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http://www.hreonline.com/images/SteveBoese106x106.jpgCan Compliance Be Compelling?

While "boring," "mundane" and "unglamorous" are three words typically used to describe compliance issues, a case should be made for including another adjective: "compelling."

Friday, April 12, 2013
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Compliance is boring and mundane, but it might be an opportunity that small to mid-size businesses are missing.

I want to clearly state for the record, I don't think about HR compliance all that much. I mean, I have a general understanding of some of the basics -- I9s, W4s and such -- but when the discussion gets much deeper than that, I start getting that blank expression, similar to when Uncle Ted tells me the story about how he saw Mickey Mantle play at Yankee Stadium, the same story he's told for 29 years straight. It's an interesting story; it just doesn't seem to get more interesting with each passing year.

So it was with that kind of detached, slightly jaded (and hopefully not-too-glazed-over) eye that I spent some time recently talking, thinking and pondering HR compliance issues at a user forum sponsored by a Equifax Workforce Solutions, a division of Equifax -- well-known for their work in the credit-score business, (another subject that I admit is kind of groan-inducing for me). The company had invited me to this event featuring some of its customers.

After talking to a few Equifax executives, product leaders and customers, I have to admit -- while not being completely convinced of the long-term glamour and sexiness of compliance -- I did leave thinking there might just be more to such things as tax-credit screening, work-opportunity requirements and (a personal bane I will get to in a moment) individual state-regulatory requirements. Is it possible that compliance can be, if not exciting, at least compelling?

Here's my case in defense of its being at least the latter -- it's a weak argument, singular and anecdotal; but since it happened to me, it must have universal relevance and appeal.

A couple years ago, I had responsibility for management of the human resource information system for -- depending on your definition of "mid-size" -- a mid-size technology-products-and-services company. (At around 3,000 employees, we were the kind of company some solution providers would consider SMB, but to folks at 100-person shops, we'd be seen as really, really large.)

While we were rolling along, minding our own business, the great state of New York decided to enact a brand new Wage Theft Prevention Act, designed to protect workers from unethical employers who would promise them one wage at the time of hire, but then actually pay them a lower one come payday. Since most of the employees impacted by this shady practice were hourly, non-union, low-skilled or unskilled workers who didn't feel they had any power in the employment relationship, many were told they would simply be fired if they complained.

The WTPA aimed to stop this dirty deed by, among other things, requiring employers to create annual letters attesting to each employee's wage rate, having employer and employee acknowledge said wage statement, and requiring the notice to be in both English and the employee's primary language (as long as that language was Spanish, Chinese, Haitian Creole, Korean, Polish or Russian). All employers with staff in New York were required to comply within about nine months from the law's passing.

Long story short (apologies), despite our pretty sophisticated HRIT platform and level of internal IT capability, we had no way to easily comply with the Act's specific provisions. Our vendor and associated service providers (who were not in the compliance business like Equifax), were also struggling with determining and developing an automated solution to this problem. Consequently we spent what seemed like a dozen endless meetings and no telling how many email exchanges wrestling with this issue. I left the company before the Act's reporting deadline, so I don't even know how it was addressed in the end, but I do know this: Our organization spent probably tens if not hundreds of thousands of dollars of internal labor cost on this boring, mundane and incredibly unglamorous compliance issue. It (and other issues like it) absolutely prevented us from doing different, more interesting and higher-value business and workforce-management projects.

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Thinking back on that, I can't help but wonder why we didn't see the connection more clearly -- that our inability as an HR organization to easily adapt to new regulations, execute on basic transactions and remain compliant (however dull it all sounds) was probably the most significant barrier to our accomplishing really big things, developing into that trusted business partner we always said we wanted to be. It was the most significant barrier because it was the first one we'd always hit -- and, once we felt like we'd made it past, another one would drop down right in its place (New York is funny that way). It's easy to see now, with the advantage of hindsight, but it seems to me that no matter how smart we got, we'd never outsmart the regulators.

We should have left all of that nonsense (I mean important legal, compliance and regulatory work) to someone else, and it probably should have been what I pushed for early on in my role there. I should have known we'd never get the approval or have the organizational credibility to drive more sophisticated projects such as executive-team-succession planning, organization-wide talent reviews, or a social-media-recruiting campaign if we couldn't ensure that we could easily and smoothly handle whatever Albany could throw at us.

When can compliance truly be compelling?

When you are so good at it (or have a partner that is) that it never stands in the way of what you really want to do.

If I could go back and start that old job all over again, I'd spend my entire first six months automating everything compliance-related. Only then would I set about the work of becoming a true business partner because, only then, would it be possible.

Steve Boese is a co-chair of HRE's HR Technology® Conference, and a technology editor for LRP Publications. He also writes an HR blog and hosts the HR Happy Hour Show, a radio program and podcast. He can be emailed at sboese@lrp.com.

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