Compromised (breached or stolen) passwords cause over 80% of data breaches which makes them one of your Cybersecurity team’s biggest headaches. Hackers get in using stolen, weak, or reused (and easily breached) passwords.

For security, passwords are still necessary. They may eventually be replaced by technologies like biometrics or passkeys, but not yet. We use them for websites, apps, and more. As a result, companies need a secure way to share passwords with employees. They must also help them manage those passwords more effectively.

Safeguarding sensitive information has never been more critical in today’s world where Cybersecurity threats are rampant and growing. Properly managing passwords securely is a top priority. At the same time, employees deal with more passwords than ever. LastPass estimates that people have an average of 191 work passwords.

There is currently no way to get around passwords, so how do you safely share them with employees? One solution that has gained popularity in recent years is using password managers.

Once you’ve used password managers, it’s hard to see living without them, let’s explore the benefits they offer. We'll also delve into why it's one of the most secure ways to share passwords with employees.

Why should a business use a password manager?

Password managers store all the passwords that employees juggle in a secure digital vault, then open a small window offering to fill in the password when the user reaches an applicable login page. The business versions have setups for separating work and personal passwords. They also have special administrative functions so companies never lose a critical password.

Here are some of the reasons to consider getting a password manager for better data security.

Centralized Password Management

The ability to centralize password management is one of the main advantages of a password manager. They keep employees from using weak, repetitive passwords and from storing them in vulnerable places. Instead, a password manager stores all passwords in an encrypted vault. This centralized enhances security. It also streamlines the process of sharing passwords securely within a team.

End-to-End Encryption

Robust encryption techniques must be employed to protect sensitive data, and the leading password managers provide just that. End-to-end encryption scrambles passwords, turning them into unreadable text when stored and transmitted. This makes it nearly impossible for unauthorized users to access the information.

Encryption provides an important extra layer of security when passwords are shared with employees. It helps ensure that the data remains confidential even during transmission.

Main Features of Secure Password Sharing

The best password managers typically come with secure password-sharing features. They allow administrators to share passwords with team members without revealing the actual password.

In effect, employees can use the required credentials without seeing the actual characters, ensuring that users do not have direct access to sensitive information. This feature is particularly useful when onboarding new team members or when collaborating on projects that require access to specific accounts.

Multi-Factor Authentication (MFA)

Readers of the IT Support LA blog series have seen multi-factor authentication mentioned often – due to its importance, and many password managers support MFA. This adds an extra and important layer of security. MFA requires two or more forms of verification before accessing an account.

According to Microsoft, MFA significantly reduces the risk of unauthorized access lowering the risk by 99.9%. This makes it an essential feature for businesses looking to enhance password security, especially when sharing sensitive information with employees.

Password Generation and Complexity

If you don’t want to spend the time coming up with strong, complex passwords, a good password manager will usually have a built-in password generator. They create strong, complex passwords that are difficult to crack and save them for you. When sharing passwords with employees, employers can use these generated passwords. They ensure that employees are using strong, unique passwords for each account.

With this, you can preclude the widespread practice of using weak passwords. As well as reusing passwords across many accounts. This feature mitigates the risk of security breaches.

After all, do you want to follow the dangerous path of using the world’s most common password, ‘123456’ which can be cracked in Less Than a Second – or use something like ‘ImMLw0&23o&i5Mc’ – which PasswordMonster estimates would take 9 trillion years to crack. Trust me, cybercriminals don’t have that much patience.

Audit Trails and Activity Monitoring

Monitoring is a valuable feature offered by many password managers. It provides the ability to track user activity and access history. Admins can track who accessed which passwords and when. This provides transparency and accountability within the organization and is an important forensic tool if something damaging has happened.

This audit trail helps in identifying any suspicious activities. It also allows companies to take prompt action. This ensures the security of the shared passwords.

Secure Sharing with Third Parties

When third parties are involved in a collaboration, using a password manager is more crucial than ever, by offering secure methods for sharing credentials with the third-party collaborators or contractors. Companies can grant these external parties limited access to specific passwords. They can do this without compromising security.

This keeps control of the passwords within the organization.

You also never have to worry about losing a password when the only employee who knows it leaves.

Frequently Asked Questions

Do password managers actually know all your passwords?

Not the best ones. The top password managers use a zero-knowledge approach to securing your passwords and other information you store with them -- meaning that even the password manager itself can't access your passwords or other data, because everything is encrypted before it leaves your device – it can deploy the passwords at your request, but it can’t read them.

What is downside of using password manager?

If a user loses their master password or other identifying information, they could lose access to all of their passwords at once. Likewise, if your master password fell into the wrong hands, it would allow a bad actor to access any account saved in the password manager.

Password manager programs are a target for hackers. It's not easy to login using multiple devices. If the main password is used/typed/saved on a computer with malware, your main password can compromise all your other passwords controlled by the PM - all your passwords are only as secure as your master password.

As Shakespeare would say, “Ay, there’s the rub.”

Has a password manager ever been hacked?

It's important to remember that anything can be hacked – and that includes password managers – and they have been hacked before. OneLogin was hacked in 2017, and LastPass was breached in 2022. In March 2023, LastPass issued a statement that the breach resulted in unauthorized users gaining unencrypted access to customers' vault data, including information like usernames and passwords.

Which password manager has never been breached?

The ’no breach’ claim has been made by Keeper Password Manager. According to Keeper's website, it's never been hacked or breached. Because it uses the zero-trust, zero-knowledge system, it makes it a more secure product. All encryption and decryption happen on your device when you log in to the vault.

AdGuard provides a comparison of the top Password Managers for 2024 HERE.

How secure is your network?

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Ready to Try a Password Manager at Your Office?

Password managers offer a secure and convenient way to share passwords with employees. They’re an indispensable tool for businesses aiming to enhance their security posture.

By adopting password managers, businesses can protect their sensitive information. They also promote a culture of security awareness among employees. Investing in password management solutions is a proactive step toward safeguarding valuable data.

Need help securing a password manager? Give us a call today to schedule a chat and take advantage of our FREE network and Cybersecurity assessment.