Review: Is Cloud-Based Software Safe for SMBs?

Our friends at Software Advice, an HR technology review company, recently looking at whether or not small business believe the cloud is a safe way to process payroll.  Due to previous cyber attacks it makes sense why small business may be hesitant to trust the cloud with their sensitive information such as payroll data, employee personnel information, and so forth. That's why small businesses tend to adopt cloud-based payroll software at a much slower pace than its large business counterparts. So the question we really want answered is, 'is cloud-based payroll a safe solution for small business?'

Small Business and the Cloud

The study found that less than 25 percent of small businesses use cloud-based payroll software. The four popular options for businesses to run payroll tend to be:

  • In-house software (53 percent)
  • Cloud-based software (24 percent)
  • Manual method such as spreadsheets (11 percent)
  • Outsourcing the entire process all together (11 percent)

Oddly enough, a previous study by Software Advice revealed that 77 percent of small business requested a cloud-based payroll solution, yet only 24 percent actually use cloud-based. Keep in mind those surveyed may not be the decision maker in regards to payroll, so while they may have requested it, they may not have the power to put it into place. 

Users Believe in Security

A survey of software users concluded that 96 percent are confident that employee data is secure and protected from hackers. Rightfully so, users should be confident that cloud-based software is secure. The following are measures put in place to ensure the utmost in security. 

  • Regular internal security audits to ensure security protocols are up to standard
  • Security scans that consistently run on the providers server
  • Dedicated staff to continually implement software updates to detect weaknesses
  • Constant on-site security at the server location to keep data secure

Additionally, all client information is encrypted and protected by SSL technology. 

Extra Steps for Security

Software users are also responsible for protecting their information as well. The following steps should be taken in order to further protect sensitive information:

  • Create a strong password
  • Securely store passwords
  • Look out for suspicious web activity
  • Implement two-factor authentication

Taking these additional four steps is the best way to make sure you, as the end-user, are implementing best practices to keep information secure. The study shows that companies using cloud-based software do in fact stress these points; 79 percent reported taking part in security training, while 73 percent participated in two-factor authentication. Another 67 percent reported that their software automatically logs them out after a period of inactivity. This is an added security feature that should be sought out before purchasing a cloud-based payroll solution. 

Cloud-Based Security

While cloud-based payroll is still in its infancy stages, more and more businesses are beginning to see the benefits of processing payroll in the cloud. Features such as external security, lower upfront costs, and continual updates are just a few of the highly desired features that come with a cloud-based model. Finally, to answer the question of cloud-based payroll being safe for small business; if you practice all the suggested security measures you are actually more secure processing in the cloud than you are processing using an in-house method. 

If you’re interested in reading the full study by Software Advice you can do so here.