How HR handles candidate data – a quick guide

Human resource departments have become owners of increasingly vast and sensitive information ecosystems. Their responsibility extends far beyond traditional personnel management into the realm of sophisticated data stewardship. Throughout the employment lifecycle—from initial application to onboarding and beyond—HR professionals must navigate complex regulatory frameworks, emerging cybersecurity threats, and evolving best practices to safeguard candidate and employee information.

This article examines the different stages of the hiring process. It highlights the challenges HR professionals face at each stage and outlines what practices to follow to maintain security, confidentiality, and compliance. 

Application

HR already collects much sensitive data from applications alone. Resumes and cover letters contain personally identifiable information, requiring an effective data collection and retention policy. 

The modern application process generates a remarkable volume of sensitive data. Beyond the obvious personally identifiable information (PII) contained in resumes and cover letters—names, addresses, phone numbers, email addresses—applications often reveal candidates’ educational backgrounds, work histories, salary expectations, and sometimes even protected class information through voluntary demographic disclosures.

A vetted and secure applicant tracking system that securely handles applicant data is the foundation for building additional measures. At this stage, they include data encryption and guidelines for storage, usage, and eventual deletion.

Contemporary HR professionals face a fundamental tension: collecting sufficient information to make informed hiring decisions while adhering to the principle of data minimization. This principle, codified in regulations like GDPR and increasingly reflected in privacy laws worldwide, requires organizations to collect only the data necessary for clearly defined purposes.

Successful navigation of this tension requires HR teams to:

• Conduct regular audits of application forms to eliminate unnecessary fields
• Design multi-stage application processes that gather more sensitive information only as candidates advance
• Implement clear data retention schedules with automatic deletion protocols for unsuccessful applicants
• Develop transparent privacy notices that explain exactly how candidate data will be used, stored, and eventually disposed of

Building a Secure Technical Infrastructure

The applicant tracking system (ATS) forms the technological backbone of candidate data management. However, not all systems offer equal protection. When evaluating or upgrading an ATS, HR departments should consider:

• End-to-end encryption for both data in transit and at rest
• Role-based access controls with granular permission settings
• Comprehensive audit logging to track who accesses what information and when
• Regular security assessments and penetration testing
• Compliance certifications relevant to your industry (e.g., SOC 2, ISO 27001)
• Integration capabilities with other HR systems to prevent risky data transfers

By establishing robust data governance at the application stage, HR teams create a foundation for secure information management throughout the hiring journey.

Screening 

As candidates move from application to screening, the nature and volume of collected data evolves dramatically. Initial resume reviews give way to more detailed assessments, generating interviewer notes, evaluation scores, and comparison matrices. This information often contains subjective judgments about candidates’ qualifications, communication skills, and potential cultural fit—data points that carry significant privacy and legal implications.

Documenting Selection Criteria and Decisions

Maintaining detailed records of screening criteria serves multiple purposes beyond basic data management:

• Creates an audit trail for demonstrating non-discriminatory hiring practices
• Enables pattern recognition for improving future recruitment efforts
• Provides defensible documentation in case of legal challenges
• Facilitates more objective comparison between candidates

However, these records also create potential liability if not properly secured and governed. HR departments should establish standardized documentation practices with clearly defined retention periods based on both legal requirements and business needs.

Implementing Tiered Access Controls

Not everyone involved in the hiring process requires the same level of access to candidate information. A sophisticated approach to data security implements tiered access controls:

• Level 1: Basic application data for initial screeners
• Level 2: Full application materials and screening notes for hiring managers
• Level 3: Comprehensive candidate profiles including assessment results for HR decision-makers
• Level 4: Administrative access for HR information system managers

Each access level should be implemented through technical controls and reinforced through regular training on appropriate data handling practices.

The Role of AI and Algorithmic Screening

As artificial intelligence and machine learning tools become more prevalent in candidate screening, HR professionals must address novel data governance challenges:

• Ensuring algorithmic transparency and explainability
• Auditing for potential bias in automated screening tools
• Managing the additional data generated through algorithmic analysis
• Establishing clear boundaries between human and automated decision-making

Organizations using AI-enhanced screening must implement stronger data protection measures, including regular algorithm audits, clear documentation of AI decision factors, and human oversight mechanisms to prevent discriminatory outcomes.

Testing and Protecting Sensitive Performance Data

Candidate assessments—whether technical skills tests, personality inventories, or cognitive ability measures—generate particularly sensitive data. These assessments often reveal information beyond what’s directly relevant to the position, potentially including intellectual capabilities, psychological tendencies, or even indicators of neurological differences.

