Does your company handle sensitive data or is involved in data monitoring of individuals? Then it will typically be required to hire a DPO according to regulatory standards like the GDPR. How much will this cost you? That’s what we’ll answer in this article.
If this is your first time hiring a DPO, here’s what data protection officer costs you can expect.
Let’s dig right in.
What are the Data Protection Officer Costs?
DPO costs will inevitably vary depending on many factors, such as the:
Size of your business
Industry
Country
In-house or DPO as a service (DPOaaS)
DPO’s pricing model
Full-time or part-time DPO
And more
Average DPO Costs by Company Size
Depending on the size of your business, the cost of hiring a DPO can vary from $40,000 to around $150,000.
Company size
DPO annual cost
Small businesses (<50 employees)
$40,000 – $80,000
Medium businesses (50-250 employees)
$60,000 – $120,000
Large businesses (>250 employees)
$80,000 – $150,000
DPO Cost by Industry
Of course, as you can see, there’s a lot of overlap here, so it’s not all based on the company size.
For instance, you might have a small business and still pay $80,000 per year for a DPO service, the same as some large businesses.
Data protection officer costs by industry might give us a clearer picture.
Industry
DPO annual cost
Non-profit and education
$60,000 – $100,000
E-commerce and retail
$70,000 – $120,000
Government and public
$80,000 – $140,000
Tech Industry
$90,000 – $150,000
Pharmaceutical and healthcare
$80,000 – $140,000
Financial services
$100,000 – $180,000
Professional services (legal, accounting)
$80,000 – $140,000
Manufacturing
$60,000 – $100,000
Ensure your company becomes compliant with Captain Compliance, the most cost-effective compliance solution. Talk to our experts now.
DPO Cost by Country
When it comes to DPO costs they will also greatly vary from country to country, depending on the labor size, living costs, regulatory requirements, and other factors.
Here’s a quick overview of DPO costs by country:
Country
Average annual DPO pay
United States
$80,000 – $150,000
Canada
C$70,000 – C$150,000 (1C$ = $0.75)
Australia
A$90,000 – A$150,000 (1A$ = $0.66)
United Kingdom
£50,000 – £100,000 (1£ = $1.27)
Germany
€60,000 to €120,000 (1€ = $1.09)
France
€50,000 to €100,000
In-House vs External DPO Cost Comparison
Many companies, faced with the requirement to hire a DPO, look to cut costs by appointing someone from within to the position.
Of course, there are pros and cons to both an in-house and an external DPO.
When you’re hiring an external data protection officer, you only pay for what you use, or in other words, for their hours.
For the in-house DPO, on the other hand, you are paying for the insurance, pension, benefits, and bonuses since they are your employee at the end of the day.
On top of that, you also have to consider the potential training and education costs, certifications, and software that your in-house DPO will need. These all add extra to the final tally.
However, the benefits are that they are much more familiar with your business (less time getting familiar with the business), and they can be more cost-effective if doing two roles (provided there’s no conflict between them).
Data privacy and security company DataGuard made a cost comparison for an in-house and external DPO using a business with low to medium data protection requirements in London.
Based on their calculation, a part-time in-house DPO, working 20% time as a DPO, had a total cost of £15,084 or $19,220, while a full-time external DPO had a total annual cost of £2,100 or $2676.
Are Data Protection Officers Worth it?
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One common question business owners often have is, “does my business need a data protection officer?”
Or, in other words, is it worth hiring a DPO?
The answer is yes, especially if your business is a medium-large sized business that handles lots of data!
The average data breach cost in 2022 was $4.35 million, according to UpGuard, which was 2.6% up from the year prior ($4.24 million).
Compare that with the average annual DPO cost of around $80,000. That’s over 50 times less!
Then, there are also the fines. GDPR fines for data violations go from 2% of the businesses’ annual global turnover or €10 million for less severe violations to 4% of the business’s annual global turnover or €20 million for more severe violations.
So far, the highest GDPR fine was paid by Amazon in 2021 – €746 million, followed by Meta in 2022 (€405 million).
Hiring a DPO brings several benefits to your company, including:
Ensuring compliance with relevant data protection laws
Identifying and managing data privacy risks
Helping your consumers exercise their data privacy rights
Providing expertise and guidance in data protection and privacy
Establishing a data protection and compliance culture in your organization
Taking charge in the event of data breach incidents and coordinating with relevant authorities, stakeholders, and consumers
Evaluating and monitoring third-party vendors
Enhancing your organization’s reputation and showing commitment to protecting customers’ data
Want to hire an effective yet cost effective data protection officer? Get in touch for a free demo.
What is the Best Way to Hire a Data Protection Officer?
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There are several ways to hire a data protection officer, and which one you’ll use will depend on the needs of your business, industry, and market requirements, DPO qualifications, region, and other factors.
It’s important to take all of these into account and find the best pricing model for your business,
Here are the six most common DPO pricing models:
Full-time – When hiring a full-time DPO, the company will include their salary and benefits into its payroll expenses
Part-time – A part-time DPO will work a set number of hours per week or month. This model can help companies with less need for data protection save costs
Outsourcing project-based – A DPO may also charge a fixed price per project. This can vary depending on the duration, scope, and complexity of the project
Outsourcing hourly to a contractor – Another option when hiring a DPO is to outsource services to another company, whose price will again differ based on their expertise, duration, or complexity
Outsourcing by retainers – This is another popular DPO pricing model in which the company will pay a fixed (monthly or annual) fee to keep the data protection officer on a retainer and use their skills when necessary
Hybrid – Finally, a company can opt for a hybrid model in which, for example, they have an in-house DPO that handles day-to-day regulatory compliance, internal audits, and compliance monitoring, while an external DPO provides training and education
FAQs
How Much Does it Cost to Get GDPR Compliant?
The cost of GDPR compliance can depend on several factors, such as:
Potential data security risks your company is facing
Categories of data you are processing
Number of organizations (vendors) you are sharing the data with
The amount of time you retain data
Are you transferring data to non-EU countries?
Do you handle children’s data?
Based on these factors, you may need to:
Assign a DPO
Take a data processing inventory
Conduct a risk management and gap analysis for data protection
Create new or update existing data protection policies and procedures
Monitor compliance
Train employees
Can Anyone be a Data Protection Officer?
A DPO can be hired from within the organization or externally.
The typical career path of a DPO looks as follows:
Education (a degree in IT, data protection, law, or computer science
Specialization and obtaining relevant training and certification like CDPO (Certified Data Protection Officer)
Understanding relevant data protection laws like GDPR and CPRA
Practical experience in roles such as compliance officer, data or privacy analyst
Transitioning to a DPO role
Staying up-to-date with data privacy regulations and continuing professional development
How Much Do Data Protection Officers Make in the US?
The average data protection officer salary in the United States is $109,093 per year or $52 per hour as of June 30, 2023.
Can I be My own DPO?
You can hire a data protection officer from your company. However, you need to ensure that they are fully independent and that their role as a DPO does not conflict with any other roles they may have in your company.
Can a DPO be Fired?
According to GDPR’s Article 38(3), you cannot dismiss or fire a data protection officer for simply performing the necessary tasks.
How Can Captain Compliance Help?
There’s no doubt that the benefits of hiring a DPO far outweigh the cons. So, who should you choose? The answer is clear – Captain Compliance.
Captain Compliance provides the most cost-efficient outsourced data protection officers on the market, period.
Captain Compliance has the most experienced yet affordable data protection officers to help your business with its compliance needs.
Get in touch with us today to ensure your data gets protected.
