How should security teams decide between hardware security keys and passkeys for different user groups?

Use hardware security keys for high risk roles, regulated environments, and shared or unmanaged devices where physical possession matters. Use passkeys for everyday workforce and consumer logins where convenience, cross device access, and lower user friction are priorities. Many organisations deploy both, reserving hardware keys for administrators and passkeys for broader passwordless adoption.

Why This Matters for Security Teams

Choosing between hardware security key and passkeys is not just a usability decision. It is an access assurance decision that affects phishing resistance, device trust, recovery risk, and how much control security teams retain over privileged sign-in. Current guidance from the NIST Cybersecurity Framework 2.0 and modern phishing-resistant authentication patterns points to matching the factor to the user’s risk and operating environment, not forcing one method everywhere.

Hardware security keys are strongest when physical possession must be proven on a controlled device, especially for administrators, regulated workflows, and shared or unmanaged endpoints. Passkeys reduce friction and improve adoption for broad workforces, but their security profile depends heavily on device binding, platform protection, and recovery design. That is why NHI Management Group treats this as part of broader identity governance, not a single-factor procurement choice. The same logic appears in NHI security research, where weak credential handling remains a recurring failure mode; for example, The Ultimate Guide to NHIs shows how often organisations struggle with lifecycle control and visibility.

In practice, many security teams discover the tradeoff only after an account recovery path, roaming device setup, or admin login workflow becomes the easiest place to bypass the stronger control.

How It Works in Practice

The practical decision starts with user group classification. High-risk roles, privileged administrators, finance approvers, and users on shared or unmanaged devices usually warrant hardware security keys because the key provides a tangible possession factor that is harder to clone or silently migrate. Everyday employees, contractors with managed laptops, and consumer-facing users are often better served by passkeys because they improve enrollment and reduce password reuse, while still supporting phishing-resistant authentication when implemented correctly.

In a mature program, the security team maps each group to one of three paths:

• Hardware security key only for privileged or high-assurance access
• Passkeys as the default for standard workforce access
• Both, where administrators need stronger step-up authentication and everyone else needs lower-friction sign-in

The operational question is less about the factor label and more about the assurance properties. Passkeys can be device-bound or synced across devices, and that distinction matters. Synced passkeys improve recovery and portability, but they also shift part of the risk to the cloud ecosystem used for sync and account recovery. Hardware keys reduce that dependency, but they create operational overhead for issuance, spare inventory, lost-key recovery, and travel scenarios. Guidance from NIST CSF 2.0 supports that kind of risk-based control selection, while the State of Non-Human Identity Security illustrates a broader identity pattern: security teams consistently underinvest in lifecycle controls until exposure is already visible.

Teams should also align sign-in choice with recovery policy. If passkeys are used broadly, recovery must be resistant to social engineering, because weak fallback methods can erase the benefit of the stronger authenticator. These controls tend to break down in highly mobile workforces using unmanaged personal devices because recovery, device trust, and account re-enrollment become the weak link.

Common Variations and Edge Cases

Tighter authenticator controls often increase help desk load and onboarding friction, so organisations must balance stronger phishing resistance against operational support cost. That tradeoff is especially visible in mixed-device environments, merger scenarios, and regulated business units that cannot standardise endpoints quickly.

There is no universal standard for this yet. Best practice is evolving toward a layered model: hardware keys for administrators and other high-assurance users, passkeys for mass adoption, and explicit exception handling for shared workstations, service desks, and BYOD access. Where legal or contractual requirements mandate strong possession evidence, hardware keys remain the safer default. Where user experience and scale matter more, passkeys usually deliver better adoption without forcing password resets or extra token management.

Security teams should pay close attention to recovery and enrollment, because that is where the strongest authenticator can be undermined. Recent NHIMG research on JetBrains GitHub plugin token exposure and Hard-Coded Secrets in VSCode Extensions reinforces a simple lesson: identity controls fail fastest when convenience pathways leak trust faster than administrators can revoke it.

Related resources from NHI Mgmt Group

• How should security teams govern API keys used for generative AI access?
• How should security teams decide where to use syncable passkeys versus device-bound keys?
• What is the difference between passkeys and hardware security keys in enterprise MFA?
• How should security teams prioritise NHI remediation in cloud environments?