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Is It Safe for IT Companies to Outsource Their HR?

Is It Safe for IT Companies to Outsource Their HR?

When a company fails to keep its clients' information secure, then its reputation inevitably takes a hit. For example, when Yahoo first reported a massive security breach at the end of 2016, its stock shares plummeted. The company's reputation was further damaged when Yahoo estimated that a total of 3 billion accounts had been compromised. 

An IT firm's reputation when it comes to high-quality security is even more critical. IT firms specialize in information security.

At the same time, an IT firm has to manage internal operations just like any other business organization. These operations include human resources. 

IT leaders may wonder if it is safe to outsource their HR processes to a third party. HR outsourcing partners such as Professional Employer Organizations (PEOs) understand the security demands that IT firms must meet. They take precautions so that the risk of outsourcing HR is the same as the risk of implementing an in-house HR solution.

The following information discusses two major reasons why an outsourced HR strategy is an acceptable solution for IT firms.

IT Client Information

Many IT firms may hesitate to outsource their HR processes for fear that confidential or sensitive client information may be compromised on the PEO's end. However, PEOs have zero access to client information. Basically, PEOs would have the same level of clearance that in-house HR teams have — in other words, a total lack of authority and ability to access confidential client information.

HR Cloud-based Software is designed to be an all-in-one HR solution. It is not designed to integrate with other departments or merge with their networks. This means that the outsourced HR partner would not even have accidental exposure to systems where client information is stored. There would be a clear demarcation between the HR Cloud network, and the IT firm's database of proprietary information.

IT Employee Information

IT firms also have to be cautious regarding employee clearance, both in terms of internal and external actors. However, reputable PEOs can alleviate an IT firm's concerns in these areas as well. 

Exposure to External Actors

To prevent the unnecessary exposure of sensitive information to external actors, PEOs will set up HR software, but will not interact with it beyond responding to any requests for training or help from in-house HR team members. This process is somewhat analogous to internal HR professionals requesting assistance from their own HR software's makers.

Since the HR software contains employee self-service and manager self-service capabilities, the PEO is not needed by the IT firm to take advantage of all functions. For example, the client is not required to give the PEO any HR information. Furthermore, once the HR software has been set up, control remains 100% in the hands of the IT firm.

Exposure to Internal Actors

IT firms have reason to fear exposure to internal actors as well as external ones. For instance, a PwC survey in 2015 found that 34% of security attacks worldwide involved current employees and another 28% involved former employees. Understandably, IT executives want to be sure that employee information is kept secure not only from cybercriminals on the outside but from other employees as well.

Fortunately, the HR software used by reputable PEOs is specifically designed with this purpose in mind. As an example, access to payroll information is only granted to specific individuals with proper credentials. Admins can dictate which data, fields, and reports can be altered by a given individual. This is often a safer measure than dealing with paper records that can potentially be viewed and altered by anyone.

Moreover, benefits enrollment information is secured so that only specific individuals can access it. These and other strict protocols ensure that only properly credentialed administrators have the opportunity to view, edit, and transmit sensitive data. 

In practice, a cloud-based solution to open enrollment is just as safe as an intranet-driven system. This is because benefits enrollment data (along with other employee information) still has to be sent to health insurance providers over online channels.

Why IT Firms Can Safely Outsource Their HR Processes

In the final analysis, outsourced HR software does not pose a security risk for IT firms. This HR software is not integrated with systems that store confidential client information, and neither external nor internal actors without the proper credentials have access to sensitive employee data.

The bottom line is that a reputable PEO can help IT firms manage their HR processes without compromising client security. In turn, this means that IT firms can focus on their core competencies without the fear of losing their reputation. In short, IT firms can optimize their operations without sacrificing customer privacy.

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