Why is HR compliance essential for employees?
In all organisations, 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 that govern 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 labour to setting minimum wages and allowing workers to join trade unions, labour law has made a significant contribution to improving the work-life balance of workers.
From an employer's perspective, compliance officers act as mediators who continually encourage organisations to align their employees' expectations with the applicable law.
An analyst's perspective on HR compliance
Compliance rules apply to a wide range of business and employee behaviours. Organisations 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, organisations tend to ignore the negative impact of non-compliance on employees.
When employees arrive at work, they should feel secure in the knowledge that there are laws in place to protect their rights in relation to pay, holidays, breaks, health and safety, and equal opportunities.
Although not all employers comply with the laws and not all employees necessarily know where to turn if they are being abused, 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 organisational ethical standards: a set of good practices aimed at treating employees well. Indeed, some organisations 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 do not feel involved in their jobs.
In addition, many perceive an imbalance between the value companies place on their employees and the value it places on maintaining competitiveness, increasing profits and maximising shareholder value. This type of sentiment can override 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 organisation's ethical practices.
Focusing on compliance without considering the ethical sub-structure can lead to feelings of "what is the minimum I should respect?" among employers and employees. This approach overrides ethical considerations and achieves little 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 does not recognise the contribution made by its teams in achieving profits. Employees are unlikely to feel comfortable expressing themselves openly and transparently in a company that rewards good performance, but has a reputation for breaking the law and imposing heavy fines that put the group at risk.
For an organisation to gain the trust of its employees, managers must also understand the importance of business values such as openness and transparency (from an ethical point of view). Showing that these values are important makes employees feel more at ease.
In summary, management's commitment to compliance and business ethics is often the foundation for the company's growth, productivity and overall success.
The technological perspective
From an administrative point of view, compliance requires a huge number of documents and forms to be organised and filed 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.
Remaining compliant with legislation means that companies need to be aware of the many changes that occur each year. For example, last year in the US, a series of amendments to applicable laws changed 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 is clear that HR experts need to use automation to meet these compliance challenges. Professional software vendors who invest in the automation of HR functions typically use 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 generally offer predefined compliance process parameters, data validation tools and integrated forms.
A clear advantage of HR compliance applications is that employee files are typically written using compliance data and have 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, positive discrimination, 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
Publishers need to adapt their software's functionality and compliance options to meet their customers' business expectations, as well as current legislative requirements. Unsurprisingly, vendors are doing their utmost to automate compliance functions to ensure consistency and efficiency in onboarding practices, particularly in relation to government recruitment requirements.
As one vendor put it: "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 US I-9 rule allows the new recruit to provide the document of their 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