Risks to Data Security When Employees Leave: How to Mitigate

In today's digital age, where data serves as the backbone of business operations, ensuring robust data security is paramount. As businesses rely more heavily on digital information, the risk of data breaches becomes ever more concerning. One often underestimated threat to data security emerges when employees, who have had access to sensitive information, depart from the company. The departure of an employee, whether through voluntary resignation, lay-offs, or termination, can potentially create vulnerabilities that malicious actors might exploit. 

In this article, we will delve into the risks to data security that can arise when employees leave and provide practical strategies to mitigate these risks effectively.

The Data Security Threats from Departing Employees

When an employee departs a company, they leave with more than just personal belongings and farewells. In today’s digital age, the risk of data breaches, intentional or accidentally done data theft, social engineering attacks and data leaks increases substantially during the employee's exit process. Understanding these data security threats is paramount for any organization, irrespective of its size. Through this blog post, we aim to shed light on the potential hazards and their motivations, and highlight differences in risks based on varied circumstances of an employee's departure.

Intentional Data Theft

Unfortunately, not all exits are amicable. Whether due to a contentious working relationship or other motivations, departing employees might harbor intentions of stealing company data. This risk is especially significant among those who have access to sensitive information, intellectual property, or trade secrets. The reasons behind such actions vary. Some are fueled by financial gain. Selling critical company data in the black market or to competitors can be lucrative. Others are motivated by revenge. A disgruntled employee, perhaps feeling slighted by their superiors or colleagues, might feel justified in their actions as payback. 

Moreover, some employees might take valuable information with the intent of gaining a competitive edge in their next role. For instance, a salesperson might steal a client list to give themselves a head start at their next position, or a developer could take source code to speed up their projects in a new job. Encryption insecurity may also occur in some of these cases.

Negligence or Leakage of Data Accidentally

Not all threats to data security are malicious in intent. Often, data breaches occur due to simple negligence or oversight. Employees might forget to return company-owned devices, or perhaps, in the rush of wrapping up, they might mistakenly email confidential files to personal accounts for later reference. Such breaches, though unintentional, can be just as damaging. Consider, for instance, an employee who keeps a company laptop after departure, forgets about it, and then disposes of it improperly. That device, if it ends up in the wrong hands, can expose a treasure trove of sensitive information.

Risks Vary by Departure Circumstances

It's essential to recognize that not all departures pose the same level of threat. Let’s break this down:

• Layoffs: Often unexpected and emotional, layoffs can elicit strong reactions from employees. They might feel betrayed or unfairly treated, especially if there's a perception of inadequate communication from management. The risk of both intentional theft, social engineering attacks and negligence is heightened under these circumstances, emphasizing the importance of human risk management.
• Voluntary Resignation: While typically less fraught than layoffs, these departures still carry risk. Employees might take data anticipating future needs or out of mere oversight. Furthermore, if the employee is moving to a competitor, the temptation to carry along a few files for a competitive edge might be strong.
• Termination for Cause: Arguably, these departures pose the most significant risk. An employee terminated for reasons such as performance issues, policy violations, or misconduct might harbor ill feelings towards the organization, potentially leading to malicious acts.

Behind the Motivations

Understanding why employees might be tempted to commit data theft through breaking the encryption of the data center can help in mitigation. Often, it's not just about the immediate financial gain or revenge. Factors such as job market competitiveness, personal financial pressures, or even workplace cultures that do not foster loyalty and trust can play a role.

In the high-paced corporate world, information is power. For someone just laid off or heading to a competitor, the data they have access to might seem like their most valuable asset, a bargaining chip, or a safety net. For others, past perceived wrongs and injustices can fester, leading them to justify their actions as a way to settle scores.

Types of Data at Risk

To begin with, comprehending the specific types of data that could be jeopardized, such as risks to data security, is paramount. This foundation not only helps us understand the magnitude of the risk but also aids in tailoring our protective measures. Join us as we delve deeper into the various categories of data that are often susceptible:

Customer Data

Central to any organization's success is its customers. Hence, data pertaining to these customers is akin to a goldmine. This category includes a wide spectrum of information—from personal details to purchase histories. Just picture an employee from the marketing or sales division departing with a comprehensive list detailing your customers' inclinations, previous purchases, and even personal contact information. The repercussions are two-fold. On one hand, such information, if sold to rival companies, could severely hamper your market share. On the other, this data in malevolent hands could pave the way for fraudulent activities, including identity theft.

• Hypothetical Scenario: Picture Jane, an astute sales executive. On moving to a rival firm, she carries along the extensive customer data she had access to. Leveraging this information, the rival firm rolls out irresistible offers specifically tailored for these customers. The end result? A severe dent in both the revenue and the reputation of Jane's former employer.
• Company Intellectual Property (IP): Often serving as the backbone of a company's innovative edge is its Intellectual Property (IP). This broad category encapsulates everything from patented technologies, guarded trade secrets, intricate blueprints, to proprietary software. These elements form the essence of a company's unique identity in the market. Now, imagine the gravity of the situation when an employee, deeply entrenched in research and development or product design, decides to exit. The looming danger is the potential leak or misuse of this invaluable IP.
• Real-world Implication: Consider Alex, a prodigious software developer. Upon his exit from a renowned tech firm, he embarks on a new entrepreneurial journey. However, he integrates fragments of the code he previously developed into his new products. This blatant infringement could result in extensive legal battles, monetary losses, and a tarnished reputation for his erstwhile employer.

