Harnessing Technology To Streamline HR Compliance

Today’s HR professionals know that just because complying with U.S. employment law is necessary does not make it easy. It is often time-consuming, complicated, and even stressful, according to our latest HR.com’s State of Legal Compliance and Employment Law 2024 report. 

But, our study also shows that some organizations excel in this area. We believe that it’s worth knowing how they accomplish this. 

 

A Time-consuming Obligation

Our new research — which was produced in partnership with Circa, experts in Office of Federal Contract Compliance Programs (OFCCP) compliance and diversity recruiting solutions — shows just how time-consuming legal compliance can be. 

Almost 40% of 211 responding organizations say their HR department spends 11-25% of the typical workweek on compliance, 21% spend 26-50% of the week, and 17% spend more than 50% of their time on this critical task. 

Spending more time isn’t always bad, of course, especially if it can keep the organization safe from lawsuits, fines, and government audits. However, HR has many obligations these days, so time spent on compliance can mean time away from its other critical duties.

More Sophisticated Compliance Systems

Time isn’t everything. Quality also counts. When at their best, HR compliance functions are characterized by documented and up-to-date processes, ongoing monitoring, proactive risk assessments, and the ability to anticipate future changes. 

However, as we can see in the chart below, only 31% of responding organizations meet all these criteria, which we associate with fully mature compliance processes. Other organizations need to continue to improve to meet this high standard.

The Role of Technology in Reducing Compliance Time

So, how can organizations develop high-quality compliance processes that spend enough — but not too much — time on compliance? There is not one simple answer to this question, but we think one piece of the puzzle is often the wise use of good technologies.

Automation is one of the benefits of adopting such technologies, though the adoption of automated compliance processes is still far from universal. Only 24% of organizations agree that their compliance processes are highly automated, and just 32% say they use up-to-date technologies. 

However, organizations with the most mature compliance functions, which we defined above as compliance leaders, are also considerably more likely than their least mature counterparts (compliance laggards) to use up-to-date systems that are highly automated. This can be seen in the graph below.
 

Questions to Consider

Given these findings, you may wish to ask the following questions about compliance in your organization:
 

• Have you audited, assessed and documented your compliance processes sometime in the last 12 months? Are these processes as effective as they might be?
• Have you done your research into which technologies might make those processes more efficient without losing (and hopefully improving) effectiveness? Among the aspects you can investigate are the degree to which a technology helps:

Technology's Impact on Compliance Reporting and Analytics

Beyond automation, technology can also improve compliance reporting, an area where many organizations say they are lacking. In fact, as can be seen in the graph below, only a quarter of responding organizations report that their reporting and analytics result in meaningful insights whereas nearly twice as many (45%) actively disagree that this is the case.

Yet, systems that streamline reporting and deliver actionable insights do exist. Compliance leaders are far more likely than compliance laggards to agree that their systems have these capabilities.

The Need to Stay Current with Compliance Regulations

Providing good reports and analytics also requires keeping up-to-date with ever-changing compliance-related laws and regulations. Our research finds that a third of organizations struggle mightily to keep up-to-date with compliance, rating six or less on a 10-point scale in this area. 

Here again, compliance leader organizations far overshadow their laggard counterparts. This means that they take advantage of systems that allow them to stay abreast of challenges such as:
 

• the growing scope of federal and state HR-related mandates
• changing interpretations of federal and state laws
• the complexity inherent in the legal system

Seeking Out the Right Resources

There are a variety of resources that can help in these areas such as service membership organizations that track information, relevant industry magazines and websites, consultations with internal or external legal experts, etc. 

Our research also shows that various technology and service providers can be good sources of information. 

For example, Circa’s OFCCP Contractor Portal can help organizations stay up to date with various changes to laws by providing notifications and resources to help employers stay informed about regulatory changes. 

Its OFCCP & DEIB Compliance for Talent Acquisition software regularly updates to align with the latest OFCCP guidelines and compliance standards.

Conclusion: The Future of Compliance

Our research supports the notion that, although many organizations feel as if they’re relatively well-prepared to deal with labor and employment compliance concerns, they also continue to face a range of challenges in this area. 

We think one response will be the ever-evolving technologies designed to help with such challenges. By using the best technologies well, HR professionals can free up valuable HR resources for other critical tasks even while strengthening the organization's overall compliance posture.

Please note that the findings and recommendations contained in this article are for informational purposes only. Nothing in this article should be construed as constituting legal opinions or advice. Please consult an attorney if you have questions about the legal requirements, rules, or regulations associated with any content discussed here.
 

---