Fight Risk In A Highly Complex HR Compliance Landscape

In the world of HR compliance, risks and challenges are growing in parallel with the same kinds of issues found in compliance overall. Just as organizations have struggled to comply with stricter and more complex financial regulations, they are also fighting to comply with increasingly challenging HR laws and requirements.

Within HR compliance, management focuses most on hiring, payroll, benefits, employee relations, safety and termination areas. However, the areas of most concern are hiring practices, team member relations and employee safety.

While many organizations may put an emphasis on compliances such as finance, tax and accounting, HR compliance is an area that seems to be left unaddressed. In fact, a survey conducted by the ADP Research Institute sheds light on the alarming landscape in this area of compliance.

An Alarming Trend In HR Compliance

Over the last two decades, HR compliance issues have skyrocketed, with employment lawsuits rising 400% and costing companies an average of almost $500,000 in federal cases.

And these issues aren’t just impacting a select few organizations.

ADP’s survey revealed that over 50% of midsized organizations have reported at least one recent HR compliance incident, whether a complaint, charge or lawsuit.

If the current landscape frightens you, then you won’t be too thrilled to learn about the outlook of businesses and their HR managers regarding these issues. ADP also found that:

• ~50% of survey participants lack confidence in their ability to keep up with the ever-changing HR regulations and compliance requirements

• 67% of midsized businesses expect benefits regulations to become even more burdensome in the next three years

• 50% or more of the survey participants predict HR compliance to become even more challenging

Despite all of these concerns, what’s most alarming is the apparent lack of motivation to address these issues.

Alarmed, But Unmotivated To Take Real Action?

While the ADP survey revealed that many organizations seek professional advice in regard to HR compliance, few businesses have conducted an HR compliance audit to assess their risk and identify their issues.

Small businesses especially have not taken this essential step: 70% of respondents report that they’ve either never conducted such an external audit or were not sure, with 56% of midsized organizations reporting the same.

As we outlined in a previous blog post, compliance risk assessments are a critical component of an effective compliance program. It is also a natural first step in addressing your issues. Only once you’ve identified your high-risk areas are you reasonably equipped to address them.

The data is clear: HR compliance is wrought with risk. If you’re not taking action to solidify your global compliance program and mitigate your risks, your chances of suffering a noncompliance issue are great.

Download the 17-item checklist to learn how to fight compliance risk by building a formidable compliance program.