Cloud-based payroll software is the least adopted cloud-based HR applications due to security concerns, according to findings from a recent study by Software Advice.

In a survey polling small and midsize businesses (SMBs) on their use of cloud-based software, it was found that of the sample polled, only 24 percent of SMBs currently used cloud-based software to track and distribute employee payroll.

One reasonable conclusion for the low adoption rates of cloud-based payroll software is the fear that storing sensitive financial data on the cloud somehow exposes it to a greater risk of theft. However, does this fear have any basis?

Looking at statistics, the answer seems to point to a different story. The report further finds that of those who do currently use cloud-based payroll software, 96 percent were confident that the security measures used by their payroll software provider adequately protect their employees’ data from hackers and unauthorized viewers.

Security Aspect

While many employers worry that credentials such as social security numbers, addresses, and salaries are more vulnerable if stored online, overwhelming evidence supports the contrary — that cloud systems are more secure than traditional IT systems.

“Cloud providers have demonstrated a commitment to security, have the ability to meet demanding standards and relieve customers of some of the overhead of IT security implementation and administration,” says systems architect and TechTarget contributor Dan Sullivan.

Based on a 2012 State of Cloud Security Report conducted by Alert Logic, data breaches occur less in cloud-based environments, and BBC News also reports that most of the major data breaches that have taken place over the last five years have been from internal, not cloud-based, databases.

It may feel less secure to store payroll data on an on-premise system than a third party server, but reputable software providers take stringent measures to keep data secure. Fingercheck is one of those providers, as we encrypt sensitive information and protect all our clients’ data using SSL technology.

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