How to Vet an Outsourced HR Company: 10 Security Questions to Ask

Companies are increasingly turning to outsourced HR services to streamline their human resources functions, reduce costs and gain access to specialized expertise. While outsourcing HR can be a strategic move, it’s essential to prioritize data security and compliance as you vet an outsourced HR company.

After all, HR data is sensitive, and protecting it is crucial. As an expert managed service provider, we have the know-how you’re seeking and will guide you through the vetting process with 10 relevant security questions to ask.

1. What Security Measures Are in Place?

Start by asking your prospective outsourced HR partner about the security measures they have in place. They should have robust security protocols, encryption and access controls to protect your data from unauthorized access or breaches.

2. Is Your Company Compliant With Data Privacy Regulations?

Data privacy regulations, such as GDPR or CCPA, are critical in the HR world. Ask if the HR company is fully compliant with these regulations. A reputable outsourced HR provider should have an in-depth understanding of the applicable data privacy laws and should be able to prove their compliance.

3. How Do You Handle Data Access and Permissions?

Understanding who has access to your HR data and how those permissions are managed is crucial. Ensure the outsourced HR company has a well-defined access control policy to restrict data access only to authorized personnel.

4. What’s Your Disaster Recovery Plan?

It’s essential to have a backup plan in case of data loss, natural disasters or other emergencies. Inquire about the HR company’s disaster recovery plan. They should have redundancy measures and a recovery strategy in place to minimize data loss.

5. How Do You Handle Data Encryption?

Sensitive HR data should be encrypted to protect it from unauthorized access. Ask your potential HR partner about their encryption methods, and ensure they are using industry-standard encryption protocols.

6. Can You Provide a Cybersecurity Incident Response Plan?

It’s not a question of if, but when, a cybersecurity incident will occur. Your outsourced HR company should have a well-documented incident response plan to address data breaches promptly, minimizing potential damage.

7. What Training Do Your Employees Receive?

A company is only as strong as its weakest link. Unfortunately, those weak links can often be employees who lack training in security. When you’re asking questions to effectively vet an outsourced HR company, ensure that the HR company’s staff undergoes regular cybersecurity awareness training and participates in associated programs to mitigate potential human errors.

8. How Do You Monitor and Audit Access?

Regular monitoring and auditing of data access is essential to identify unusual activity. Ask your HR partner about their access monitoring and auditing procedures. They should have systems in place to detect and respond to any suspicious activities.

9. Do You Have a Third-Party Security Audit and Certification?

A reputable outsourced HR company should be willing to undergo third-party security audits and earn certifications that demonstrate their commitment to data security. 

10. Can You Provide References and Case Studies?

Lastly, ask for references and case studies from the HR company’s current or past clients. Speaking with other businesses that have worked with them will give you valuable insights into their security practices and the quality of their services.

Other Relevant Considerations

In addition to these security questions, it’s essential to consider the following factors when you vet an outsourced HR company’s security capabilities:

Communication and Transparency

A trustworthy HR company should be open and transparent about its security practices. They should readily share information about their security measures, policies and compliance efforts.

Customization

Every business is unique, and your HR needs are likely to be, too. The outsourced HR company should be able to customize its services to meet your specific security requirements.

Scalability

Consider the growth potential. Your HR data will continue to grow, and your outsourced partner should have the infrastructure and resources to scale their security measures accordingly.

Long-Term Commitment

Outsourcing HR is often a long-term commitment. Ensure that the HR company is committed to a lasting partnership, which includes ongoing security updates and improvements.

How to Vet an Outsourced HR Company: Next Steps

Vetting an outsourced HR company is a critical process that requires a keen focus on data security. By asking the right questions, you can ensure the safety of your HR data and make an informed decision when choosing an outsourced HR partner.

At OrlanTech, we understand the significance of data security in HR outsourcing. We pride ourselves on our comprehensive security measures and compliance with data privacy regulations. 

Our experienced team is dedicated to ensuring the safety and confidentiality of your HR data. Contact us or book a meeting if you have any questions or would like to discuss your HR outsourcing needs.

We are here to help you make the right choice for your business, combining expertise and a steadfast commitment to data security.