Cybersecurity and Employee Turnover: Protecting Data When Staff Leave

The Overlooked Cyber Threat of Departing Employees

High employee turnover has become a fact of life in today’s organizations. But when employees exit, whether for a new job, retirement, or termination, they can leave behind more than an empty chair. Departing staff may also leave a serious cybersecurity risk in their wake. Companies often focus on external hackers, yet insiders (including ex-employees) can pose an equally grave threat. Improper offboarding of employees, failing to promptly revoke access or secure data, has led to surprising numbers of breaches. In fact, nearly 59% of companies have experienced a data breach linked to poorly managed employee offboarding, and about 1 in 5 data breaches involve a former employee within six months of their departure. Additionally, over one in four departing employees admit to stealing data when they leave the company. These figures underscore an often overlooked truth: when staff leave, your data may be walking out the door with them.

Organizations of all kinds, from small businesses to enterprises, must recognize that cybersecurity doesn’t end on an employee’s last day. HR professionals, CISOs, business owners, and other leaders need to collaborate to ensure that when someone leaves the company, they no longer have access to sensitive systems and information. This article explores why employee turnover is a cybersecurity issue, real examples of data risks from departing staff, common offboarding mistakes, and best practices to protect data when employees leave.

Employee turnover can turn into a cybersecurity nightmare if not handled carefully. Insider threats often increase during an employee’s transition out of a company, underscoring the importance of ongoing Cybersecurity Training that helps staff understand data handling protocols, access controls, and their responsibilities before, during, and after employment. Some risks are malicious, a disgruntled former employee might steal confidential data or sabotage systems out of revenge. Other risks are unintentional, an employee might inadvertently retain access to an account or forget that a personal device contains company files. Either way, the result can be the same: sensitive information ends up exposed or in the wrong hands.

One major danger is lingering access. Many organizations do not immediately disable all of a departing worker’s accounts and passwords. This lapse leaves email, cloud storage, and databases open to unauthorized use. In fact, a recent Wing Security study found 63% of businesses have ex-employees who still have access to corporate data. If those credentials fall into the wrong hands, or if the ex-employee decides to misuse them, the company is vulnerable to breaches, data theft, and compliance violations.

The insider knowledge that ex-employees possess also heightens the threat. They know the company’s network, data locations, and potentially its security weaknesses. Some may take intellectual property (IP) like proprietary code or client lists with them to benefit a new employer or start a competing business. Others might have stored work files on personal drives and continue accessing them after leaving, risking accidental exposure of confidential data. And in worst-case scenarios, a resentful employee who was let go could intentionally leak data or plant backdoors on their way out.

Multiple surveys confirm these are not one-off incidents but a widespread problem. In one survey, 85% of IT professionals said the period during and right after offboarding is a critical time for cybersecurity risk. The Ponemon Institute likewise reports that 20% of data breaches involve a former employee, often within mere months of their departure. With workforce turnover at high levels and many staff moving to competitors, every organization must treat departing employees as a potential security concern. Vigilance during offboarding is essential to close the door on insider threats before they materialize.

Data breaches and security incidents tied to ex-employees are alarmingly common across industries. These cases illustrate how failing to secure data when staff leave can have serious consequences:

• Financial Data Breach by Ex-Employee: In one incident, a former employee of a mobile payments company retained access to reports containing personal customer information. After leaving, he downloaded reports with sensitive data on 8 million users, leading to a massive breach. This not only compromised customer privacy but also inflicted significant financial and reputational damage on the firm. The breach could have been avoided had the company promptly revoked the individual’s access upon his departure.
  
• Tesla Intellectual Property Leak: High-tech companies are frequent targets of insider data theft. For example, two former Tesla employees leaked files containing data of 75,000 people (including other employees’ personal records) to a foreign media outlet. This insider leak exposed a trove of confidential information. It underscores how even well-known enterprises can be harmed by ex-staff with access if offboarding processes fail to catch and eliminate every credential.
  
