Benefit implementation headaches and how to avoid them
5 min
In this article, we’ll dive into the major costs that can be associated with data breaches, including employee disengagement, litigation costs, and more. We’ll also look at how an identity protection benefit can help HR prevent these costs and give them the tools they need to protect their organization’s bottom line.
As an HR professional, you’re on the frontlines of safeguarding and protecting the employee experience; you play a vital role in maximizing profits and reducing costs across your organization.
If you want to maximize the employee experience and protect your organization’s bottom line, an identity protection benefit should be a key part of your strategy. That’s because an identity protection benefit is critical when it comes to preventing one of the most devastating threats to today’s organizations—data breaches.
Reputational and financial damage
Data breaches can impact different businesses in different ways. Some affected companies feel the impact for years to come, especially when it comes to their business’ reputation.
If a data breach occurs in your organization, people will take notice. According to recent research, 58 percent of consumers believe that brands that experience a data breach are not trustworthy, and 70 percent would stop shopping with a brand that experienced a security incident.
This impact isn’t limited to customers and prospects either. Experiencing a data breach or having your employees’ personal data compromised can lead to good employees leaving your company. It can also drastically inhibit your ability to attract and retain top industry talent in the future (not to mention it’s a PR nightmare).
A breach of employees’ information can also come with significant costs. Breaches involving employee personally identifiable information (PII) can be incredibly expensive, with costs per compromised record averaging $189 in 2024, up from $183 in 2023.
Regulation and litigation costs
Companies can lose a fortune due to regulation and litigation stemming from a breach. Failure to comply with standards like the Fair and Accurate Credit Transactions Act (FACT Act) and the Fair Credit Reporting Act (FCRA) can result in major fines. For example, when AT&T suffered a major data breach that resulted in the exposure of personal data of over 100 million customers, they were forced to pay a settlement of $177 million to customers.
And outside the U.S., regulation is getting much stiffer. In the EU and EEA states, failure to comply with the General Data Protection Regulation (GDPR)—legislation aimed at protecting the personal data of citizens—can spell big problems for any company. Businesses that fail to properly disclose breaches within 72 hours will result in fines up to €2 million or 4 percent of annual turnover, whichever is more.
For example, the Irish Data Protection Commission fined Meta Platforms Ireland Limited €251 million for a data breach in 2018 after there was unauthorized access to personal data such as names, contact information, political beliefs, and more.
While laws in the U.S. may not be as standardized when it comes to issuing fees, that doesn’t mean organizations are in the clear: Courts are increasingly holding companies responsible when the data of their employees and customers are exposed.
Employee disengagement
When your employees have their personal data compromised—or, far worse, their identities stolen—they may become distracted in the workplace, leading to employee disengagement. This can have a significant impact on your company’s bottom line.
According to Gallup, companies with high levels of employee engagement experience:
78 percent less absenteeism
Between 21 percent and 51 percent less turnover
63 percent fewer safety incidents (accidents)
10 percent higher customer loyalty or engagement
14 percent higher productivity (production records and evaluations)
18 percent higher productivity (sales)
23 percent higher profitability
70 percent higher wellbeing (net thriving employees)
These numbers show just how costly disengagement can be. When personal data is compromised, the stress and distraction employees face can ripple across productivity and retention.
Costs associated with malware attacks
When employees fall victim to scams like phishing, they may compromise more than their personal data. In addition to stealing confidential information about the employee and their business, phishing attacks may install malware on the company’s network via an employee’s personal device that’s used for work.
2023 was the most devastating year yet for ransomware attacks, costing businesses over $1 billion in ransom payments. These attacks, which completely hijack a victim’s computer, charge users a bounty to regain access to their equipment. And these ransoms often carry a hefty price with organizations paying an average of $2 million to regain access to their systems.
In addition to the charges businesses must pay to regain control of their equipment, productivity and sales come to a screeching halt until criminals restore functionality. 58 percent of organizations hit by ransomware in 2024 were forced to shut down operations completely to recover, and containment and remediation of the largest ransomware attacks took an average of 132 hours.
And worst of all, some of the data that is impacted by these attacks is often unrecoverable, with only 13 percent of companies reporting that they recovered all the impacted data. This can result in further delays and disruptions to business, resulting in a damage to a business that may not be repaired.
How HR can prevent these four major costs by protecting employees’ identities
The costs associated with having employees’ personal data compromised are staggering.
HR needs to have a comprehensive cybersecurity plan in place. If your company has an IT department, you’ll want to work closely together to ensure you are protecting confidential data to the best of your ability and have a plan in place if sensitive material should become compromised. For smaller companies who may not have an IT team, you can begin by reviewing the FCC’s Ten Cybersecurity Tips for Small Businesses.
Your human resources department serves a vital role in protecting your employees and your company, and a solution that goes beyond traditional cybersecurity tools to protect your employees’ identities is a critical tool in their arsenal.
While providing an identity protection benefit to your employees cannot prevent a data breach at your company or eliminate the associated costs, it can serve as a meaningful starting point for individual safety. Identity protection is designed to support your individual employees, helping them recover more quickly and confidently if their personal information is compromised by:
Giving employees the tools they need: By providing tools like dark web monitoring, employees can discover when their personal account credentials have been compromised, preventing hackers from using those accounts to gain access to their work-related accounts.
Providing device protection: With features like malware detection and phishing protection on their personal devices, employees can avoid falling victim to data theft and device takeovers that can result in data breaches.
Offering quick resolution: In the event that your employees’ data is breached or their identities are stolen, you’ll have a team of certified experts working around the clock to help repair the damage done and restore their finances, minimizing the impact of employee disengagement.
Providing education and alerts: By offering useful educational resources and alerts about emerging scam and fraud threats, you can help prevent data breaches before they happen.
To learn more about how identity protection can help HR teams protect employees, visit our page.