The Human Resource (HR) is the heart of any organisation. It is the function that is responsible for identifying, hiring and retaining the talents that the organisation needs in order to execute its strategy and achieve its business goals. Essentially, HR is involved in the end to end employee lifecycle, from candidate sourcing through to retirement. The lesser known expectation of HR is its role within the organisation’s compliance structure.
What is compliance management?
As defined by Red Hat, a leading software MNC, compliance management is “the ongoing process of monitoring and assessing systems to ensure they comply with industry and security standards, as well as corporate and regulatory policies and requirements.”
Keeping up to date with employment laws and labour regulations is challenging for any organisation. As organisations evolve and expand, it is necessary to comply with the ever-changing regulations. Concurrently, HR is expected to treat employees fairly and ensure businesses operate legally. Non-compliance can result in hefty fines and potentially jail terms for senior management and executives.
In a nutshell, compliance management is important for organisations as they need to adhere to employment laws, regulations, and rules in all locations where the business operations. HR also have to adhere to fair employment practices and prevent potential workplace discrimination, while ensuring that employees are resonably compensated.
Challenges in compliance management
The biggest challenge in managing compliance is inconsistent practices and lack of awareness. Inconsistent compliance management practices makes it difficult for HR and business leaders to introduce new policies and processes to adhere with new regulations and rules. At the same time, HR may not be able to effectively track and improve existing compliance management practices. Lack of awareness also means that employees may not be well-equipped to manage non-compliance situations and or understand the severity of non-compliance.
Tips to manage compliance risk effectively
1. Follow industry standards
Benchmarking against industry standards is a great way to ensure that processes and policies are aligned with regulatory requirements. For example, conducting a market benchmarking to study the organisation’s current benefits provision against the external market helps the organisation to determine whether their existing benefits policies are in line with statutory regulations. Similarly, understanding what other organisations are doing in terms of process and system implementation allows organisations to ensure that they comply with industry standards.
2. Harness regulatory technology
Instead of having a patchwork of multiple systems to handle compliance, it is good to have a central platform that connects all HR platforms and processes. This not only helps to streamline processes and eliminates duplication, it ensures a consistent process in managing internal HR processes and simplifies ease of compliance management.
3. Monitor and review regularly
Gaps and new vulnerabilities can appear from time to time as organisations scale up and expand. Regular monitoring and review ensures that organisations are able to identify lapses promptly and take immediate steps to reduce the risk of non-compliance.
4. Conduct regular trainings
While organisations may have robust systems and processes in place to manage compliance risk, all would be in vain if employees are not well-equipped to manage non-compliance situations or unaware of ongoing changes in regulations. Conduct periodic trainings or roll out communication emails so that employees are keep abreast of ongoing changes in HR or employment legislations and laws.
5. Document non-compliance
In the unlikely event of non-compliance, ensure that the issue and mitigating actions are well-documented. Note down a summary of the key findings, potential root causes, and recommendations for the next course of action. This helps to track and ensure that a similar incident does not happen again.
A modern approach to compliance management
Organisations today are increasingly turning to new-age solutions such as web-based regulatory and compliance tracking systems to effectively manage the ongoing complexities of regulatory obligations. An ideal platform should comprise of the following:
- A single, integrated platform that tracks compliance issues
- Centralised data for easy access
- Scalable and adaptable approach that fits the organisation’s specific needs
- Intuitive employee interface that boosts efficiency and engagement