A Glossary of Key Technical and Legal Terms in HR Tech Procurement and Governance
In the rapidly evolving landscape of HR technology, understanding the technical and legal terminology is no longer optional—it’s foundational. For HR and recruiting professionals, navigating vendor contracts, data privacy regulations, and system integrations requires a clear grasp of these terms. This glossary provides essential definitions, tailored to help you make informed decisions, mitigate risks, and leverage technology effectively within your organization. Equip yourself with the knowledge to protect your data, ensure compliance, and build resilient HR tech ecosystems.
Service Level Agreement (SLA)
A Service Level Agreement (SLA) is a contractual commitment between a service provider (e.g., an HR tech vendor) and a client (your organization) that defines the level of service expected. Key metrics often include uptime guarantees, response times for support requests, and problem resolution targets. For HR and recruiting, a robust SLA is critical for ensuring the continuous availability of essential platforms like applicant tracking systems (ATS) or HRIS. It sets clear expectations, provides recourse if service standards are not met, and is a cornerstone of vendor accountability, directly impacting operational efficiency and candidate experience.
Application Programming Interface (API)
An Application Programming Interface (API) is a set of rules and protocols that allows different software applications to communicate and exchange data. Think of it as a digital messenger service, enabling disparate HR systems—like an ATS, HRIS, and payroll platform—to “talk” to each other seamlessly. In an automation context, APIs are vital. They facilitate the automated flow of candidate data from a career site to an ATS, or employee information from an HRIS to a benefits provider, eliminating manual data entry, reducing errors, and accelerating processes. Understanding a vendor’s API capabilities is crucial for successful integration and future-proofing your HR tech stack.
General Data Protection Regulation (GDPR)
The General Data Protection Regulation (GDPR) is a comprehensive data privacy law enacted by the European Union (EU) that governs how personal data of EU residents is collected, processed, and stored. Even if your company isn’t based in the EU, if you recruit or employ EU citizens, GDPR applies. Key principles include lawful processing, data minimization, transparency, and data subject rights (e.g., right to access, rectification, erasure). For HR and recruiting, GDPR mandates strict consent mechanisms, secure data storage practices for candidate and employee data, and clear data processing agreements with HR tech vendors. Non-compliance can result in substantial fines and reputational damage.
California Consumer Privacy Act (CCPA)
The California Consumer Privacy Act (CCPA) is a state statute designed to enhance privacy rights and consumer protection for residents of California. Similar to GDPR, it grants California consumers the right to know what personal information is being collected about them, the right to request deletion of that information, and the right to opt-out of its sale. For HR and recruiting professionals managing a workforce or candidate pool in California, CCPA compliance means implementing robust data mapping, establishing clear processes for handling data subject access requests (DSARs), and ensuring HR tech vendors also comply. This legislation significantly influences how HR handles employee and applicant data, requiring careful attention to privacy notices and data management practices.
Data Minimization
Data minimization is a core principle in data protection that dictates organizations should only collect and process the minimum amount of personal data necessary to achieve a specific purpose. For HR and recruiting, this means critically evaluating every piece of information requested from candidates and employees. Do you truly need a social security number at the initial application stage? Is a full list of hobbies relevant for every role? Implementing data minimization reduces the risk associated with data breaches, simplifies compliance with privacy regulations like GDPR and CCPA, and fosters trust. It encourages building efficient processes that collect only essential data, enhancing data security and operational streamlinedness.
Consent Management
Consent management refers to the process of obtaining, recording, and managing individuals’ agreement for the collection, processing, and storage of their personal data. In HR and recruiting, this is vital for interactions with candidates and employees, especially concerning sensitive data or data shared with third-party vendors. Effective consent management ensures that individuals clearly understand what data is being collected, why, and how it will be used, and provides them with mechanisms to grant or revoke consent. Automation tools can streamline this by integrating consent forms directly into application processes or onboarding workflows, maintaining an auditable trail, and ensuring compliance with privacy regulations like GDPR, where explicit consent is often required.
Vendor Risk Assessment
A Vendor Risk Assessment (VRA) is a systematic evaluation of potential risks associated with engaging a third-party vendor, particularly those handling sensitive data or critical business processes. For HR tech, this involves scrutinizing a vendor’s security posture, data privacy practices, financial stability, compliance certifications (e.g., SOC 2), and disaster recovery plans. A thorough VRA helps HR and IT teams identify vulnerabilities before onboarding a new ATS, HRIS, or payroll provider. It’s a proactive measure to protect sensitive employee and candidate data, ensure business continuity, and maintain regulatory compliance, preventing potential data breaches or service disruptions.
