6 Cybersecurity Threats Facing Small Businesses

Quick look: It’s alarming but true—small businesses are a major target for cybersecurity attacks, with one-third of ransomware breaches affecting companies with fewer than 100 employees. Here are six cybersecurity threats every business leader should keep on their radar, along with how external partners can support organizations of all sizes in protecting themselves from online danger.

Cybersecurity threats are one of the most significant risks that employers face today. In recent years, there has been a substantial increase in the number and scale of cyberattacks on businesses, mainly due to the vast amount of sensitive data many organizations manage and store.

While most people tend to think of large, Fortune-500 organizations when it comes to cyberattacks and data breaches, small businesses face the same dangers and compliance challenges. In fact, during the first quarter of 2024, approximately one-third of ransomware breaches affected companies with fewer than 100 employees, and 43% impacted businesses with 101 to 1,000.

Given these trends, it’s critical for small business leaders to create a cybersecurity prevention strategy and remain aware of current information technology (IT) threats. Here are six of the most common cybersecurity threats facing small businesses and how a human resources (HR) outsourcing partner can help you stay secure.

1. Malware

Perhaps the most well-known cybersecurity threat today is malware, an abbreviated term for “malicious software.” Malware is designed to gain access to a computer or network without the knowledge of the owner or user.

When a computer is infected by malware, an external user can sometimes access the infected systems and sensitive files or information. Malware can also target mobile devices, so employers must take preventative measures to defend against this type of software.

The most common way a computer becomes infected by malware is by downloading an infected file. This can be done via email, website ads and pop-ups, and USB drives.

Having antivirus software installed on company computers and laptops is a great first step to preventing potential data breaches. It’s also recommended that regular training be provided for employees so that they know what to watch out for and what not to click/open.

• Malware fast fact: 4.1 million websites are infected with malware at any given time.

2. Ransomware

Ransomware is a type of malware that is becoming increasingly popular. In this type of cyber-attack, an external actor uses malicious software to lock certain parts of a computer from the owner.

The computer’s owner is told that the only way to unlock the files or device is by sending a payment to a specific account/address. However, paying the “ransom” often won’t guarantee that the ransomware will be removed.

Like other types of malware, employers must train employees on what they should and shouldn’t click on in emails or webpages. It’s also recommended to have virus/malware scanning software that reviews email attachments. This can help detect a potential threat before an employee opens it.

• Ransomware fast fact: From 2022 to 2023, ransomware attacks increased by 74%.

3. Phishing

Another common type of cyber threat is phishing. Much like malware and ransomware, phishing attacks try to trick internet or email users into clicking on something (usually a link) that will download the malicious software to your device.

Common phishing attacks include emails, website pop-ups, text messages, and instant messages. Some phishing attacks will even ask for personal information, which can be a significant problem for an individual who gets persuaded into providing it.

Once again, employers should educate employees on phishing attacks, what to look for, and preventative measures for company devices and networks.

• Phishing fast fact: Between 80-95% of cyberattacks start with phishing.

4. Social engineering

Social engineering, one of the most dangerous cyber risks, occurs from employee error instead of technical weaknesses. Social engineering relies on workers accidentally clicking on a phishing email, downloading a corrupted file, not using encrypted emails to protect sensitive information, or having weak passwords.

While the threat of malware attacks can be decreased through antivirus software and training, managing employee passwords can be more challenging for employers. A common way some business leaders address this is by requiring their staff to change their passwords after a certain period of time. Additionally, organizations can train their staff on password best practices to help keep computers and software secure.

• Social engineering fast fact: 74% of breaches involve the human element (i.e., human error, privilege misuse, use of stolen credentials, or social engineering).

5. Third-party breaches

It’s estimated that by 2027, freelancers will comprise over half the U.S. workforce. While these workers provide many benefits to organizations, they sometimes also open their clients’ networks up to vulnerabilities.

Cybercriminals may access corporate networks via less secure networks belonging to third parties, like freelancers, with privileged access. All employees, including contractors, should use secure Wi-Fi networks and multi-factor authentication (MFA) to combat this risk.

• Third-party breach fast fact: Over 60% of businesses have experienced a third-party breach.

6. Cloud-based attacks

The global cloud services market is slated to generate $2.5 trillion by 2031. Meanwhile, according to Thales’ 2024 Cloud Security Study, 44% of businesses have experienced a cloud data breach, making selecting reputable service providers more important than ever. Additionally, Thales discovered that almost half of the data in the cloud is sensitive, yet less than 10% of businesses have encrypted 80% or more of their cloud data.

Vulnerabilities also exist within the Internet of Things (IoT), or the countless devices worldwide that collect and share data through internet connectivity. While this has made technology and daily life easier for people, it also represents a major vulnerability for individuals and employers; a recent report found that IoT malware attacks have increased 400% year-over-year.

In addition to smartphones and tablets, common workplace IoT devices include security cameras, locks, thermostats, printers, smoke detectors, and more.

Once again, having strong and unique passwords across devices and routinely changing them is imperative. Companies should also closely monitor device and network settings and amend them as needed to decrease the chances of an IoT attack. Other IoT security tips include:

• Use IoT devices on separate networks to ensure they’re not connecting to any devices that store personal information
• Ensure all applications come from a trusted source
• Change default nickname settings on voice assistants
• Keep software and firmware up to date
• Only connect to familiar devices

• Cloud attacks fast fact: The average cost of an IoT cyber attack is over $330,000.

Cybersecurity for SMBs: how a PEO can help protect your network

The best way for SMBs to prepare for cybersecurity threats is to have a cybersecurity prevention plan in place. Small business leaders are typically focused on day-to-day growth and revenue generating activities, so having a team of trusted partners focused on safeguarding their networks can be useful.

Since many small employers don’t have in-house IT teams, they often turn to external providers to create help these plans and provide appropriate training and resources on improving security.

In addition to providing various HR services, their professional employer organization (PEO) may also help them protect their sensitive data. For example, ExtensisHR’s Information Protection Plan (part of its Employer Protection Plan) ensures a business’s technology platform is monitored and updated with the latest enhancements to cybersecurity, data protection, incident response, operational risk management, controls assurance, client security management, workforce protection, business resilience, third-party management, security testing and analysis, critical incident response team, and awareness training.

ExtensisHR also offers cyber liability insurance, which covers expenses to defend against damages resulting from liability to a third party or regulator from a failure in an SMB’s security, data breach, or privacy violation. This insurance covers costs including but not limited to replacing permanently impacted computer systems, restoration of digital assets, breach response, cyber extortion, business interruption, and extra expenses.

PEOs can also help educate employees on best practices for IT security. For instance, ExtensisHR’s Knowledge Cloud features on-demand access to immersive training on security awareness essentials, browser safety, classifying and safeguarding sensitive data for corporate and personal usage, and more.

With so many cybersecurity threats targeting small businesses, there’s no better time to partner with a PEO to defend your network. Contact the experts at ExtensisHR to learn more today.