Top 5 Security Concerns With Cloud Based Payroll Answered

November 24, 2016

Top 5 Security Concerns With Cloud Based Payroll Answered

Corporate online payroll services are gaining popularity in the recent times with more and more companies migrating their payroll to the cloud. With so many advanced features and application modules, these cloud based payrolls have indeed made the payroll processing less cumbersome and less complicated.

Today, there are so many web based solutions providers for payroll services for small business in the market and so many options to choose from. This often leads the SMEs and small businesses to contemplate on what would work best for them and if these solutions are really as safe as they claim to be.

There are many news making rounds in the media world linked with online hacking and data phishing, which adds to the concerns of these companies about their data security. The data, which is handled by the payroll department, is so sensitive that any kind of breach of privacy will result in a huge loss to the company. In such cases, it is quite justified that the management trust their internal servers and in-house payroll process over the cloud based payroll solutions.

But with an increasing number of companies choosing SaaS payroll over the traditional method, there is an awareness created among the business owners and SMEs about the benefits and security advantages cloud based payroll has.


Top security myths busted: 

With many companies opting for web based payroll solutions, it has become very evident that this mode of payroll processing is not only convenient and reliable but also secure. Let us look at some very common security based myths:

1.    In-house security audits are reliable:

There is a common notion among businesses that an internal security audit is more secure than a web-based one outsourced to someone else. After all, the management would care more about their data security than an outsourcing company, right? That’s not true. Payroll processing service providers charge a fee for their security audits and they are more regular and reliable than the in-house audits. The entire auditing process is more elaborate and detailed, leaving very less or no chance of security breach. There is a regular check on each of the safety protocols set by them to ensure the client’s data are safe and protected at all times.

2.    With traditional payroll, we can have multiple back-ups and physically see the storage system:

True, in a traditional payroll process, management has access to all the physical data on their servers and can also have multiple back-ups to ensure there is no loss of data. But practically what we are talking about is loads of storage space. There is also a risk of the server storing the data crashing or a corruption of the hard-drive. Even the physical records like forms and employee files have a possibility of getting lost or falling into wrong hands. Unless one can be too sure of the in-house security in the company, it is safer to leave the securing of sensitive data like payroll in the hands of experts.

Data stored on the cloud based payroll solutions will not need any storage space and the management need not worry about processer slowing down due to huge volumes of data. The corporate online payroll services provider will host all the hardware on their location and the businesses can access data through web based or mobile based applications designed by them. There is no physical access to the data and the security is completely in the hands of the service provider. The management can have a detailed understanding from the service provider about their safety measures and back-up plans, in case of security breach, to understand the amount of security they provide.

3.    In the traditional processing, there are dedicated employees taking care of security threats and scans:

Cloud based payroll system decreases the burden of frequent manual back-ups and security checks, which is required in the traditional in-house payroll system. There is a dedicated team which is responsible for scanning and keeping the security and software updated. The security scans are constantly run and checked for any threats or security breaches.



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Payroll processing service providers have high level security precautions like session’s time out, identification, biometric authentications and many other safety features which are not there in the traditional payroll processing method. Also, in addition to the dedicated software updates and anti-virus scans round the clock, these payroll processing service solutions provide an additional security through Secured Sockets Layer (SSL) Technology, which provides encrypted links between server and the browser used to go online.

4.    There is someone accountable within the organisation for data security in the traditional method:

Unless the management is looking out for someone to blame in case of security breaches, this accountability is not of much use. Accountability can in fact become a liability for the employers as they have to constantly monitor and keep finding means to secure the data from prying eyes.

Management can seek the services of top online payroll service providers and understand the mode of data storage. Some service providers provide multi-tenancy or hosting more than one client’s data in one server. For highly sensitive data or management dubious about security, in such cases they can ask for separate API, separate cloud or separate physical storage. Sitting with the service provider to understand the various security measures in place can help the management in understanding better and feeling more confident while investing in cloud based payroll solutions.

5.    Restriction of data access is not very easy over cloud:

This is definitely not true. Each application on cloud based payroll solutions has its own way of data access restrictions. It can administer the exact amount of data and the usage a particular user can access and use. This ensures that there is no security breach and the entire process is transparent. Any unusual or unsolicited access of data can be tracked down and identified. Some small business payroll solutions also provide their clients with a customised user access level, which helps them in retaining certain level of control on the data access.

Data security will be an issue irrespective of the mode of payroll processing implemented in an organisation. Since security is a two-way term, apart from securing data during processing and storage, it is important that the employees also understand the sensitive nature of the data handled by them. Hence, employees are advised to use best market advocated practices like using strong passwords, downloading or accessing payroll applications in a secure network, without entering sensitive payroll information or other personal information in forms or links attached in emails. One should also ensure that employees use double authentication for payroll and other applications involving personal and sensitive data so as to minimise unauthorised use.




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November 24, 2016

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