Human Resources Compliance is Emerging as a Crucial Facet of Business

Long thought of as merely a business obligation, human resources compliance is emerging as an important aspect of a company’s core principles. Driving this paradigm shift are many factors including the increasing value of a business, higher consumer expectations, the need for additional risk mitigation, and the impact HR consulting plays on culture.

Aligning Compliance with Strategy, Purpose, and Values

Elevating and integrating compliance as a core feature to your People strategy is critical to ensuring compliance success. There is a widespread tendency in the business world to only address compliance from a reactionary state. That tendency creates messaging that compliance is a cost of doing business or an obligation, as opposed to an important value to a company.

Proactively embedding HR compliance into the fabric of your company elevates it to a strategic position that helps drive talent acquisition, retention and increased business as it establishes trust with your employees and customers. Making compliance a part of a company’s core values and brand messaging sets positive standards by which the company is driven and will abide.

When compliance becomes a focal point of strategy, employees know that their well-being is important to the company. Criteria are set by which the company will act to provide employees with a sense of safety, integrity, and security. Employees take pride in working for a company that incorporates their needs and well-being into its values. Additionally, it provides employees a guide as to the expectations placed upon them, framework for managers to utilize when addressing issues (ethical and otherwise), training opportunities, improved performance, and more.

When a company wants the best for its employees, brand awareness is heightened. A company with high ethical standards that champions compliance is a brand differentiator that establishes consumer trust, making it a solid business driver.

While regulatory and legislative requirements must always be a part of your People strategy and policies, expanding the scope of your strategy and policies with greater consideration to compliance will result in many internal and external benefits.

Compliance and Culture

These days, the importance of a company’s culture is prevalent.  Most leadership teams are great about visualizing their ideal company culture, but few understand how that vision actually lands throughout their company. Many teams are eager to put flowery words on paper to describe their company’s culture, but part of building culture starts with your commitment to less “glamorous” things, like compliance. This basic HR fundamental makes a large cultural impact.

Compliance can be integrated into culture in a variety of ways, including:

• Branding & Communications – whether you are drafting internal or external materials, the importance of compliance should be included in every piece of content that promotes company culture, from recruitment brochures and external newsletters to customer websites and social media posts. Demonstrate your company’s heightened commitment to employee well-being and high ethical standards through all marketing efforts. Let your communications set the standards by which employees will treat customers and vice versa. Using compliance as a branding tool is proven to be good for business, as customers want to do business with companies that have a culture of doing the right thing.
• Goals – when working with employees to set and meet goals, compliance should be a part of that process. Most, if not all, employees at a company are accountable for some aspects of compliance. Emphasizing an employee’s responsibility to compliance and working toward improvement and growth in that area will integrate compliance into company culture.
• Training – prioritizing training and developing your staff on the critical compliance issues is necessary to demonstrate the commitment to the value your company places on compliance. Learning key skills and developing competencies keeps employees engaged, which has a high impact on retaining top talent.

Compliance and the Remote Workforce

The move to a remote workforce was initially a stopgap in response to the pandemic. As we continue to shift to an intentionally remote workforce, compliance is also shifting.

Multiple compliance issues have and will continue to arise out of a remote or hybrid workforce, making it important to include compliance in your company’s evolving strategy, planning, and policies as they relate to working remotely. This includes cybersecurity, onboarding/offboarding, payroll considerations for multi-state and global employees, posting required HR materials, and so on. Policies and handbooks will need to be updated to reflect the new workforce environment, in addition to any SOPs that outline the company’s new best practices.

Keeping Up with Compliance

As compliance emerges as a core value and key strategy builder of a company, the legal and regulatory importance of compliance cannot be diminished. To ensure that you are compliant with all applicable laws and regulations that govern your business, we suggest some basic good housekeeping tactics:

• Annual HR Audit – whether you handle this internally or outsource to a company like PBO Advisory Group, once a year it is crucial to review all HR policies, procedures and materials, such as your employee handbook, and revise them as needed.
• Make sure to check local ordinance changes, in addition to state and federal updates. Much of the information pushed out to companies is broad based. Local jurisdictions also have laws that change regularly that aren’t well publicized.
• Minimum wage increases not only affect hourly employees but also have ramifications on exempt minimum salaries. Be sure to fully research and understand the minimum pay levels your company must meet.
• Utilize technology to help keep you in compliance. Whether you are using HRIS or another type of technology solution, let it work for you. HR technology is a vital tool that is continually updated as laws and court rulings change the compliance landscape.
• Whether you utilize PBO HR consultants, networking groups, or subscriptions to a variety to relevant sites, make sure to surround yourself with resources that will help you stay up-to-date with the latest laws and regulations.

Nicole Devine
Consulting Chief People Officer
nicole@pboadvisory.com
858-622-1681 Ext. 287