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Table of Contents
Why SOC 2 compliance is important for businesses
The five trust service criteria in SOC 2 compliance
Who needs SOC 2 compliance?
The difference between SOC 2 Type I and SOC 2 Type II
How SOC 2 compliance impacts remote work and global hiring
Seven steps to achieve SOC 2 compliance
The risks of not being SOC 2 compliant
How Deel can help you achieve SOC 2 compliance
What is SOC 2 compliance?
SOC 2 (Service Organization Control 2) compliance refers to a set of standards developed by the American Institute of CPAs (AICPA) to make sure organizations securely manage data to protect client privacy and interests.
SOC 2 focuses on five Trust Service Criteria: security, availability, processing integrity, confidentiality, and privacy. These criteria are especially relevant for technology and SaaS companies that manage sensitive customer data.
Achieving SOC 2 compliance demonstrates your commitment to safeguarding data and maintaining operational integrity.
Why SOC 2 compliance is important for businesses
SOC 2 compliance is essential for businesses that handle sensitive data. It reassures clients and stakeholders that robust systems and processes are in place to protect their information.
This is particularly important for SaaS providers, cloud service companies, and IT services that operate in data-intensive environments.
CrowdStrike’s annual Global Threat Report highlighted the consequences of poor data security. 2023 saw a 110% increase in attacks by “cloud conscious” actors, in other words, by parties aware of vulnerabilities in cloud-based platforms. The report also described the growing threat from generative AI used to create fake accounts and identities.
With ever-more sophisticated cyber threats comes the need to develop increasingly robust security protocols. SOC 2 compliance provides you with the necessary assurance.
Key benefits of approaching an SOC 2 approach include:
- Building client trust: SOC 2 compliance signals that your company prioritizes data security, fostering stronger client relationships.
- Reducing data breach risks: Compliance measures minimize vulnerabilities, protecting sensitive information from unauthorized access.
- Gaining a competitive edge: Many organizations now require SOC 2 compliance from vendors before signing contracts, making it a key differentiator in the marketplace.
- Increasing business continuity: in the event of a natural disaster, or a major data breach, having a robust SOC 2 policy and procedures makes it easier to regain control, and take action to minimize downtime and security threats.
- Enhancing operational efficiency: The structured approach of SOC 2 ensures standardized processes, which can streamline operations and reduce inefficiencies.
- Meeting regulatory requirements: SOC 2 compliance aligns with various data protection laws, helping businesses adhere to regulations like GDPR or CCPA.
- Strengthening brand reputation: Demonstrating commitment to high security standards boosts confidence among clients, investors, and partners.
The five trust service criteria in SOC 2 compliance
The five Trust Service Criteria form the backbone of SOC 2 compliance. Here’s a breakdown of what each criterion requires:
- Security: Ensures systems are protected against unauthorized access, both physically and digitally. Examples include firewalls, multi-factor authentication (MFA), and employee training. Security measures must allow for cloud computing functions, and remote access across all assets.
- Availability: Confirms that systems operate as agreed upon in service-level agreements (SLAs). This might involve ensuring 99.9% server uptime for critical services.
- Processing Integrity: Verifies that systems process data accurately, completely, and on time. For example, preventing duplicate payroll transactions.
- Confidentiality: Protects sensitive information through encryption, access controls, and secure storage.
- Privacy: Governs how personal data is collected, used, and disposed of, ensuring compliance with privacy regulations like GDPR or CCPA. There should be explicit protocols for how long data can be stored, the individuals who should access it, and the purposes to which it can be used.
Together, these five Trust Service Criteria shape a 360° approach to security and privacy, providing you with a high degree of confidence in the organization.
Continuous Compliance™
Who needs SOC 2 compliance?
SOC 2 compliance is critical for any company that processes, manages, or stores client data, especially in cloud environments. As the volume of data that companies access grows exponentially, this becomes an increasingly challenging task.
According to Statista, 2024’s 149 zettabytes (149 billion terabytes) of stored corporate data is expected to soar to 394 zettabytes by 2028. This volume of data creates a significant challenge for organizations looking to build secure data repositories and processes.
Given the task's scale, it's not surprising that many people across the organization must actively participate in the compliance process.
Here’s a breakdown of the most significant stakeholders in SOC 2 compliance:
- HR Teams: Manage sensitive employee data, such as payroll and personal information. SOC 2 compliance ensures this data is secure, accurate, and up to date, reducing risks for employers. HR data leaks can seriously impact a company’s reputation and can lead to higher rates of staff turnover or bad press.
- IT Teams: Use SOC 2 as a framework for strengthening cybersecurity, standardizing controls, and monitoring threats. They may collaborate with expert third-party providers to deliver robust cybersecurity. Fulfilling the demands of an SOC 2 audit can through up points of weakness or vulnerability and help improve overall data hygiene and security.
- Legal and Compliance Teams: Depend on SOC 2 reports to validate vendor reliability and demonstrate adherence to privacy laws. A company’s reputation for taking cybersecurity seriously depends on its suppliers and collaborators too.
- C-Suite Executives: See SOC 2 as a tool for enhancing brand reputation, securing investments, and scaling operations securely. This is particularly important in sectors such as ecommerce, healthcare, fintech, STEM, plus any sector where IP protection is paramount.
- Data Centers and Managed Service Providers (MSPs). These businesses are reliant on having the highest standards of cybersecurity and communicating this to their clients or customers. Having SOC 2 Type II compliance in place contributes to such entities’ trustworthiness and esteem.
Any organization, whether private or public, overseeing large volumes of personal data, should aim for full SOC 2 compliance.
