Why is HR compliance essential for employees?
In all organizations, one of the most important roles of human resources (HR) is compliance management. This HR concept refers to the application of legal rules and regulations governing the relationship between employers and employees. These laws may be enacted by national, regional or local legislative bodies, and guarantee equality in the workplace and the protection of workers' rights. From banning child labor to setting minimum wages and allowing workers to join trade unions, labor law has made a significant contribution to improving workers' work-life balance.
From the employer's point of view, compliance officers act as mediators who continually encourage organizations to align their employees' expectations with the applicable law.
An analyst's perspective on HR compliance
Compliance rules apply to a wide range of corporate and employee behaviors. Organizations are subject to laws and regulations governing a variety of areas, including business practices, accounting standards, occupational health and safety, environmental standards, equal opportunities, sexual harassment, industrial relations, and confidentiality.
Very often, due to the administrative costs associated with complying with regulations, compliance can be perceived as an obstacle to growth efforts, or as having a negative impact on set objectives. Ultimately, compliance measures are seen as a bureaucratic burden and a performance-limiting factor. As a result, organizations tend to ignore the detrimental impact of non-compliance on employees.
When employees arrive at work, they need to feel secure in the knowledge that there are laws in place to protect their rights with regard to pay, vacations, breaks, health and safety, and equal opportunities.
While not all employers comply with the laws, and not all employees necessarily know where to turn in the event of abuse, workers generally provide their services to employers in the belief that the world of work is governed by relatively fair rules.
What does HR compliance entail?
Compliance is the first step in creating organizational ethical standards: a set of best practices aimed at treating employees well. Indeed, some organizations seem interested in implementing ethical standards applicable to their workforce in order to address employee dissatisfaction. According to a 2014 Gallup poll, nearly 70% of American workers don't feel involved in their jobs.
Moreover, many perceive an imbalance between the value companies place on their employees and the value it places on maintaining competitiveness, increasing profits and maximizing shareholder value. This kind of sentiment can come to outweigh the importance and value of morality and personal well-being.
In response, concepts such as corporate socialresponsibility (CSR) and sustainable development have become increasingly important within corporate culture. And, while compliance is the foundation of these initiatives, it is not sufficient on its own. It is essential that compliance measures are accompanied by efforts to stimulate and improve the organization's ethical practices.
Focusing on compliance without considering the ethical substructure can lead to feelings of "what's the minimum I should respect?" among employers and employees alike. This approach outweighs ethical considerations and yields few results in terms of improved working conditions and job performance. For example, it will be impossible to feel personally effective in a working environment where the employer respects the law, but fails to recognize the contribution of its teams in achieving profits. Employees are unlikely to feel comfortable expressing themselves openly and transparently in a company that rewards good performance, but is notorious for its law-breaking actions and high fines that put the group at risk.
For an organization to gain the trust of its employees, managers must also understand the importance of business values such as openness and transparency (from the ethical point of view of the latter). Showing that these values are important makes employees feel more at ease.
In short, management's commitment to compliance and business ethics is often the foundation of the company's growth, productivity and overall success.
The technological perspective
From an administrative point of view, compliance requires organizing and filing a considerable number of documents and forms, in the most efficient way possible. Companies must regularly submit these documents to government agencies, and they must be easily retrievable for HR compliance audit purposes.
Keeping up to date with legislation means that companies need to be aware of the many annual changes. For example, last year in the USA, a series of amendments to applicable laws altered the minimum wage, health benefits and marital status of certain workers. Although feared, changes in legislation reflect social change. With these social changes come expected or unforeseen issues that require governments and decision-makers to take action.
It's clear that HR experts must turn to automation to meet these compliance challenges. Professional software suppliers who invest in the automation of HR functions generally call on legal experts to ensure that the application complies with legislation. In this way, suppliers limit the risk of non-compliance by their customers. These applications typically offer predefined compliance process parameters, data validation tools and integrated forms.
HR compliance applications offer a clear advantage: employee files are typically written using compliance data and meet storage requirements. In this case, sensitive information is protected and easier to access in the event of an audit or compliance report. Compliance applications cover areas such as equal opportunities, affirmative action, mandatory training and so on. Their dashboards can therefore offer information on team diversity and equality aspects that are not immediately visible to talent managers.
The point of view of HR software publishers
Vendors need to adapt their software's functionalities and compliance options not only to their customers' business expectations, but also to current legislative requirements. Unsurprisingly, vendors are doing their utmost to automate compliance functions to ensure consistency and efficiency in onboarding practices, particularly with regard to government recruitment requirements.
One vendor commented: "The consistency offered by automation makes it easier to recruit employees, speeds up onboarding and can also strengthen the protection of new recruits against discriminatory hiring practices. For example, a procedure that complies with the U.S. I-9 rule allows the new recruit to provide the document of his or her choice from the list of documents deemed acceptable by the government, and does not impose a standard document to be provided."
Vendors tend to agree that automated, simplified and transparent compliance functions can improve employee morale, as well as that of their line managers. Many point to the benefits of SaaS tools, so that employees can understand that regulations are being complied with for their own good.
Article translated from French