Staying compliant in an HR department is a big job. It means that on top of managing the workplace needs of your employees, you’re also navigating the constantly changing compliance requirements that protect those employees’ sensitive information. We’re here to reassure you that if compliance feels like a huge weight on your shoulders, you’re not alone.
That’s why we recently spoke with human resources experts about the biggest challenges businesses face when it comes to HR compliance and asked for their best tips on how to use technology to simplify compliance.
Risk Management and Regulatory Compliance
Kyle Healy, vice president of corporate development at NFP, explained that maintaining compliance in an HR department is ultimately a form of risk management for the entire business. That’s because HR compliance eliminates the possibility of facing unexpected operating costs like penalties for poor tax recordkeeping or costly lawsuits due to illegal hiring, firing, and compensation practices.
Some of the most common compliance risks businesses face today, Healy told us, are keeping up with the constantly changing landscapes of federal health care and minimum wage as well as navigating employment classifications when more and more employees are working remotely than ever before. If an HR audit uncovered non-compliance in any of these areas – like paying employees less than the required minimum wage or not offering qualified health care benefits – a business could be looking at some hefty fines and back payments.
So how can you assess whether your company is at risk for non-compliance? Healy says the most important risk management strategy is self-awareness – being honest about your company’s internal limitations and whether you have the capacity to pinpoint and mitigate potential risks in-house.
For the best defense against non-compliance, Healy recommends partnering with an external company like NFP which can provide a compliance risk assessment consultation and recommend appropriate strategies to fill the gaps that a compliance audit would highlight.
Then once you’ve identified the potential compliance risks in your HR department, a partner like MetaSource can set you up with the right digital solutions to mitigate them.
As Ed Krow, co-founder of Turbo Execs, puts it: “HR generates a lot of paper. The more paper you have, the more you’re at risk of that paper getting into the hands of people who don’t need it. By digitizing your documents [and storing them in] an online or cloud-based repository, you’re able to lock down security for HR paperwork much easier.”
So how do you digitize those documents? With document scanning. Document scanning allows you to convert paper HR documents into electronic files to eliminate security risks. Once your documents are digitized and stored locally or in the cloud, they’re more secure and protected from fire, flood, and loss, and you won’t need to waste any more space holding onto the paper originals in order to stay compliant.
Cloud Document Management
Once your documents are digitized, where do you store them? Like we mentioned above, you’ve got two options: in-house or in the cloud. With cloud document management, you’ll have secure access to your I-9s, W-2s, medical records, and other sensitive documents from any computer or mobile device. You can access and share HR files easily when you need them, and they’re securely stored but out of sight when you don’t.
Replacing paper-based forms with e-forms means you’re removing paper from the equation entirely and still storing and managing your documents according to compliance guidelines – like keeping employment applications for one year after submission. The extra benefit to e-forms is that the data entered into them can be automatically shared with your existing human resource management (HRM) system, eliminating the need for manual data entry and making data automatically available for analysis and reporting.
With workflow automation you can automatically move time-critical documents like applications, performance reviews, and benefit requests through the approval process. Workflows make it easier for management to see where each document is in the process and automatic alerts ensure staff are aware of the actions required to ensure each document is processed in a timely manner.
For example, workflow automation is perfect for managing I-9 documents, for which the Department of Homeland Security maintains strict compliance requirements. A workflow can check that I-9s are completed and approved before new employees come on board and trigger an alert if they aren’t, taking human error out of the equation completely.
What are the top business compliance concerns in your HR department? After this overview, do you see document scanning, cloud document management, e-forms, or workflow automation being able to address those concerns?