Some roles require aptitude testing to identify the most capable candidates. Others may ask for psychological evaluations or administer personality tests to determine a candidate’s cultural fit.

Any third-party platform used for testing purposes needs to be vetted for data protection measures and compliance with regulations like the GDPR and HIPAA. Anonymizing the test results will decrease the chance of biases. Deleting excess data after making a hiring decision will reduce the risk of data breaches. It’s also crucial to ensure that the platform used for testing has secure data storage and strong encryption protocols to protect the candidate’s information.

Conducting Due Diligence on Third-Party Assessment Providers

Many organizations rely on external vendors for candidate assessment tools. When selecting these partners, HR departments should conduct thorough due diligence:

• Review the provider’s data protection policies and security certifications
• Clarify data ownership and usage rights, especially regarding aggregated candidate data
• Examine how test results are transmitted, stored, and eventually deleted
• Ensure compliance with relevant accessibility and non-discrimination requirements
• Verify the scientific validity and reliability of the assessment tools

The most secure arrangement involves contractual provisions that explicitly prohibit assessment vendors from using your candidates’ data for purposes beyond your specific hiring needs.

Implementing Privacy-Enhancing Assessment Practices

Beyond vendor management, HR teams can adopt practices that inherently enhance data protection:

• Using anonymized or coded identifiers during the assessment phase to reduce bias
• Storing raw assessment data separately from identifying information when possible
• Establishing clear protocols for communicating assessment results to decision-makers
• Implementing differential retention periods for different types of assessment data
• Providing candidates transparency about what data is collected and how it informs decisions

These practices not only protect sensitive information but also demonstrate respect for candidate privacy, enhancing employer brand reputation in competitive talent markets.

The Ethical Dimension of Assessment Data

HR professionals must recognize that assessment data carries ethical implications beyond basic security concerns. The power imbalance between organizations and job seekers means candidates often have little practical choice about submitting to assessments. This reality creates a heightened responsibility to:

• Collect only assessment data with clear relevance to job performance
• Be transparent about how assessment data influences hiring decisions
• Implement strong safeguards against data misuse or unauthorized access
• Respect candidate autonomy by providing clear information about data practices

By approaching assessment data with both security and ethical considerations in mind, HR teams can build more trustworthy hiring processes.

Interview Process

Interviews generate complex data challenges, especially as organizations increasingly employ multiple interview formats—structured in-person conversations, asynchronous video responses, technical demonstrations, and panel evaluations. Each format creates different types of data with unique security requirements.

Managing Digital Interview Records

Video interviews, whether live or asynchronous, create permanent digital records that require special handling:

• Implementing secure storage solutions with appropriate encryption
• Establishing clear retention policies for interview recordings
• Creating standardized permissions for accessing recorded interviews
• Developing protocols for sharing recordings among decision-makers

Organizations should consider whether maintaining permanent visual records of all candidates serves a legitimate business purpose, weighing the value of these records against the increased security requirements and potential privacy concerns.

Standardizing Interview Documentation

Even traditional in-person interviews generate significant documentation that requires protection:

• Interview guides and question sets
• Interviewer notes and evaluations
• Scoring rubrics and comparison matrices
• Decision justifications and next-step recommendations

Standardizing how this information is recorded, stored, and shared not only improves security but also enhances the quality and consistency of the hiring process. Digital templates with built-in security features can replace ad hoc documentation systems that might leave sensitive candidate information vulnerable.

Implementing Comprehensive Access Security

As the interview process often involves multiple stakeholders across different departments, access security becomes increasingly complex. Best practices include:

• Password management systems that enforce strong, unique credentials
• Multi-factor authentication for accessing candidate information
• Browser extensions that facilitate secure access while preventing credential reuse
• Time-limited access permissions that automatically expire when no longer needed
• Regular access audits to identify and remove unnecessary permissions

Password managers help maintain secure access to sensitive candidate information. They generate and store strong, unique passwords for each HR team member and as many accounts as they use. Password managers for Firefox, Chrome, or other browsers can even integrate safe password management and autofill features into browsers, letting HR professionals securely access online platforms and cloud storage without having to run the manager separately. 

Job Offer 

The transition from candidate selection to offer negotiation introduces new categories of sensitive information, including current compensation details, benefit requirements, relocation needs, and sometimes personal circumstances affecting employment terms. This information requires heightened protection due to its potential impact on both the individual and the organization.

