Four Compliance Trends Every HR Leader Should Know In A Tight Labor Market
Tangible actions business leaders need to consider to stay compliant
Posted on 01-30-2020, Read Time: Min
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We’re in the midst of one of the tightest labor markets in 50 years with an unemployment rate of 3.5%. Combined with an increasingly globalized and competitive marketplace where workers can afford to be selective, employers find themselves having to navigate with precision a variety of new requirements and regulations to stay competitive.
These larger issues have had a significant impact on compliance, with changing dynamics posing significant, new challenges for employers. To ensure their compliance policies are air-tight across the globe in the coming year and beyond, businesses need to understand four major trends and adapt to best meet the challenges they present.
The Trends to Watch
1. Accountability for Social Policy
Conversations surrounding human capital management when it comes to minimum wage/living wage, predictable scheduling laws, pay equity, paid and unpaid leaves, employee health benefits and financial literacy benefits have intensified. The new legislation, such as the upcoming amendment to the Fair Labor Standards Act (FLSA), will bring workplace benefits under a microscope on local, state and federal levels. Today, key legislation like the FLSA, FMLA and Affordable Care Act (ACA) affects a large swath of American businesses and their employees.
2. Workforce Planning and Management
A historically low unemployment rate, the widening skills gap and the rise of the gig economy are all byproducts of a time where disruption is the rule, not the exception. Accordingly, HR leaders need to refine their talent and recruitment strategies to meet the challenges of today’s changing workforce. According to SHRM, 83% of HR professionals say they had difficulty recruiting suitable candidates in the past 12 months. To manage this growing need, HR decision-makers should seek guidance and support from strategic partners to navigate compliance, especially as it relates to worker classification.
3. Allowable Pay / HR Practices
Today, organizations’ diversity and inclusion efforts are front and center. Pay equity, for example, is one area among many that employers are considering much more closely as it’s widely considered to be a critical part of employers’ recruitment and retention plans. According to a survey by Glassdoor, 67% of job seekers said a diverse workforce is important when considering a prospective employer. However, as leading organizations are pushing for greater diversity and inclusion standards, some companies can struggle with staying compliant with the latest legal requirements.
4. Transparency, Communication and Education
Transparency is becoming increasingly important, not only for business operations, but for attracting top talent, as job seekers rate transparency as a top quality they look for in a potential employer. Additionally, many current employees feel that an increase in transparency coupled with more effective internal communication can drive stronger engagement and build lasting connections between themselves and their employer.
This coupling of transparency and effective communication can also have a major impact on compliance. By continually reinforcing the importance of compliance and transparency from top to bottom in an organization, business leaders can instill strong values centered on accountability, leading to an increase in compliance across the board.
This coupling of transparency and effective communication can also have a major impact on compliance. By continually reinforcing the importance of compliance and transparency from top to bottom in an organization, business leaders can instill strong values centered on accountability, leading to an increase in compliance across the board.
Best Practices Going Forward
While managing compliance can seem like an overwhelming challenge to overcome, there are tangible actions business leaders can take to make sure their organization is fully compliant and staying ahead of the trends:
- Hire the right HR talent: A good compliance strategy begins with hiring experienced HR staff. Regulations are constantly changing, and those changes require an HR team that is actively apprised of the evolving ecosystem and driving compliance awareness at all levels of the organization.
- Keep up with new and changing regulations: Adhere to notice and recordkeeping requirements and create transparency and traceability, including a process for dispute resolution.
- Educate and train supervisors and managers: There is a wide variety of educational options available to help manage and understand compliance. HR teams must prioritize education, not just for themselves but on an organizational level to ensure compliance behavior is second nature from top to bottom.
- Create an employee handbook and update it regularly: As they say, knowledge is power. To meet an increasingly complex compliance ecosystem, HR managers need to prioritize their employee handbook and work to update it regularly to reflect changes in regulation.
- Perform scheduled HR compliance audits: It’s important to constantly evaluate the HR function to make sure it’s meeting all compliance requirements. Hosting regular audits allows organizations to identify where their compliance approach may be lacking or in need of change.
- Establish governance: Ensure that your governance process encompasses oversight, efficiency and effectiveness with respect to HR strategy, related policies, and programs to help optimize business results. This includes responding to dynamic and complex regulatory and compliance changes to create a competitive advantage.
- Communicate: A robust and comprehensive internal communications strategy and implementation are essential to managing compliance today. Changes to benefit, policies and regulations should be communicated with the utmost transparency and clarity to better encourage true comprehension and agreement among the employee population.
- Choose the right solution: With many companies offering human capital management solutions, employers will need to look not only at what the product can do, but what is behind the solution, including system management, support, integration and the service delivery model that will help keep them compliant. This will impact the buying process and how companies determine what solution is right for their business.
Looking Ahead
Given that, these days, it seems as if the only constant change, we expect to see more movement on the regulatory landscape in the coming years, as well as continued shifts in workforce expectations. As we embark on a new year, now is the ideal time to think strategically and plan ahead. Remember that employment laws are constantly evolving, this includes federal, state, and local laws. So, it is important for you to continuously monitor new developments that may apply to your business. These laws can be complex and hard to follow, so, when in doubt, please consult with your internal or external legal counsel.
Author Bio
| Sushma Tripathi is the Vice President of Strategic Advisory Services at ADP, LLC. Visit www.adp.com Connect Sushma Tripathi Follow @sushmatrip |
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