Why do corporations care (and spend money) to educate employees about protecting personal identity? Businesses educate their employees and even their customers on identity theft because it positively affects the corporation’s bottom line (by lowering the costs of data theft).
Here’s how organizations benefit:
- Minimize employee downtime. Serious individual cases of identity theft can take up to 600 hours in recovery time. Because banks and creditors are generally open when employees are at work, the employees are forced to recover on company time. Even if they only spend 40 hours during work recovering, this is a huge cost to the company. Roughly 10 percent of households will have to recover from identity theft at least once this year.
- Promote respect for sensitive information. How can corporations expect employees to care about the sensitive information they handle every day (customer data, employee records, intellectual capital) if the employees don’t first respect their own private data? As employees discover how much their identity is worth, they are far more likely to protect the data they handle at work as if it were their own. After all, they begin to understand that next time it might be their identity that is stolen from a corporation.
- Save money. Corporate data breaches are expensive. Smart corporations understand that safe data is profitable data. Just ask TJX, a company that, according to recent stories, lost somewhere in the neighborhood of 94 million customer identities (far above what they initially reported) and could spend up to $1 billion recovering from the data breach. Not only are they being sued by customers, but also by credit card companies and banks whose customer data has been compromised. Add to this the cost of providing a year’s worth of credit monitoring for every affected individual (a maximum of 94 million people X $10 per month X 12 months); the damage it has done to their brand (almost everyone has seen this on the news); the hit taken by their stock; and the thousands of hours spent in damage control; and you can see why investing in prevention is wildly inexpensive compared to recovering from a corporate data breach. And corporate prevention begins at the personal, employee level.
- Protect employees’ financial health. Safe and happy employees are good employees. I have found that many corporations out there truly care about the quality of their employees’ lives. In addition, many of them hire me simply because they understand that safe and happy employees are more loyal to the corporation, speak well of the company, remain longer in the organization and drive more business. These companies consider their employees’ financial health to be as vital as their physical health, and it pays off over the long run. Identity theft poses the highest risk to their workers’ financial health.
- Support consumer education. Educated customers cost less. When a bank customer knows how to prevent identity theft, they are far less likely to become a victim and therefore less likely to lose money for which the bank is ultimately responsible. When someone steals your identity and drains your bank account, the bank generally covers the cost. If your identity is never stolen in the first place, neither you nor the bank has the expense.
John Sileo became America’s leading identity theft speaker and expert after he lost his business and more than $300,000 to identity theft and data breach. His clients include the Department of Defense, Pfizer, and the FDIC. To further bulletproof yourself and your business, visit John’s blog at Sileo.com and receive a free white-paper: “Privacy Means Profit: Safe Data = Profitable Data.”