How HR Teams Can Use Managed Applications to Improve Compliance and Security

HR teams are under greater significance in verifying compliance and security as more regulations emerge and new threats arise. Most HR departments are unable to manage compliance and security manually anymore. Thankfully, there is a new generation of cloud-based, managed HR applications that bring automation, centralization, and sophisticated controls that can greatly ease the HR staff’s load.

This article examines key challenges that the HR team has to face in the governance, risk, and compliance (GRC) of HR. It suggests how the right technology approach can overcome those challenges. Topics covered include:

• Common compliance pitfalls for HR teams
• Rising data security threats targeting HR systems
• Capabilities required of next-generation HR platforms
• Unifying policies, procedures, and controls
• Automating audits and reports for oversight
• Advanced authentication and access controls
• Encryption to protect sensitive employee data
• Integrated threat detection and response

By properly managing applications or using managed application services, HR organizations can decrease the risk of incidents and fulfill their obligations around privacy and security.

The Compliance Burden for HR Teams

There is a lot that HR teams have to comply with when it comes to employment and its related laws and regulations, as well as impressive security postures. Some of the most pressing compliance concerns include:

• Data privacy regulations like GDPR and CCPA
• Industry regulations such as HIPAA (healthcare) and PCI DSS (retail)
• Local, state, and federal labor laws
• Equal employment opportunity rules
• OSHA employee safety mandates
• Requirements around retention of employee records

The exercise in complexity is tracking new and evolving compliance requirements across locations. For example, after Brexit, UK data protection rules are in conflict with GDPR in the EU. Such changes ripple through multinational HR departments trying to adjust policy, systems, and reporting.

Many multinational companies prioritize compliance, but managing it consistently across different regions remains a challenge, especially for HR.

Failing to meet regulations can lead to severe penalties. For example, healthcare organizations recently faced significant fines for mishandling sensitive data.

HR teams also face growing security risks. Cyberattacks often target employee information, and mistakes made by staff are a common cause of data breaches. Additionally, insider threats, whether intentional or accidental, remain a serious concern.

Lacking integrated systems and defined controls, HR teams often rely on manual review and oversight:

• Policies sit in Word docs and PDFs across file shares.
• Access management uses native interfaces or spreadsheets.
• Audits mean combing through emails and folders.

Such fragmented approaches no longer suffice, given expanding regulations and threats. HR requires a better solution.

Key Capabilities of Next-Generation HR Platforms

Cloud-based human capital management (HCM) suites now provide integrated GRC capabilities that can ease the chaos for HR teams. The most advanced solutions centralize the following:

Policies, Procedures, and Controls

• Unified libraries hold all rules and guidelines.
• Multi-level approvals enforce control requirements.
• Automated policy distribution across the organization.

Audit Trails and Reporting

• Logs of all user activity for oversight.
• Dashboards to track incidents and changes.
• Automated reports for compliance.

Access and Authentication

• Role-based access controls.
• Advanced multi-factor authentication.
• Single sign-on across integrated apps.

Data Protection

• Encryption for data-at-rest and in transit.
• Tokenization to remove identifiable data.
• Backups and redundancy to ensure availability.

Threat Management

• AI/ML anomaly detection for insider risks.
• Data loss prevention controls.
• Integrated cyber threat intelligence.

With these capabilities, HR staff spend less time struggling to manage compliance and security themselves. The following sections highlight transformative outcomes:

Unified Policies and Controls

Fragmented policy management creates huge gaps. HR teams often track rules across multiple documents and platforms. Without a “single source of truth,” organizations struggle to keep guidelines consistent and current.

Next-gen HR suites centralize policies, procedures, guidelines, and controls within a single, searchable system. Authorized admins can quickly update documentation while automated workflows push changes out across the organization. Integrations also embed controls directly into related business applications.

For example, updating a global background check policy also automatically updates forms and requirements in the applicant tracking system. Adding a new manager approval control for employee status changes enforces that rule in the HR case management tool.

Central policy hubs also enable multi-level approvals. HR can mandate various digital sign-offs to meet audit obligations or match internal risk levels set by GRC analysts.

Automating policy distribution in this way provides control and oversight that is not possible with manual methods. HR leaders gain confidence that consistent, compliant practices happen across the organization in line with centralized guidelines.

Automated Audit Trails and Reporting

Essential oversight for compliance is to track user activity and changes. Comprehensive audit logs are also used to investigate incidents. Instead of searching mailing lists and file history trails, HR should have something instantly available to them.

This is achieved by modern platforms logging all transactions, data edits, and access events to integrated systems. APIs transmit activity data from applications into the central platform. This is then organized into detailed audit logs using analytics engines that can report on custom details.