Data Retention Policy
A Data Retention Policy outlines how long specific types of data should be kept and when they must be securely disposed of. In HR and recruiting, this policy is essential for compliance with legal obligations (e.g., EEOC record-keeping requirements), industry standards, and privacy regulations like GDPR and CCPA. It dictates, for example, how long candidate applications, interview notes, or employee records are stored before being archived or purged. Implementing a clear, automated data retention schedule for HR tech systems reduces the risk of retaining unnecessary sensitive data, minimizes storage costs, and demonstrates a commitment to responsible data governance and privacy.
Incident Response Plan
An Incident Response Plan (IRP) is a documented strategy and set of procedures for how an organization will prepare for, detect, respond to, and recover from a cybersecurity incident, such as a data breach or system outage. For HR and recruiting, whose systems hold highly sensitive personal information, a robust IRP is non-negotiable. It outlines who is responsible for what actions, communication protocols (internal and external), forensic investigation steps, and data recovery procedures. A well-rehearsed IRP minimizes the damage from security incidents, ensures timely notification to affected individuals and authorities, and protects the organization’s reputation and legal standing, maintaining trust with candidates and employees.
SOC 2 Compliance
SOC 2 (System and Organization Controls 2) compliance is an auditing procedure that ensures service providers securely manage data to protect the interests and privacy of their clients. It’s based on the Trust Services Criteria: Security, Availability, Processing Integrity, Confidentiality, and Privacy. For HR and recruiting professionals, choosing HR tech vendors that are SOC 2 compliant offers assurance that their systems and processes meet rigorous security and operational standards. This third-party verification significantly reduces the risk of data breaches, improves data governance, and demonstrates a commitment to protecting sensitive candidate and employee information entrusted to the vendor, streamlining your own compliance efforts.
Multi-Factor Authentication (MFA)
Multi-Factor Authentication (MFA) is a security enhancement that requires users to provide two or more verification factors to gain access to an application or online account. Instead of just a password, MFA might require something you know (password), something you have (a phone or hardware token), or something you are (biometrics like a fingerprint). For HR and recruiting, implementing MFA for all HR tech systems—ATS, HRIS, payroll, and background check platforms—is a critical defense against unauthorized access. It dramatically reduces the risk of credential theft, protecting sensitive employee and candidate data from phishing attacks and other cyber threats, thereby strengthening overall data security.
Data Portability
Data portability is the right for individuals to obtain and reuse their personal data for their own purposes across different services. Under regulations like GDPR, this means individuals can request their data in a structured, commonly used, and machine-readable format, and have the right to transmit that data to another controller. For HR and recruiting, this impacts how candidate and employee data is managed. Organizations must ensure their HR tech systems can export data effectively and efficiently to comply with data subject access requests. This emphasizes the need for vendor systems with robust export functionalities and open APIs, facilitating a smooth transfer of data should an individual choose to exercise this right.
Automated Decision-Making (ADM)
Automated Decision-Making (ADM) refers to decisions made solely by technological means, without human intervention, that produce legal or similarly significant effects on individuals. In HR and recruiting, ADM includes algorithms that automatically filter resumes, score candidates, or even predict job performance. While ADM can enhance efficiency, it raises significant ethical and legal concerns, particularly regarding bias, transparency, and fairness. Regulations like GDPR require individuals to be informed when ADM is used and provide a right to human intervention. HR professionals must critically evaluate ADM tools, ensure algorithmic transparency, mitigate bias, and understand the legal implications to ensure equitable and compliant hiring practices.
Legacy System Integration
Legacy system integration refers to the process of connecting older, often proprietary, software systems with newer applications and technologies. In HR and recruiting, many organizations still rely on established HRIS or payroll systems that may lack modern API capabilities or cloud-native features. Integrating these legacy systems with newer HR tech (like modern ATS, onboarding platforms, or AI-powered tools) is crucial for creating a unified data flow and automating end-to-end processes. This often involves complex data mapping, custom connectors, or middleware solutions. Successfully integrating legacy systems enables organizations to leverage existing investments while benefiting from new technologies, driving significant efficiency gains and eliminating data silos.
Interoperability
Interoperability is the ability of different computer systems or software applications to communicate, exchange data, and use the information that has been exchanged. In the context of HR tech, high interoperability means your ATS, HRIS, payroll, benefits administration, and other systems can seamlessly share data without significant manual effort or data conversion issues. This is fundamental for building an efficient, automated HR ecosystem. When procuring HR tech, assessing a vendor’s commitment to open standards and robust API documentation is key. Strong interoperability reduces data entry errors, streamlines workflows, provides a single source of truth for employee data, and ultimately enhances operational agility across the HR function.
If you would like to read more, we recommend this article: The Unsung Heroes of HR & Recruiting CRM Data Protection: SLAs, Uptime & Support