• Passwords and Accounts Misuse: A 2023 study revealed that nearly 47% of workers admitted to using their former employer’s passwords to access email, software, or other services after leaving. Shockingly, over half of those surveyed said the company never changed those passwords, meaning the credentials stayed valid long after their departure. Some ex-employees even confessed to using old logins to disrupt their former company’s operations out of spite (about 10% admitted doing so). This highlights a preventable risk: if companies don’t deactivate accounts or update passwords, ex-staff (or anyone they share credentials with) can continue logging in undetected.
  
• Stolen Trade Secrets: Intellectual property theft by departing employees is a well-documented issue. In one case, a Yahoo engineer accepted a job at a competitor and before leaving, he stole 570,000 pages of confidential designs and algorithms to benefit his new employer. Likewise, numerous former employees in industries from software to finance have been caught transferring client lists, source code, or design documents to personal devices or cloud accounts prior to their exit. These actions can erode a company’s competitive advantage overnight.
  
• Compliance Violation Example: In the healthcare sector, a Colorado hospital learned the hard way about offboarding risks. A former staff member’s access to a scheduling calendar containing patient data wasn’t removed after her termination. This lapse meant an ex-employee could still see protected health information (PHI), violating privacy laws. Regulators fined the hospital $111,400 for the HIPAA violation, an incident that could have been avoided with better offboarding controls.
  

These examples show that insider-related breaches can lead to legal penalties, lost clients, public embarrassment, and financial loss. They also demonstrate how varied the causes can be, from malicious intent and espionage, to opportunistic misuse of still-active accounts, to sheer negligence in removing access. Every case reinforces the same lesson: a lax offboarding approach can open the door to data leaks.

Why do so many organizations struggle to protect data when employees depart? Often, it comes down to gaps in the offboarding process. Here are some common mistakes and oversights that put corporate information at risk:

• Delayed or Incomplete Access Revocation: A frequent error is not revoking system access promptly. Ideally, the moment an employee leaves (or even just before, in cases of termination), all their accounts should be disabled. In reality, many companies take days or weeks to remove access, or forget some systems entirely. Only 44% of companies ensure all access rights are revoked within 24 hours of an employee’s departure. Some accounts are overlooked, especially in cloud services or third-party apps. The result is “ghost” user accounts that former staff (or threat actors who obtain those credentials) can exploit unnoticed.
  
• Poor Password Hygiene and Shared Credentials: It’s not just IT accounts, even shared logins and passwords to tools often remain unchanged after turnover. In the earlier survey, 58% of ex-employees said their old workplace passwords still worked because the company never updated them. Additionally, 44% said a current employee had even shared passwords with them after they left. This points to a lack of policy enforcement around password security. Any shared accounts (which ideally should be minimized) and admin passwords should be changed immediately when someone leaves, yet many businesses miss this step.
  
• Unrecovered Devices and Data: When employees leave, they may have company laptops, smartphones, USB drives, or files on personal devices. Failing to retrieve or wipe company-owned devices is another major gap. An industry survey found 41% of companies do not collect all company devices during offboarding. If a laptop or phone isn’t returned (common with remote workers), it could contain emails, documents, or saved passwords that remain accessible to the ex-employee or anyone who obtains that device. Even on personal devices, departing staff might retain confidential files or emails. Without a process to remotely wipe or at least secure that data, it can easily leak or be misused after their departure.
  
• Lack of Monitoring Around Departures: Many organizations underestimate internal risks and therefore don’t monitor user activity closely when someone is on their way out. This is a mistake, as insider threats often peak near the end of employment. An employee giving notice might suddenly download large numbers of files or forward emails to a personal address, signs of data exfiltration. If no one is watching, these actions go unnoticed. Likewise, without monitoring, a company might not detect that an ex-employee’s old account is still being used until damage is done. Failure to detect these insider behaviors in time is a known blind spot for security teams.
  