Financial Data

Often overlooked, yet supremely crucial, is the financial data that certain employees have access to. This isn't just about the company's profit and loss figures. It's about intricate details like profit margins, specific sales data, projected revenues, and even confidential employee salary details. If manipulated or disclosed, this information could wreak havoc. Whether it's being used for sinister activities like insider trading or simply giving a competitor an undue advantage, the consequences can be dire.

• Hypothetical Scenario: Meet Sam, a sharp financial analyst privy to the intricate details of an impending merger, which is still under wraps. Just before his exit, he clandestinely divulges this information to a close acquaintance. This insider information, when acted upon, jeopardizes the company's stock market standing and could tarnish its hard-earned reputation.
• Strategic Plans and Internal Communications: Beyond the tangible data, there's also intangible information that forms the lifeline of an organization. This includes future blueprints, marketing ploys, upcoming product launches, and even candid internal communication. Such data can provide competitors with insights into the company's forthcoming strategies or highlight potential vulnerabilities.
• Real-world Implication: Take Rita, for instance, a seasoned project manager. Among her files are emails detailing the meticulously planned launch of an avant-garde product. After her resignation, she discreetly passes on this information to a rival firm. Armed with this knowledge, they can effortlessly design counter-strategies, rendering the original plan ineffective.

Data Security Best Practices for Departing Employees

When an employee departs, either by choice or otherwise, it presents potential risks to data security. The following strategies serve as a guide to ensuring the prevention of company data, so it remains confidential, secure, and untouched during this transitional period.

Develop a Comprehensive Offboarding Policy

Every organization should have a robust offboarding policy in place. This policy guides us through the process of ensuring that a departing employee doesn't unintentionally or intentionally take sensitive data with them. Key elements to include in such a policy are:

• Asset Collection: This ensures all company assets in the possession of the employee are returned.
• Access Privilege Disabling: Prevention of the former individual from accessing company systems.
• Legal Compliance: Ensures all processes are legally compliant, protecting both the company and the departing employee.

Conduct an Exit Interview

The exit interview is not just a formality; it's an opportunity to identify potential data security threats. Questions to consider include:

"Have you downloaded or transferred any company files to personal devices or accounts?"

"Do you have any pending tasks that require data access?"

"Are there any company-related files or data with which you were working that we should know about?"

Gathering this information will provide a clearer picture of the departing employee's data-related activities and if there's any cause for concern.

Collect Company Assets

When an employee departs, whether through resignation, retirement, or termination, the focus often narrows to administrative procedures such as exit interviews and final paychecks. While these are undoubtedly important, another crucial factor demands attention: the retrieval of tangible assets. These assets include ID cards, company-issued devices, access badges, and physical documents. It might not be immediately obvious, but these seemingly mundane items can harbor substantial data security issues, if they fall into the wrong hands.

Think about it – an employee's ID card can grant unauthorized access to various areas within your organization. Company-issued devices, such as laptops and smartphones, could potentially contain sensitive data, proprietary information, or confidential client details. Even physical documents left unattended might carry confidential data that could be exploited by malicious actors.

To ensure a comprehensive approach to data security during employee departures, creating a well-structured asset retrieval strategy is paramount. Here's a step-by-step guide on how to effectively mitigate data risks associated with tangible assets:

Step 1: Compile a Comprehensive Checklist

Before an employee's departure, it's essential to compile a detailed checklist of all the assets they were provided during their tenure. This could include items such as company laptops, access cards, security tokens, keys, and any other equipment relevant to their role. By creating a comprehensive inventory, you establish a clear baseline to track the return of these assets.

Step 2: Conduct a Thorough Exit Review

As part of the departure process, conduct a thorough exit review with the departing employee. This review should involve a physical inspection of the items on the checklist. Encourage open communication during this review, where the individual acknowledges the return of each asset. Address any discrepancies or data security concerns that arise during this process.

Step 3: Implement a Check-Out System

Consider implementing a check-out system that documents the return of each asset. This could involve a designated exit coordinator responsible for verifying the return of assets and obtaining the employee's signature as confirmation. A digital or paper trail of this process adds an extra layer of accountability.

Step 4: Securely Store or Dispose of Assets

Once assets are retrieved, securely store them in a designated location, or follow proper protocols for disposal. For instance, sensitive documents should be shredded, and electronic devices should be properly wiped or recycled.

Disable Access Privileges: Immediately after the employee's departure, disable their access to all company systems, emails, databases, and networks. It's easy to overlook an account or two, so it's crucial to have a comprehensive list of all accounts and resources the employee had access to, ensuring that no stone is left unturned.

Review and Update Permissions: Once the immediate access points are disabled, delve deeper. Who had access to which databases, folders, or files? Ensure that any data the departing employee had access to is reviewed, and permissions are revoked or adjusted as necessary.

