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How to Deal With Rising Regulatory Requirements

CoAdvantage-One growing problem facing employers today, especially at smaller organizations, is insufficient capacity to deal with rising regulatory requirements.

That’s the finding from Deloitte’s most recent State of Compliance survey. Nearly nine out of ten (87%) of respondents said the compliance function at their organizations had “no spare resource capacity and [was] therefore at a point where [they] cannot continue to deliver against … continually increasing expectations.”

Directly related, 39% of respondents cited resource capacity or capability as their biggest challenge, more than double the second most commonly cited challenge (regulatory change, at 19%).

Interestingly, the survey also found a disconnect between the most needed compliance-related skills and current areas of competency. It turns out that the most important skills to compliance – influencing, communication, stakeholder management – were often the respondents’ areas of greatest weakness.

So, what can employers do when demands outstrip their capacity?

1: Lay the right foundation

Take steps to do things right from the very beginning to avoid painful, expensive, time-consuming cleanup later. This means that employers need to lay a solid foundation of policies, processes, and procedures that govern compliance-related activities. How this translates into action will depend on the specific area of compliance. For example, compliance related to requirements set by the Occupational Safety and Health Administration (OSHA) will be easier to meet if the company lays out strong guidance, clear direction, and good training for all employees from the start.

2: Ruthlessly prioritize

Make sure the most impactful tasks are completed first. If your organization is forced into a position of making tradeoffs or sacrifices due to resource shortages or capacity limitations, make sure the work that does get done will have the greatest benefit and/or avoid the most significant penalties.

3: Identify specific constraints

“No spare resource capacity” is obviously a serious challenge, but it’s also a nonspecific one. Where are the areas of actual need? For example, are there just not enough people to get the job done? Is there insufficient funding for compliance-related expenses? Is there a skills or proficiency gap? Are compliance officers missing needed tools or equipment? It might be possible mitigate or even resolve specific constraints, but you have to identify them first.

4: Get help

One of the best ways to increase capacity is to get outside help. Vendors and Professional Employer Organizations (PEOs) with experience in labor law compliance can provide expert guidance, tools, and technology. They can also help any in-house staff with work overload. Most resource constraints boil down to time, budget, labor, and material limitations. An outsourcing partner can often help with all four.

CoAdvantage, one of the nation’s largest Professional Employer Organizations (PEOs), helps small to mid-sized companies with HR administration, benefits, payroll, and compliance. To learn more about CoAdvantage’s ability to create a strategic HR function in your business that drives business growth potential, contact us today.