• Insufficient HR-IT Coordination: Offboarding is a multidisciplinary task. HR manages the exit logistics, but IT/security must handle access and data. If HR doesn’t promptly inform IT of a departure (for example, an employee quits and HR delays notifying IT until their last day or later), there may be a window during which the employee still has access unsupervised. Offboarding mistakes often happen due to process breakdowns or unclear ownership, HR might assume IT will catch everything, while IT might not have a comprehensive checklist without HR’s input. A lack of clear roles, communication, and checklists means steps get missed, leaving holes in security.
  

Each of these gaps can be plugged with the right policies and diligence. Recognizing these common mistakes is the first step; next, organizations need to implement strong controls and procedures to ensure that when someone leaves, they truly leave, and take no data or access with them.

Protecting data when staff leave requires a proactive, organized approach. Here are key best practices that HR departments and IT/security teams should implement together to guard against data loss during employee turnover:

• Revoke Access Immediately: Don’t wait until “end of day” when someone exits. The moment employment ends (or even a few minutes before notifying a person of involuntary termination), cut off their access to all corporate systems. This includes network logins, VPN, email, cloud services, internal applications, and building entry badges. Wherever possible, automate this deprovisioning so that disabling an account in the directory (or HR system) cascades to remove access across SaaS, cloud, and on-premise systems. Prompt, comprehensive access revocation prevents lingering credentials from becoming breach entry points.
  
• Use a Thorough Offboarding Checklist: Develop a standard offboarding checklist that covers both digital and physical assets. This checklist should include steps like: conducting an exit interview, reminding the employee of their ongoing confidentiality obligations, retrieving company laptops, phones, ID cards, and keys, collecting any USB drives or external disks, and confirming the return or deletion of company files from personal devices or accounts. According to industry research, 68% of organizations now use a compliance checklist during offboarding, if you don’t have one, create one and ensure HR and IT follow it every time. A structured process reduces the chance of something slipping through the cracks.
  
• Enforce Least Privilege and Access Reviews: Good security before and during employment pays off when someone leaves. Adopting the principle of least privilege means employees are only able to access the data and systems necessary for their job. If you limit privileges up front, a departing worker inherently has less sensitive information they could take. It’s also wise to conduct regular access reviews, auditing who has access to what, so that you’re not caught off guard by a user having far more access than you realized. By the time of offboarding, it should be clear what needs revoking. Role-based access controls and meticulous record-keeping of accounts make the offboarding task easier and more complete.
  
• Deploy Data Loss Prevention and Monitoring: Technical safeguards can catch suspicious activity by employees nearing departure. Data Loss Prevention (DLP) tools, for instance, can flag or block large downloads, email attachments to personal addresses, or USB file transfers. User behavior analytics can detect anomalies like a soon-to-be-ex employee accessing files they never usually touch. Monitoring “high-risk” individuals, such as those leaving for a competitor or those who had performance or disciplinary issues, is also prudent. By monitoring and analyzing activity, security teams can spot and stop an employee trying to siphon data in their final days. Some companies even implement a policy of reviewing logs for a few weeks after an employee leaves, to ensure no unauthorized access occurs post-departure.
  
• Educate and Set Expectations: Often, employees (especially non-technical staff) don’t realize that taking data when they leave is wrong or harmful, they may think, “I worked on this, why can’t I keep a copy?” Regularly reinforce in training and policies that all company data and accounts remain the property of the company. Make it clear that taking confidential information is against policy and possibly illegal. As one expert notes, employees should understand that corporate data belongs to the organization, not to individuals. Include these reminders in exit discussions as well. When people know there’s zero tolerance and potential legal consequences for taking data, they’ll be less likely to do it (or at least think twice). Cultivating a culture of integrity and security can deter casual data theft.
  