The difference between SOC 2 Type I and SOC 2 Type II
SOC 2 isn’t a homogenous concept. In fact, it breaks down into two different approaches, depending on the nature of the organization implementing it:
- SOC 2 Type I: Focuses on the design of systems and controls at a single point in time. It evaluates whether controls meet SOC 2 criteria but doesn’t assess their effectiveness. This approach might best suit a start-up or a newly created subsidiary looking to demonstrate baseline compliance quickly. Type I offers a snapshot of readiness but doesn’t provide insight into long-term reliability.
- SOC 2 Type II: Examines the operational effectiveness of systems and controls over a specific period (typically 3-12 months). It provides deeper insights into the organization’s ability to maintain compliance consistently. This type is more rigorous and comprehensive, requiring organizations to prove that their controls operate effectively over time. Companies with established operations often pursue Type II as it builds greater trust and credibility with clients and partners.
SOC 2 Type II reports are more comprehensive and provide stronger assurance for stakeholders. Once your company has been up and running for a short while, it is worth the additional outlay and investment of time to obtain this more robust certification.
Organizations targeting enterprise-level clients or managing highly sensitive data will find that a Type II report is often non-negotiable for securing large contracts or partnerships.
How SOC 2 compliance impacts remote work and global hiring
As remote work and global hiring grow, organizations increasingly rely on cloud-based tools for payroll, collaboration, and HR management. SOC 2 compliance ensures these platforms are secure and trustworthy, which is vital when handling employee data across borders.
For example, an HR team managing payroll for remote workers in multiple countries might use a cloud-based payroll platform. If this platform is SOC 2 compliant, it guarantees robust data protection measures, such as encryption and access controls, no matter where employees are located. This compliance builds confidence in global operations by minimizing data risks.
In the current work environment, many employees, even when not stationed overseas, work to a hybrid or remote model. This means they may be accessing secure platforms remotely, using mobile devices or laptops. All these remote working assets must be covered within an SOC 2 policy. Making sure employees adhere to security protocols and policies will be an important part of any SOC 2 audit.
Organizations need to ensure that data is protected during transfer between devices and that endpoint security measures are consistently enforced, such as through VPNs and device management software.

Seven steps to achieve SOC 2 compliance
SOC 2 compliance can seem daunting but, if approached in a methodical, step by step way, most organizations can comply with its strictures.
Achieving SOC 2 compliance involves these key steps:
- Scoping: Identify the systems, processes, devices, and data that will be evaluated against SOC 2 criteria. These must include in-house assets, cloud computing applications and storage, remote access points, and supplier links.
- Gap Analysis: Evaluate current controls and identify areas where they fail to meet SOC 2 standards. This involves HR and IT departments, and line managers, identifying procedural gaps and technical limitations.
- Implementation: Develop and deploy necessary policies, procedures, and technologies to address identified gaps. This can be a time-consuming process, but it is worth devoting time to getting effective protocols in place.
- Documentation: Maintain detailed records of systems, processes, and controls to prepare for the audit. These will be required by the certified public accountant designated to carry out the audit.
- Audit Preparation: Conduct a readiness assessment to ensure all controls are functioning as expected. A company might track the process of sample data through an entire lifecycle, to ensure that it remains secure at all stages.
- External Audit: Engage a certified third-party auditor to evaluate compliance. The auditor must be AICPA affiliated and fully independent from the organization being audited.
- Certification: Receive an SOC 2 report verifying that your organization meets the standards.
The timeline for a complete SOC 2 audit should be around three to six months, depending on the size and complexity of your organization.
The risks of not being SOC 2 compliant
Given the complexity and expense of achieving SOC certification, a startup or SMB might feel tempted to skip the entire process. This would be a major mistake. Failing to achieve SOC 2 compliance exposes you to the following risks:
- Data Breaches: Weak security controls increase the risk of unauthorized access and data theft. For example, hackers could exploit poorly configured cloud services to steal sensitive client information, leading to significant financial and reputational harm.
- Loss of Business Opportunities: Non-compliance may disqualify companies from partnerships or contracts that require SOC 2. For instance, a SaaS provider without SOC 2 compliance might lose a critical deal with a large enterprise client after failing to meet their vendor security requirements.
- Regulatory Penalties: Violating data protection laws like GDPR or CCPA can result in significant fines. A company storing personal data without adequate controls might face multi-million-dollar penalties after a data breach.
- Reputational Damage: A lack of compliance erodes client trust, especially if a data breach occurs. This can lead to public backlash and loss of existing and potential customers. For example, a data leak could go viral on social media, tarnishing the brand image overnight.
- Operational Disruptions: Non-compliance may result in system failures or interruptions. For example, inadequate monitoring could lead to undetected malware, causing prolonged downtimes and loss of productivity.
- Legal Liabilities: Clients affected by a data breach could file lawsuits, resulting in costly legal battles and settlements. A high-profile legal case can drain resources and further damage the company’s reputation.
Skipping SOC 2 compliance is not just a financial risk—it can jeopardize your company’s future by undermining trust and operational stability.
Deel IT
How Deel can help you achieve SOC 2 compliance
Deel IT simplifies the complex process of achieving SOC 2 compliance by offering you:
- Centralized Dashboards: Monitor security controls in real time.
- Automated Compliance Tracking: Reduce the burden of manual monitoring and reporting.
- Audit-Ready Reporting: Generate comprehensive reports with minimal effort.
Deel IT’s solutions streamline compliance, helping your organization save time and build client trust. Book a demo to see how Deel IT can support your SOC 2 compliance journey.