Securing the Background Verification Process

Before finalizing offers, most organizations conduct background verifications that generate particularly sensitive data:

• Criminal history checks
• Credit reports (for certain positions)
• Educational credential verification
• Employment history confirmation
• Professional licensure validation

This information often passes through third-party verification providers before reaching the organization, creating potential vulnerability points. HR departments should:

• Use only reputable verification providers with strong security practices
• Establish secure channels for receiving verification results
• Implement strict access limitations for background check information
• Create separate storage protocols for adverse information
• Develop clear retention policies that comply with relevant regulations

Most importantly, organizations should collect only verification information relevant to the specific position, avoiding the temptation to conduct overly broad investigations that generate unnecessary data security risks.

Managing Compensation Negotiations Securely

Compensation discussions generate particularly sensitive data that could create significant problems if compromised. Security measures should include:

• Encryption for all compensation-related communications
• Restricted access to salary benchmarking data and offer details
• Secure templates for offer letters and compensation packages
• Clear protocols for documenting negotiation discussions
• Secure channels for candidates to submit current compensation details

Organizations should also consider implementing “need-to-know” principles for compensation information, limiting full visibility to those directly involved in the decision-making process.

Preparing for Digital Offer Acceptance

As offer acceptance increasingly moves to digital platforms, HR teams must ensure these systems provide adequate security:

• Secure electronic signature solutions that meet relevant legal standards
• Protected document storage for executed employment agreements
• Encrypted communication channels for addressing candidate questions
• Audit trails documenting the offer, negotiation, and acceptance process
• Seamless integration with onboarding systems to prevent manual data transfers

By treating the offer stage as a critical security transition point between external recruitment and internal employee data management, organizations can prevent costly data breaches during this vulnerable period.

Onboarding 

The final step is integrating the employee into their new work environment. This introduces additional information requirements, such as banking details and tax forms, further stressing the need for robust encryption and effective access controls.

The onboarding process represents both the culmination of the hiring journey and the beginning of the employee lifecycle. From a data perspective, this transition is marked by a significant expansion in the volume and sensitivity of collected information, including:

• Tax identification and work authorization documentation
• Banking details for payroll processing
• Benefit enrollment information, potentially including dependent data
• Emergency contact information
• Detailed personal information for HR records

Since they’re now a full-fledged team member, it’s time to educate the new employee on upholding your data privacy policies. Doing so will ensure they don’t fall victim to phishing scams or otherwise endanger the data you store. The onboarding process is the perfect opportunity to review the company’s security practices, from recognizing suspicious emails to securely handling company devices.

Creating Secure Data Transfer Protocols

As candidate information transitions into employee records, organizations face the challenge of transferring data between systems without creating security vulnerabilities. Best practices include:

• Direct system integrations between ATS and HRIS platforms
• Encrypted data transfer protocols for any manual transitions
• Validation procedures to ensure data accuracy during transfers
• Clear documentation of what information moves forward and what remains in recruitment systems
• Access revocation for recruitment team members who no longer need candidate data

This transition provides an opportunity to review what recruitment information should be retained in the employee’s permanent record and what should be securely disposed of once the hiring process concludes.

Implementing Comprehensive Data Privacy Training

New employee onboarding creates the perfect opportunity to establish organizational data privacy expectations:

• Interactive training on recognizing and avoiding phishing attempts
• Clear policies on appropriate handling of sensitive information
• Guidelines for secure use of company systems and devices
• Explanation of relevant data protection regulations in your industry
• Introduction to organizational security resources and support

By positioning data privacy as a shared responsibility from day one, organizations create a security-conscious culture that protects both employee and candidate information.

Establishing Ongoing Data Governance

The onboarding phase should establish patterns for ongoing data governance throughout the employment relationship:

• Regular privacy notice updates and acknowledgments
• Clear protocols for accessing and correcting personal information
• Transparent data retention schedules for different information categories
• Defined processes for handling data subject access requests
• Mechanisms for reporting potential data security concerns

These governance structures set expectations for how the organization will respect employee privacy rights while fulfilling legitimate business needs for information management.

As we’ve explored throughout this guide, effective candidate data management extends far beyond basic compliance or security concerns. When approached strategically, thoughtful data governance becomes a competitive advantage in talent acquisition and organizational risk management.

The most successful HR departments recognize that candidate data practices directly affect:

• Organizational reputation in increasingly privacy-conscious talent markets
• Legal and regulatory exposure in a rapidly evolving compliance landscape
• Efficiency and effectiveness of the overall talent acquisition function
• Quality of decision-making throughout the hiring process
• Trust relationships with both candidates and new employees

By implementing the best practices outlined here, HR can transform data management from a mere administrative requirement into a strategic asset that enhances both candidate experience and organizational outcomes.