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~50% Of Businesses Suffering HR Compliance Issues

Posted on Aug 27, 2015 8:00:00 AM

ThinkstockPhotos-78158594Research from the ADP Research Institute reveals many eye-opening statistics that give warrant to the lack of confidence managing HR compliance requirements.

Perhaps no stat from ADP’s report – Competition, Cost Control & Compliance: Strategies to Navigate a Changing HR World – is more critical than this one:

52% of midsized companies suffered at least one HR-related incident (complaint, charge or lawsuit) between 2009 and 2011.

Considering the increased complexity and enforcement of regulations over the years, it stands to reason that this issue has persisted, or even become more prevalent.

With the development of formidable compliance solutions, it’s astounding that more than half of such organizations are failing to completely safeguard themselves.

Compliance Risks Increasing. Confidence Decreasing.

HR managers surveyed by the ADP Research Institute are losing confidence in their abilities to maintain complete compliance. The risk of violating FLSA and OSHA regulations and battling employee grievances is both severe and increasing.

There are many causes, and they go far beyond the simple fact that governing bodies are ramping up efforts to enforce their regulations.

The top concern contributing to this trend in HR compliance is the rising cost of compliance, and this phenomenon is especially burdensome to small businesses that have fewer resources to manage their compliances.

According to a TriNet whitepaper titled Top 5 HR Compliance Concerns for Small Business, small companies spend as much as 80% more per employee than large companies to maintain federal regulatory compliance. The ADP survey also reported that “64% of HR decision makers have other responsibilities and lack the time and resources to confront increasingly challenging compliance requirements.”

While larger enterprises may have sizeable compliance teams and the finances to leverage third-party support, small- and mid-size organizations are scrambling to maintain any semblance of an effective compliance program. And compounding the problem is the collective opinion that the burden of many HR compliance areas will increase within the next three years, especially:

  • Benefits compliance

  • Employee relations compliance

  • Hiring compliance

  • Risk and safety compliance

Coordinating And Streamlining Your HR Compliance Management

TriNet listed a lack of coordination between varying human resource functions and processes lacking requisite oversight as two critical concerns.

Especially in smaller organizations relying on few people wearing many hats and/or leveraging third-party support, having the ability to streamline and coordinate compliance efforts is essential. Of course, visibility into your compliance program is a critical component.

To alleviate these concerns, companies small and large are implementing global compliance solutions that fortify and simplify compliance processes. Unlike processes dominated by spreadsheets and paperwork, effective compliance programs leverage such solutions to eliminate the need for manual processes – processes that increase your compliance risk – and give you complete visibility of your program.

Considering the scary trend within HR compliance, it’s no wonder HR leaders are increasingly less confident in managing their compliances. But those organizations that have taken measures to streamline their HR and overall compliance processes offer a blueprint to businesses that are currently exposed to great risk.

Download the 17-item checklist to build an effective compliance program and mitigate your compliance risk.

Free Whitepaper: 17-Point Global Compliance Program Checklist