with a higher level of integrity with an HRMS.

This allows for better and quicker decision-making. It’s also critical to a workforce planning and analytics project, in which a corporation evaluates its current staff and compares it to future demands established by corporate objectives. The capacity to identify and fix skills shortages before they hinder productivity, codify succession plans, and keep a check on labor expenses by assessing how overtime or double-time payments affect financial performance are just a few of the important benefits here.

  • Improved employee engagement

HR managers are passionate about developing and maintaining talent, and an HRMS can help them do just that. HR may develop training curricula, customize learning programs and career trajectories, and establish mentorships using an HRMS. Indeed, the Harvard Business Review proposes that younger employees’ skills development be prioritized and that a mentoring program centered on sharing expertise be implemented.

Workers from Generation Z and Millennials also expect to be asked about their experiences frequently. An HRMS can both match senior people in one department or geography with those who can benefit from a mentoring relationship, conducted virtually, and deliver and tabulate employee satisfaction and engagement surveys.

To acknowledge development milestones, all of these development actions are logged in the HRMS. Employee self-services are more likely to stay on track and loyal to the organization as a result of this.

  • Process efficiency and a self-service culture

Responding to queries or administering significant programs, such as benefits enrollment or performance reviews, can require up to 40% of an HR professional’s time each week—and in many circumstances, employees would prefer to handle the work themselves.

HR can create a knowledge repository within an HRMS so that employees and managers can discover answers to frequently asked issues, and employees and managers can securely access their information, allowing HR to focus on more value-added services.

Furthermore, HR activities that require many levels of approval, such as processing timecards, job requisitions, and time-off requests, can eat up a significant amount of time. Approval workflows in an HRMS and payroll solution automate these and other processes by notifying approvers when it’s their turn to approve (or reject).

  • Lower back-end costs

The centralized structure of an HRMS—especially one provided as a fully cloud-based, software-as-a-service model—requires less hardware, data center space, and IT and development staff resources for maintenance, support, and training from an IT and capital spending standpoint.

This reduces IT spending on HR technology, necessitates fewer help desk workers and improves overall satisfaction among full-time HRMS users, namely the HR team.

  • Faster recruiting

Another area where HR professionals are passionate is attracting top people and establishing your company’s reputation as “the place everyone wants to work.” However, because it’s difficult to acquire insight into the job search process when postings occur outside of the organization, the candidate experience has been largely overlooked. By electronically connecting recruiters and candidates through job boards and mobile applications, and HRMS tackles this challenge, making the process more pleasurable and efficient. This can cut processing time by more than half while also improving accuracy.

How can HRMS safeguard the confidentiality of company data?

HRMS has several robust security mechanisms to protect user data, both on-premise and in the cloud. The security features cover every area of data security, including user data encryption, physical data protection, Employee self-services, controlled data access to prevent unauthorized access, internal security controls, and more.

  • Physical Protection

HRMS assures that only a secure HTTP protocol is used to access the application. Only the required ports are allowed to access the HRMS applications after port-based restrictions are implemented.

For user data safety, the software includes antivirus software, and the Security Center monitors and tracks threats and vulnerabilities. This is demonstrated with the Set IP Address feature.

  • Data Encryption

HRMS uses the 256-bit AES encryption technique to secure encrypted user credentials (Username and Password). GDPRS compliance has been implemented and the application has been configured with an SSL certificate. The application ensures increased security of user data and prevents threats and weaknesses by storing encrypted personal data in the database.

  • Security based on the user

For the security of user accounts, HRMS has created a bespoke password policy, as well as a data deleting policy for inactive users. The Access Right management module also allows for defined application access. The application also uses IP-based restrictions to limit remote server login access to specified IP addresses.

It is not easy or uncomplicated to choose an ideal Human Resource Management System (HRMS), but it must be done correctly. While there are many HR Services & solutions on the market with the best collection of capabilities, picking one that is right for your company can be difficult.

Through the above-mentioned data security measures, TopSource Worldwide can help you. To know more about data security, HRMS, employer of record and payroll solutions visit TopSource Worldwide website or connect with us today!

Remember when you are on a hunt to choose the best and right HR and Payroll Management System, firstly understand what are your needs. List down your requirements and features that you’re looking for and then match it out with your prospective HRMS and payroll solution.


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Nena Petrovic
Global Sales Director
Nena Petrovic is the Client Advisor Team Leader at TopSource Worldwide, a leading Global Expansion services provider. She oversees and guides a team of client advisors, who communicate and collaborate with clients effectively. She is responsible for ensuring the accurate and timely processing of client invoices and payroll, as well as developing strategies and maintaining a client-centric approach.

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