Insider threats are a challenge that requires vigilant, proactive security measures. One of the first steps organizations can take to secure against insider threats is conduct thorough screening to each potential new hire.

“Bad hires pose significant risks,” says J Stephen Kowski, Field Chief Technology Officer at SlashNext Email Security+. “Malicious actors or foreign agents could compromise sensitive data, systems, and intellectual property. Their actions could lead to reputational damage, financial losses, and severe security breaches.”

To mitigate the risks of bringing a bad hire into the fold, background checks are essential. Yet, with incidents such as the data breach against employment screening service provider DISA Global Solutions, Inc., it is impossible to ignore that insecure background check processes could compromise sensitive information.

Leakage of such private data could have repercussions for candidates who underwent background checks. Thomas Richards, Principal Consultant, Network and Red Team Practice Director at Black Duck, states, “In the event of a breach, candidates could become victims of identity fraud. The information collected to conduct the background check could, in most circumstances, be all that is needed to open up a banking account or get a loan.”

“These reports often contain Social Security numbers, addresses, employment history, biometric data, and even criminal history, making them a goldmine for cybercriminals,” says Chad Cragle, Chief Information Security Officer at Deepwatch. “Additionally, leaked background check information could lead to discrimination, job loss, or personal embarrassment if sensitive details such as past criminal records or financial issues are made public or exploited.”

Exposure of personally identifiable information (PII) like Social Security numbers, addresses, and employment histories may result in regulatory penalties, costly litigation, and mandatory breach notifications.

The consequences of leaked background check information are not limited to potential hires. An organization whose database is breached could face serious repercussions.

“A breach of an organization’s background check information will lead to legal, financial, and reputational damage,” Cragle states. “Exposure of personally identifiable information (PII) like Social Security numbers, addresses, and employment histories may result in regulatory penalties, costly litigation, and mandatory breach notifications. Financial impact includes forensic investigations, breach remediation, and identity theft protection services for affected individuals which is now offered after any major breach. Beyond compliance risks, a breach erodes trust and exposes organizations to identity theft, fraud, phishing, and insider threats.”

So, how can organizations conduct effective background checks without compromising candidate privacy?

“The focus should be on protecting the candidate’s data,” Richards explains. “The data should be secured at all times with encryption while at rest and in transit. While this could be cumbersome for the employees conducting the checks, it is vitally important for customer privacy and security.”

To ensure candidate privacy during and after background checks, Cragle recommends organizations follow these best practices:

• Limit data collection: Only collect data that is essential for the background check process.
• Secure data in transition and storage: Encryption should be used for data that is in transmission and storage alike. Access controls with multi-factor authentication can help protect sensitive data.
• Enact data retention and elimination policies: Implement clear policies to ensure candidate data is securely disposed of when no longer needed.
• Establish consistent security assessments: Regularly audit systems for vulnerabilities to mitigate the risks of data loss and unauthorized access.
• Communicate with the candidate: Notify candidates about which information is collected, how it will be used, and what rights they have over their data.

In addition to following these best practices, organizations should also follow regulatory guidelines.

“It’s critical for organizations to follow some type or regulatory or compliance frameworks to ensure they’re adhering to best practices. Organizations must recognize that background checks involve highly sensitive personal data, and a breach can have long-lasting consequences for both candidates and the company,” says Cragle. “By integrating security and privacy into every step of the background check process, organizations can build trust with candidates while maintaining compliance with evolving data protection laws. Security should not be an afterthought it must be a fundamental part of the hiring process.”