Being a transitional economy in India, we are placed rightly on a trajectory of growth with a combined impact of governmental reforms, strong focus on inflation and support of benign global commodity prices. In such an evolving marketplace, SMEs that employ more than 60 percent of the country’s workforce is feeling the pressure of regulatory and compliance requirements.
Unlike large organizations, SMEs often overlook human resource compliance, which is potentially the most serious and a costly issue. They lack time and resource to build infrastructure or processes that are beyond core their business objectives.
Top 5 HR compliance issues that small and medium sized companies commonly struggles with include:
1) Lack of workforce litigation address
2) Current regulations and laws are not being followed
3) Multiple HR policies and procedures to follow with no qualified guidance
4) Paperwork administration with substantial errors
5) HR functions are not being coordinated
Better HR compliance transforms into greater business credibility and profitability
An example of growing businesses has proved that HR plays a strategic role in running organization’s compliance programs based on prevalent regulations and norms. Insights on labor regulations, working knowledge and expertise of various compliance and regulatory requirements, etc. are keys towards building credibility. Compliance and ethics programs must be embedded into an organization’s culture to prevent liabilities that rise from non-compliance.
What makes an effective compliance program?
Simply keeping a HR policy is not adequate. The real challenge arises when deploying and enforcing workplace policies in an organization, across departmental and geographical boundaries.
The four pillars of effective compliance program each company must follow include:
- Periodic education and training on complex and evolving HR regulations
- Self-auditing and monitoring
- Enforcement, discipline and incentive programs
- Response and prevention
The compliance program can be evaluated through regular surveys, benchmarking by employing focus groups to measure employee understanding.
The Role of the HR Department
HR compliance landmines can be avoided simply by careful advance planning. For small and medium businesses, it can be managed effectively with outsourced expert support. Regulatory requirement and compliance can be met by automation of HR processes. HR automation ensures error-free human capital management.
Advanced HCM automation software from PeopleWorks is highly successful in handling prevalent HR compliance requirements as well as labor regulations with technology-enabled services including payroll, benefits administration, etc. In addition, the solution provides assistance with various aspects of employer-related risk management and compliance.
HCM automation not only prevents costly errors, it also guarantees satisfaction and productivity of the workforce.