Lack of time and resources oftencauses HR and payroll compliance professionals to cutcorners—exposing their organization to unnecessary risk, accordingto “The Risky Business survey” by The Workforce Institute at KronosInc. and Future Workplace.

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The survey of 812 HR and payroll professionals found that morethan half (55 percent) have witnessed compliance activities bytheir colleagues that created unnecessary risk. A majority (66percent) of payroll professionals and 51 percent of HRpractitioners say their organization occasionally cuts corners thatmay jeopardize compliance, including more than two-thirds (69percent) of all respondents whose systems are more than five yearsold.

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Large organizations (2,500 to 9,999 employees) are the biggestoffenders, as more than two-thirds (68 percent) of respondents saythey have seen colleagues cut corners when it comes to compliance.More than half (58 percent) of organizations with 1,000 to 2,499employees, 56 percent of organizations with 500 to 999 employees,and half of organizations with fewer than 500 employees reporttaking shortcuts that may jeopardize compliance.

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“HR and payroll professionals are among the most thoughtful,passionate, and meticulous professionals within any organization,”says the institute's executive director Joyce Maroney. “They don'tcut corners because they're careless: Usually it's because they'reoverburdened, understaffed, or lack the proper resources requiredto handle anything above and beyond the day-to-day activitiesrequired to run the department.”

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The survey finds that, on average, HR and payroll departmentsspend roughly 36 hours per week on compliance-related activitiesranging from tracking regulatory proposals to creating andcommunicating new policies—enough work for a dedicated full-timeemployee, according to the institute.

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Organizations with fewer than 500 employees average 23 hours perweek on compliance duties, while those with 500 to 999 employeesaverage 31 hours per week. It increases to 36 hours per week fororganizations with 1,000 to 2,499 employees.

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“Many HR practitioners and payroll professionals feel likeregulations are changing at the speed of light,” says MalysaO'Connor, Kronos' senior director, HR and payroll practice group.“They're working hard to keep pace but the technology that they'resurrounded with is often outdated or doesn't provide the agilityand efficiency needed to adapt to changing laws.”

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Organizations utilizing newer solutions spend nearly 10 fewerhours per week on compliance (34 hours per week with a solution oneto five years old versus 43 hours per week with solutions more thanyears old). And that time could be better spent: With a singlemajor regulatory change often costing businesses between $40,000and $100,000, HR and payroll professionals have a long list ofpriorities they would tackle if they could spend less time andmoney on compliance.

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Nearly half (47 percent) of the respondents say maintainingmultiple, duplicate employee records leads to increased compliancerisk. The survey found that organizations maintain an average offive separate records per employee and dedicate 32 hours per weekon manual, duplicate data entry. About three-quarters of surveyparticipants (74 percent) agree that cloud solutions are bestsuited to support today's continually changing compliancelandscape.

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“New policy changes can be a significant burden for companies ofall sizes,” says Dan Schawbel, partner and research director,Future Workplace. “They can create stress, consume productivity,and force HR to take shortcuts that end up costing organizationseven more money in the future.”

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From: BenefitsPro

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