HR Tech’s Role in Compliance – Disruptor or Enabler?

Is technology a boon or bane for compliance? We look at emerging trends, and how tech can help HR teams navigate these murky regulatory waters

Compliance doesn’t always take center stage for HR, but it’s a critical and ongoing function. While successful recruitment, high retention rates, and low attrition are important KPIs, they have to be offset by a secure and compliant HR ecosystem.

And non-compliance in HR could have a huge impact on the bottom-line – a wrongful termination suit could set a business back by USD 500,000 and for discrimination lawsuits, the numbers go up to millions.

Clearly, HR compliance has to be reinforced – but an emerging wrench in the works is technology. The digitalization of everything has disrupted the world as we know it, and it’s no different for HR. With the majority of HR processes now automated, digitalized, and moved to the cloud, there is a unified environment that’s easy to access – both from inside the organization and out of it.

Hackers are gradually beginning to exploit these vast data reservoirs to tap into sensitive employee information. So, along with digitalization, comes the need to formulate a data privacy compliance plan as well.

What this also means is that HR and IT teams must look at closer collaboration if they are to set up a tech infrastructure that’s cutting-edge, but fully compliant.

Another area of concern is change management. Tech adoption leads to rewritten regulations, followed by digital enhancement to cope with new rules, and so on – a continuous cycle.

This requires HR managers and compliance officers to monitor social media, online publications, and bulletins for updated information. Being aware of compliance infringement cases could also prevent lapses. In short, tech evolution is turning compliance from the traditional checklist-based practice, into an ever-changing practice.

The upside is that while technology does introduce a metaphorical wrench, the same wrench can also be used to tighten the gears. Here are 6 key HR tasks that could become more compliant, using digital solutions

Add transparency to convoluted paper processes

Compliance has always relied on large portions of paperwork, from Tax forms, employee handbooks, disciplinary actions, health forms, to other documentation. All this can now be stored electronically, not only adding space, but enabling quick retrieval when needed – for audit purposes, for instance.

These are also easier to classify and organize, in line with regulatory norms.

Provide reports, on time and without fuss

Having a dedicated solution in place makes it easier to generate reports, without having to manually sift through and assemble all the necessary information.

Compliance software – or even robust, end-to-end HR tools – support report generation for the benefit of regulators, auditors, or legal teams.

Monitor regulatory updates and process changes

With new mandates constantly being stacked, the technology could prove invaluable for keeping track of all these changes. The rules are automatically fed into the systems, processes are reconciled, documents filed, and anomalies flagged for resolution.

This creates a truly transparent pipeline where each participant has full visibility over what’s happening.

Conduct effective training and maintain records

A fundamental tenet of compliance is training – since several non-compliance acts are a result of simply not knowing the protocol, companies are charged with keeping their workforce trained on all compliance aspects.

For HR, this includes sexual harassment, diversity, safety, wellness, and more. The company must also be able to show, in case of an audit, that all employees underwent the training.

A learning management system (or LMS) can help streamline the process – all sessions and assignments are automatically recorded, including performance testimonials and certification. Having a third-party LMS vendor also helps keep the system updates, at minimal costs or efforts.

Recruit without bias

Recruitment bias has been plaguing businesses for a while now and because hiring depends on human decision making, there’s always a chance of personal opinion, seeping in.

Modern tech tools are increasingly adding a compliance layer, using advanced tools to spot biases in job posts. This could help recruiters avoid errors, and in the long run, prevent expensive and protracted litigation risks. And having a diverse, compliant workforce could also help boost productivity by a wide margin.

Maintain accurate timesheets and synchronize with payroll

An electronic leave, attendance and payroll platform can keep HR departments in line with leave acts, paid leaves, overtime pay, logged-in hours, and other regulations. And as global workforces begin to go remote, maintaining accurate records will become increasingly harder.

An automated system allows accurate time and wage tracking, preventing conflicts with employees and auditors.


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