How HR functions can fuel proactive organizational compliance efforts

HR now plays a vital role beyond traditional boundaries, safeguarding organizations from legal pitfalls amid regulatory changes and fraud risks.

In brief

• With evolving workplace dynamics, HR functions have leaped ahead from merely recruitment to diverse strategic and tactical roles that can safeguard organizations from legal and ethical pitfalls.
• Employment fraud being on the rise, onboarding process is highly vulnerable to new age fraud, at this point HR functions can mitigate risk by hiring verified candidates with right credentials and work history.
• Through regular training sessions and workshops, HR teams can inform the workplace about new regulations and their impact on business to ensure compliance.

Over the last decade, the business landscape has become complex, undergoing a plethora of changes to keep up with evolving consumer needs. From adopting rapidly advancing technology to retaining market value, organizations have learned how to stay at par with the competition. Additionally, there has also been a significant increase in fraud incidences, which has spurred unprecedented regulatory updates during this period of rapid growth. Compliance Management has become more than just a box-ticking exercise, and there is increased emphasis on proactive compliance that can act as a business differentiator. Already burdened compliance teams can struggle to track evolving regulations and implement and monitor new processes to ensure adherence. There is no arguing that compliance reporting needs to become a collaborative effort. In such a scenario, Human Resource functions can play a vital role in setting the tone for compliance efforts and ensuring policies and guidelines are being followed. 

With evolving workplace dynamics, HR functions have leaped ahead from merely recruitment and employee management to take on diverse strategic and tactical roles that can safeguard organizations from legal and ethical pitfalls. They work in tandem with legal teams to curate comprehensive policy and its enforcement such that it can address emerging compliance requirements such as anti-discrimination, workplace safety, diversity and inclusion, and data privacy. Since they are the first point of contact for new employees joining the workforce, they can take on the responsibility of fostering a culture of compliance right at the beginning, building teams that prioritize adherence to guidelines.

Through regular training sessions and workshops, HR teams can inform the workplace about new regulations and their impact on business, the purpose they serve for organizations, and processes being implemented to ensure compliance. This process will help inculcate a compliance culture in the organization such that it becomes every employee’s responsibility. Employee compliance training will encourage proactive participation in the compliance process and lay a foundation of ethical decision-making, along with reducing the risk of inadvertent policy violations. 

One of the more critical pieces that HR teams play in completing the compliance puzzle is during talent recruitment. Apart from complying with the employment law by keeping the hiring process unbiased, fair, and free of discrimination, HR leaders can help maintain the integrity of the hiring process. With employment fraud on the rise, the onboarding process is highly vulnerable to new age fraud such as exaggerated resume, interviews using deepfakes, submission of fabricated documents, misleading credentials, hidden criminal records. At this point, HR functions can use it for risk mitigation by hiring verified candidates with the right credentials and work history.

With the advent of tech-powered background checks, HR teams can leverage AI and ML insights to vet candidates’ claims on resume, documents, references, qualifications, experience—all in one place. HR compliance automation solution can help reduce the errors that mar manual background verification as well as provide a better turnaround time than lengthy physical checks. This process ensures that the candidate being hired is compliant with the requirements, as per the company policies. While fraud detection is the primary goal of the background check process, it can also be positioned to check for culture and values match, aiding HR teams in hiring candidates that align with the company ethos. Tech-led tools can also be leveraged as workplace compliance solutions to detect and remediate moonlighting issues in the bud.

Since HR functions are at the forefront of employee relations, they also play an undeniably important role in conflict resolution. With companies now implementing sexual harassment act, grievance redressal and whistleblowing mechanisms, encouraging employees to report gaps or flag irregularities, falls with the HR team. This includes reassuring them of adequate action and their safety during the period when the allegations are investigated. By promptly addressing complaints and ensuring fair conflict resolution, HR teams can foster an environment where employees don’t shy away from speaking up, along with mitigating the likelihood of unsavory legal compliance disputes in human resources.

HR functions can take it upon themselves to lay a foundation for organizational compliance initiatives and establish a culture of adherence to rules and policies. With the help of HR teams, compliance strategies can transform from reactionary to proactive, equipping companies to adapt new regulations seamlessly.