• Coordinate HR and IT Actions: Ensure HR, IT, and security teams work in lockstep for every departure. HR should notify IT as soon as a resignation is received or a termination is decided, so preparations can begin. On the exit day, IT should confirm that all access is disabled and document it. HR can assist by scheduling the exit meeting at a time when IT staff are available to hit the “disable” switch on accounts. Both departments should share responsibility for verifying that every item on the offboarding checklist is completed, from removing the person from email lists to collecting devices and keycards. In many companies, 78% of HR departments now partner with IT to ensure secure offboarding, reflecting the importance of this collaboration.
  
• Leverage Automation Tools: Managing dozens of SaaS apps and cloud platforms makes manual offboarding error-prone. Consider using IAM (Identity and Access Management) solutions or offboarding software that can automate the process of deprovisioning users across multiple systems with one action. Automation reduces the workload on IT staff and minimizes the risk of forgetting an account. Research shows companies with automated offboarding processes significantly reduce security incidents (by ~34%) compared to those relying on manual steps. Even simple scripts to disable or delete user accounts enterprise-wide can save time and enhance security consistency.
  
• Protect Data on Devices: For any company-issued device, have a policy and technical means to remotely wipe or lock devices that are not returned immediately. Laptops can be encrypted and managed so that if not checked back in, they become inaccessible. For BYOD situations (employee using personal phone/email), use mobile device management (MDM) tools that can selectively wipe corporate data from personal devices when a person leaves. Also ensure that any cloud storage or document-sharing accounts are transferred or secured, e.g., documents in a departing employee’s OneDrive or Google Drive for work should be moved to a manager’s control. Don’t forget to redirect or monitor the employee’s email for a period of time; many organizations will forward a leaver’s email to their manager or IT for a few weeks to catch any straggling business communications or signs of attempted misuse.
  

By following these practices, companies can greatly reduce the risk that an employee’s departure turns into a security breach. In short, make offboarding a rigorous part of your security strategy. As one set of security experts emphasizes, mitigating insider threats requires both policy and technology, from strict access controls and immediate lockouts, to employee education and active monitoring. When done right, secure offboarding ensures that when someone exits the organization, they truly exit all systems and data as well.

Employee turnover is inevitable, but data breaches are not. With proper precautions, a company can handle departures routinely without incident. The key is to treat every exit as a potential risk and to have a plan that neutralizes that risk. This means HR and IT working together, checklists and automation covering all the bases, and a company culture that stresses security and ethics. The reality is that employees come and go, but data security should remain constant. By implementing stringent offboarding procedures, monitoring for insider threats, and fostering a sense of responsibility around company data, organizations can protect their most sensitive information even amidst workforce churn.

In an age of high mobility, where talented staff may change jobs frequently and layoffs or restructuring can happen suddenly, proactive offboarding is just as critical as onboarding. Don’t let the last chapter of an employee’s time at your company be the opening chapter of a data breach story. With awareness and the best practices outlined above, businesses can confidently navigate staff transitions while keeping their crown jewels secure.

FAQ

Why is employee turnover a cybersecurity risk?

Employee turnover poses cybersecurity risks because departing staff may retain access to systems, data, and intellectual property. This can lead to intentional theft, accidental leaks, or misuse of credentials if accounts aren’t promptly disabled.

What are common mistakes companies make during offboarding?

Frequent mistakes include delaying access revocation, not updating shared passwords, failing to recover company devices, neglecting activity monitoring, and poor coordination between HR and IT teams.

How can companies prevent data theft when employees leave?

Organizations should revoke access immediately, use a comprehensive offboarding checklist, enforce least privilege access, monitor for unusual activity, educate employees on data policies, and use automation tools for account deprovisioning.

Can former employees still access company data after departure?

Yes, studies show many ex-employees retain valid credentials after leaving, sometimes for months. Without proper offboarding, they can log in undetected, putting sensitive data at risk.

What role should HR and IT play in secure offboarding?

HR and IT must coordinate closely. HR should notify IT of departures promptly, while IT ensures all accounts, devices, and access points are secured. Joint checklists help ensure no security gaps remain.