Configurable dashboards give HR teams quick visibility into:

• User behavior anomalies indicating risks
• Surges in incidents needing investigation
• Policy setting changes
• Access and permission changes
• System outages or errors

Platforms can also schedule automated reports required for different compliance needs. For example, a monthly HIPAA audit report might track:

• New user access reviews
• Password resets and changes
• Multi-factor authentication adoption
• Attempted access denials
• Application errors

Automated, centralized audit trails save HR staff from manual reporting needs across all obligations and oversight programs.

Advanced Authentication and Access Controls

Fragmented authentication systems using basic passwords lead to security gaps. Employees reuse simple passwords, which are then compromised or stolen through breaches. Lacking integration between apps also heightens risks.

Core HR platforms now provide single sign-on (SSO) access across all managed suite applications. This ensures users have one secure master credential. SSO also means revoking access in one place blocks that user across all tied systems.

Equally important, modern identity and access management (IAM) provide strong, multi-factor authentication (MFA) options:

• Security keys (FIDO)
• Authenticator apps
• Biometrics
• SMS/email codes
• Built-in MFA
• Adaptive authentication

IAM also centralizes permission controls through user roles. Rather than relying on complex native access settings, HR admins assign roles like “Recruiter” or “Payroll Manager” to employees. Integrated apps inherit those role rules to grant access to the right features. Revoking a role removes associated application permissions.

These advanced IAM capabilities allow HR teams to securely onboard staff, contractors, and third parties into specific systems based on their job functions. Access gets removed instantly when employees leave or change positions.

Ongoing reviews further help certify proper access by role. Automated reports can identify unused accounts or excessive permissions for cleanup. Such active access governance is essential for compliance.

Encryption to Protect Sensitive Data

Between employee health records, payroll files, and personal data, HR systems contain immense amounts of sensitive information. Encryption provides fundamental protection of data at rest and in motion. Yet, until recently, few HR apps have provided adequate encryption capabilities.

Modern HR suites now feature robust encryption for all stored data as well as transfers between internal apps and external business partners:

• AES-256 or similar algorithms for data at rest
• SSL/TLS for data in transit
• Key management integrated with IAM
• Tokenization to replace identifiable data

Encrypting stored data prevents unauthorized access in the event of lost devices or breaches. Encrypted transfers prevent risky exposure of data moving between apps or shared externally.

Keys should also integrate with identity management to link decryption authorization to user roles and access rules. Deleting a staff account or revoking access removes the keys needed to open protected data.

Another emerging protection method is tokenization, which substitutes sensitive fields such as names, ID numbers, or contact information with a randomized symbol. The data masking limits exposure during transfers or breaches, but it does not stop critical business functions.

According to a 2024 Entrust report, most organizations have previously trusted simple transportation encryption, yet they intend to increase data-at-rest security by 57%. As organizations become aware of risks, encryption usage is increasing in HR systems, the same report found.

Integrated Threat Detection and Response

Despite the fact that cyber risks keep increasing, they do not seem to be consistently mitigating. However, HR teams do not have integrated threat detection or response capabilities. Most modern attacks are beyond basic email filtering and beyond basic antivirus software.

Advanced HR suites increasingly provide threat management directly or through ecosystem integrations:

• User and entity behavior analytics (UEBA) leveraging AI and machine learning spots abnormal access patterns, privileged account misuse, and policy violations. UEBA sends alerts to HR and IT teams for quick investigation.
• Data loss prevention (DLP) tools detect attempts to extract and transfer sensitive information improperly. DLP can block unauthorized emailing or uploading of protected personal records.
• Security information and event management (SIEM) solutions collect activity data across all managed suite applications to feed analytics engines. This further strengthens anomaly detection and response capabilities.
• Tight integrations with leading extended detection and response (XDR) tools share threat intelligence to proactively identify emerging risks targeting HR data.

With advanced protections in place, HR teams spend less time reacting to incidents and auditing basic security controls. Integrated threat management also ensures HR platforms align with corporate IT requirements for cyber resilience.

Key Takeaways and Next Steps

Fragmented systems, incomplete policies, manual reporting, and basic security cannot meet modern governance, risk, and compliance needs. As regulations and threats escalate, HR teams need better tools.

Purpose-built, unified HR suites with native GRC capabilities provide the automation, consistency, and security required in today’s digital environments. Core features include:

• Centralized policies and controls
• Automated audit trails
• Advanced access management
• Encryption protections
• Integrated threat prevention

Naturally, these next-generation platforms further reduce risks, costs, and staff burdens for audits, investigations, reporting, and remediation.

HR leaders should evaluate the compliance gaps that exist, another security vulnerability that needs to be addressed, what integration requirements there are and how to create a phased migration plan. The investment provides for risk reduction as well as operational efficiency for HR teams moving from manual oversight to strategic initiatives.

The more these threats evolve, the more the organizations using these advanced capabilities will be able to stay compliant and resilient while others remain at or near compliance paralysis. It is time to turn on the HR Compliance and Security.