Love them or hate them, spreadsheets help keep us organised. But if your business is using them to store sensitive employee data, you may want to muscle up.

Sharing is caring, but not when it comes to spreadsheets. As we rely ever more on collaboration tools in the age of hybrid work, anywhere where we share and store personal employee information shouldn’t be left vulnerable to cyber criminals.

It’s especially important for small and medium businesses. We’ve heard plenty about high-profile corporate cyber attacks in the news over the past year, but as the recent Australian Cyber Security Centre Small Business Survey shows, 62 per cent of Australian small and medium enterprises have encountered a cybersecurity incident.

The ramifications can be serious for both businesses’ reputations and bottom lines. Thankfully, there are a lot of measures we can take for better protection, including regular software security updates, managing remote access permissions, using multi-factor authentication and moving spreadsheet data to more secure software.

Why are spreadsheets a cyber risk for business?

Any document with sensitive information can fall into the wrong hands. Since we’re working from anywhere and everywhere, through different WiFi networks and servers, the risk is ever present.

Given that spreadsheets are often places where sensitive HR and payroll data is kept – think birthdays, addresses, billing details – they can be easily compromised.

Even Microsoft explains in their Excel guide that password protection on spreadsheets is not a guarantee of security. Yes, you can encrypt a shared Excel file with a password, but if you need to share it with anyone, Microsoft warns that this may “not necessarily protect your file from malicious intent”. Google Sheets, meanwhile, is encrypted with built-in security, however you need to carefully manage who has access to your sheets.

Spreadsheets are also commonly used in phishing attacks, where cyber criminals look like they’re sending a document from a legitimate address.

Despite these risks, spreadsheets are still the most common way that employee data is managed, according to ELMO Software and the Australian HR Institute (AHRI)’s recent 2023 HR Industry Benchmark Study. From their survey of 700 HR professionals around Australia, the report found that 33 per cent of HR managers are still using spreadsheets to handle personal employee data.

“The use of manual methods, such as spreadsheets, to manage employee data is not only risky but inefficient,” says Danny Lessem, CEO and co-founder of ELMO Software, the leading cloud HR and payroll specialist in Australia and New Zealand.

“With the increasing threat of data breaches and cyber attacks, HR professionals need to prioritise data security and adopt modern HR software solutions that provide advanced security features and data encryption capabilities.”

Spreadsheets v cloud-based software

Not everyone’s doing it the old-school way. The survey found that the equal top method for managing employee data is integrated HR and payroll systems, involving cloud-based software.

Cloud-based software is encrypted and doesn’t live on your local machine so it’s harder for cybercriminals to access. It doesn’t mean it’s impossible – as we’ve seen from the large-scale data breaches – but cloud providers are on high alert now with robust security protocols.

“Spreadsheets are not the same as a secure database and should not be used as such. They’re good for formulas and that kind of thing, but spreadsheets weren’t designed to store sensitive data like employee information,” Lessem explains. “They can only offer password protection, which can be broken easily with the right kind of software.”

If a spreadsheet is corrupted, you could lose all that information. Plus, there’s the issue of version control when multiple people in a business are editing and sharing a spreadsheet that may not always be up to date.

“In response to this, a cloud-based database has been purpose-engineered and offers much higher security. Multiple versions cannot be created in a database, meaning that there is little risk of information being duplicated,” Lessem shares.

Secure options for HR and payroll

If you’re looking for robust security for your employee data, have a look at an integrated HR and payroll system like ELMO. ELMO holds an ISO (International Organisation for Standardisation) certification, a global accreditation that sets the highest standard for information security management systems. This means that details around processes, people and pay are highly protected.

Used by thousands of organisations across Australia, New Zealand and the United Kingdom, ELMO’s cloud-based software puts HR, payroll, expense management and rostering, time and attendance into one centralised system.

Businesses can manage access to the software with more control than, say, someone emailing a spreadsheet. As Lessem points out, spreadsheets can be easily copied or shared, whereas “you would need proper access to a cloud-based system”. Plus, having it all in a single system means less versions of documents and spreadsheets floating around the business.

The other benefit is time. According to the survey, HR professionals can spend up to one day a week on manual admin tasks that could be automated, which includes payroll preparation often done through spreadsheets, scraps of paper or through a tax-agent payroll provider. When it’s all streamlined into one system, the admin time is significantly reduced.

That’s just one of the useful solutions out there for businesses looking to make the move from spreadsheets to software. Always be sure to do your research first and see what’s right for your business needs.

Learn how ELMO can help you today.

This article is brought to you by Kochie’s Business Builders in partnership with ELMO Software.

Feature image: AdobeStock