Data security in outsourcing: what you need to know

Data security in outsourcing: what you need to know
Natalie Toniotti
Natalie Toniotti
    5 minute read

One of the most frequently asked questions about outsourcing is whether your customer data, privacy and information will be secure. With privacy, data and information management legislation constantly under review, providing the confidence to your clients that their information is secure can’t be overlooked.

It’s important to note that not every outsourcing provider will have the same facilities, protocols and infrastructure. That’s why drilling down into the operations of prospective providers is so important. Doing so will enable you to understand the inner workings of each, allowing you to critically decide which provider is right for your business and ensure you feel confident your data is secure.

If data security and privacy is a top priority for your business (which it absolutely should be), this blog takes you through the best practice security measures that you should be looking for in a provider.

What are the risks associated with data security when outsourcing?

Cybercrimes are a huge concern for businesses and can be costly, with total damages estimated to be close to $6 trillion in 2021. These global cybercrime costs are expected to grow 15% year on year until 2025, reaching $10.5 trillion. Like any business investment, there always exists an element of risk. With outsourcing, the risk is associated with sending highly confidential information to third parties overseas.

For your outsourced team to do their job efficiently, they will need access to the information and data necessary to do so. This could mean sending your company’s financial statements and books to offshore accountants or financial analysts. Or, you may need to send confidential employee information to your offshore HR specialists.

If this data is not provided, the chances of your outsourced investment becoming a success becomes quite unlikely. If you hire an outsourced customer service team, they will likely be collecting a large amount of personal consumer data via calls, emails and through online communication platforms. If this information is not secure and customer data is leaked, the repercussions for your business can be significant.

What are the best practice onsite security measures for outsourcing providers?

If your outsourcing provider has an onsite location or office where your outsourced team operates from, it’s important to consider the following:

External entrance security

Having security that starts at the front door will ensure that no unauthorised personnel can access the building. Only staff should be allowed to enter the building via a keypad or a biometric scanner. It’s also important to note that only senior staff and security should have access to the building outside of operating hours. This simple measure ensures all line staff only have access to the building during normal operating hours.

Onsite security

In addition to the keypad lock, the main entrance and reception area should be staffed 24 hours a day, 7 days a week by security. Security should have the responsibility of only allowing staff and approved visitors through reception. Spot searching may also be an additional measure as they ensure staff do not take any recording devices, such as mobile phones, cameras or USBs into their main operations area if not specified in their job description.

Locker rooms

Each staff member should have their own locker. Staff should be required to place all personal items in their lockers before entering the operations area. The benefit of this system is that staff are only allowed to access their personal devices during breaks in the onsite cafeteria or outside of the building. Some outsourcing providers allow mobile phones in the operations area and others allow them only with the client’s permission. Best practice for optimal data security is for mobile phones and other devices to be left in a secure locker facility before entering the operations area.

Clean desk policy

The main operations area is where offshore staff will have access to your company’s data. Ensuring your provider has a clean desk policy in place will prevent staff from having anything on their desk that would allow them to record sensitive information.

Biometric scanners

Upon entering the main operations area, staff should be required to identify themselves by scanning their fingerprint using a biometric scanner. Biometric scanners ensure only staff have access; meaning visitors will need to be authorised by management prior to gaining access.

Biometric scanners should also link to time and attendance reporting; tracking the comings and goings of staff. This level of reporting is incredibly useful when solving productivity and efficiency problems. Unlike swipe cards which can be stolen or swapped, biometrics are best-practice security.


In some countries like the Philippines, government requirements state that all outsourcing companies have CCTV throughout. If the Philippines is your desired outsourcing location then this should be guaranteed. The benefit of having CCTV is that it covers all reasonable spaces inside and outside the building, maintaining a thorough record of staff movements in case of a data breach.

Disabled USB and hard drive access

To prevent data theft and to protect your company’s privacy, it’s best practice for your provider to disable all USB ports on computers. This will ensure staff cannot use USBs or devices to download any data.

Limited cloud-based program access

Cloud-based programming is what makes outsourcing as easy as it is today. However, it’s absolutely crucial that your provider has the ability to lock down employee access after hours and on mobile devices.

What are the best practice human resource security measures for outsourcing providers?

Depending on the outsourcing model you choose, if you have your outsourcing provider sourcing and recruiting your outsourced team, there are a few key security measures that should be taken into consideration:

Background checks

Upon screening potential employees, your provider should be carrying out background checks for every shortlisted candidate. This should include identity verification, employment verification, academic verification, credit records and criminal records. This will ensure you’re receiving the best talent possible and will also assist in minimising risks associated with employee turnover.

Medical examinations

Similar to a background check, each shortlisted candidate should also undergo a health check and medical examination. This will ensure the employee is in fact fit to work.

Employment contracts

Ensure that your provider’s employment contracts state data security and privacy protocols. This will ensure that your staff members are weary of what will happen if they breach company policy.

It all comes down to choosing the right outsourcing provider for your business

The provider you choose for your business has the potential to ultimately make or break your outsourcing journey. To ensure your outsourcing journey is nothing short of successful, start by asking the right questions. Arm yourself with 33 of the most important questions that will drill into the operations of any prospective outsourcing provider.

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