Password Reset Reminders: Resetting passwords is an essential step in the offboarding process. To ensure this step isn't overlooked, set up a system of reminders prompting IT staff or managers to change passwords for systems the departing employee accessed. This extra layer of security ensures that even if login details were shared or compromised, they would no longer pose a data risk.

Backup and Archive Data: Data associated with the departing employee should be backed up and archived securely. This ensures that if there's ever a need to reference their work in the future, it's readily available. Utilize secure cloud storage solutions or encryption of physical storage devices, always prioritizing unreadable data for avoiding data security risks.

Monitor Data Access Logs: While it's essential to disable access and reset passwords, it's equally vital to monitor data access logs during the weeks following an employee's departure. Look for unusual patterns, accesses at odd times, or from unfamiliar locations. These could be signs of unauthorized access, encryption breakdowns or potential data breaches.

Maintain Legal Compliance: Lastly, we must ensure that the entire offboarding process respects privacy laws and encryption regulations. This not only protects the company from potential legal repercussions but also ensures that the departing employee's rights are upheld. Always consult legal counsel or use resources to stay updated on the latest data protection laws and encryption regulations.

Proactive, Human-focused Data Protection With Living Security

Living Security is founded on helping identify and mitigate human risks—which are part of the majority of data breaches—and as employees leave your organization, these risks can spike. 

Unify, Living Security's Human Risk Management platform, pulls data from a variety of your internal systems so you can identify and proactively act upon human risks in your organization. On one pane of glass, you can see members of your organization that may put your data at risk, such as: 

• Access to Sensitive Data: Which "privileged users" have been moving data to private accounts? 
• Data Leaks: Who is sharing data with non-employees? 
• Data Removal: Is an employee deleting data without authorization? 

When you factor in a reduction in force plan or other personnel changes, you can easily monitor data movement and other potentially suspicious activities.

Unify monitors potentially risky behavior so you can take action. Unify extends the value of your existing technology by showing you data at the human level. With this data, you can take action, such as changing access for some users, requiring MFA, or deploying training via Living Security Training to those who need it.

See Unify in action! 

Sign in to see how Unify helps you quantify human risk, engage the human, and measure behavior change. 

Learn more about Unify and human risk management. 

FAQ on Risks to Data Security When Employees Leave and How to Mitigate Them

Why are Risks to Data Security a concern when employees leave?

Answer: When employees leave, there's potential for them to take sensitive data or company information with them, either intentionally or inadvertently. They may have had access to proprietary information, client data, or strategic plans, which could be used by competitors or misused in other ways if not properly managed.

What are the primary risks associated with departing employees?

Answer: The primary risks include:

• Unauthorized access to sensitive data after departure
• Transfer of proprietary or sensitive data to personal devices or external accounts
• Potential disclosure to third parties or competitors
• Leaving backdoors or vulnerabilities in the system

How can companies take prevention of unauthorized data access after an employee leaves?

Answer: Companies can employ measures such as revoking access credentials, regularly auditing user activities, and ensuring prompt deactivation of accounts associated with departing employees or opting techniques like data masking.

Are exit interviews important from a data security perspective?

Answer: Absolutely! Exit interviews allow employers to remind departing employees of their non-disclosure agreements and other obligations. They also provide an opportunity to understand what data or information the employee had access to and to retrieve any company property or data.

Should we be concerned about employees moving to competitors?

Answer: Yes, especially if they had access to proprietary data or trade secrets. It's wise to have non-compete and non-disclosure agreements in place, and to remind employees of these agreements upon their departure.

What's the role of IT in ensuring data security during employee transitions?

Answer: IT plays a pivotal role. They ensure that all digital footprints of a departing employee are managed appropriately – from deactivating accounts, monitoring email forwarding rules, to wiping company data from personal devices.

How can companies ensure that employees don’t leave with important data on their personal devices?

Answer: Implementing a robust Bring Your Own Device (BYOD) policy can help. This includes clear guidelines on accessing company data, periodic audits, and the ability to remotely wipe data from personal devices if necessary.

Is training significant in safeguarding company data when employees depart?

Answer: Definitely. Regular training ensures employees understand the value of data and their responsibilities towards safeguarding it. When they recognize the implications of data breaches, they're more likely to be cautious and compliant.

How can we monitor and ensure that former employees aren’t accessing company systems?

Answer: Beyond deactivating accounts, companies should implement system alerts for any unauthorized or suspicious access attempts. Monitoring tools can track IP addresses and activities associated with former employees, helping detect any anomalies.

What if we find out a former employee has breached data security protocols?

Answer: First, assess the extent of the breach and the data compromised. Then, take corrective measures like changing security credentials and notifying affected parties. Depending on the severity, legal action against the former employee may be warranted. Always consult with legal counsel to understand the best course of action.

What measures can we take to educate employees about data security before they leave the company?

Answer: Before departure, we provide employees with training sessions that highlight data security best practices and their responsibilities regarding confidential information. This empowers them to handle data appropriately and reduces the likelihood of security breaches even after they've left the organization.