Cybersecurity Hiring in Response to Data Breaches

Privacy and Security, Networks, the Internet, and Cloud Computing, Internet and Media and Content

Article Snapshot


Sarah Bana, Erik Brynjolfsson, Wang Jin, Sebastian Steffen and Xiupeng Wang


SSRN (March, 2021)


Data on firm-level hiring shows that firms increase hiring of cybersecurity workers following data breaches, particularly when the press covers the breach.

Policy Relevance

Publicity improves incentives for firms to invest in safeguarding customer data.

Main Points

  • Data on online job postings and data breach events shows that firms that suffer a data breach are more likely to post cybersecurity-related job postings; however, the effect is smaller than optimal to safeguard data.
  • Firms’ incentives to invest in data security are insufficient due to misaligned incentives and market failure.
    • Customers and investors cannot monitor firms' cybersecurity investments.
    • The negative effect of data breaches on firms tends to be small.
    • Few customers stop dealing with firms when they have a data breach.
  • Some researchers report that regulations requiring firms to report data breaches increase firms’ investments in security and reduce identity theft, but the laws are inadequately enforced.
  • Data from Google Trends and the MIT Media Cloud Project shows that a data breach with high media visibility is three times more likely to spur a firm to post a cybersecurity job listing than a low-visibility data breach.
  • Data breaches spur hiring of cybersecurity workers in service sectors such as finance, insurance, and retail trade, but not in construction and manufacturing; in the service sector, breached data consists of sensitive consumer data such as credit card information, and breaches draw attention from the press.
  • Public firms, which face more regulation and public scrutiny than private firms, are more likely to respond to a data breach by hiring cybersecurity personnel than are private firms.

Get The Article

Find the full article online

Search for Full Article