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The $100,000 Bill: Workforce Institute at Kronos Survey Pinpoints Cost of a New Labor Regulation
[September 05, 2017]

The $100,000 Bill: Workforce Institute at Kronos Survey Pinpoints Cost of a New Labor Regulation


As the U.S. Senate and U.S. House of Representatives return to session today, a new survey from The Workforce Institute at Kronos Incorporated and Future Workplace reveals it can cost organizations as much as $100,000 each time a federal, state, or even local labor-related regulation is created or changed.

"The $100,000 Bill" report is based on a national survey of 812 human resources (HR) and payroll professionals in management, senior leadership, and the C-suite, and examines how the process of turning compliance-focused legislation into actionable internal policy impacts the workforce, HR and payroll professionals, and what can be done to improve this challenging process.

News Facts

  • A costly line-item in every budget: Keeping up with regulatory change is a necessary, yet expensive, responsibility.
    • More than half of HR and payroll professionals (54 percent) surveyed say that, on average, it costs their organization $40,000 to $100,000 to prepare for each labor-related regulatory change.
      • This cost covers a wide range of activities that varies by organization, including, but not limited to, consulting with legal counsel to create new internal policies; training for HR and payroll employees; educating leaders and managers on the change; wide-ranging employee communications to ensure everyone understands the change, etc.
    • The cost of compliance keeps going up, too. More than two-thirds (68 percent) of those surveyed say compliance has become more expensive in just the last year, while three-quarters (74 percent) say it's more expensive than 2007, just a decade ago.
    • While larger organizations are more sophisticated at tracking expenses related to maintaining compliance, one out of every five organizations with fewer than 500 employees (20 percent) surveyed aren't sure how much the activity of remaining compliant costs annually.
  • Death, taxes, and regulatory change: Half of businesses say they aren't given enough time to get ready for new workplace rules.
    • Regulatory changes can become law in as little as 60 to 90 days, but half (53 percent) of survey respondents say more time is needed to create and communicate new internal policy to employees.
    • More than a third of HR and payroll pros (40 percent) say 120 to 150 days is the preferred amount of prep time to get ready for recently passed legislation.
    • Smaller organizations may need even longer. Nearly a quarter (24 percent) of businesses with fewer than 500 employees say they require a minimum of 150 days to get ready for regulatory changes to become law.
  • How many businesses are fully compliant? Complexity, constant change, and time-to-comply all factors that put most businesses - and their employees - at risk.
    • With too much work and not enough help, nearly two-thirds (58 percent) of respondents reported that they've witnessed colleagues within their organization occasionally cut compliance-related corners.
    • A possible reason for this trend? In addition to an unsustainable pace of change, one out of every two respondents (56 percent) said their HR/payroll systems are outdated, making compliance a challenge despite their best efforts.
    • There's little relief on the horizon, either. Two out of every three respondents (64 percent) say they expect compliance to become even more complex under the current presidential administration.
  • Waiting for a lifeline: HR and payroll pros need more support to identify and implement critical compliance changes.
    • There's no one-stop resource to keep up with regulatory changes. Well over half of respondents (59 percent) say they rely on their HR/payroll software vendor/provider to learn about changes, while many also depend on updates from national industry associations (39 percent), their internal legal counsel (37 percent), regional industry associations (35 percent), and legal publications (34 percent).
    • Virtually everyone surveyed (85 percent) says compliance is a guiding principal in their organization's HR and payroll operations, but just a quarter (27 percent) say it is discussed daily. Just under half (46 percent) of respondents say it's a weekly conversation, while one-fifth (20 percent) say it's only addressed monthly.
    • Organizations do recognize the value in training employees to better handle compliance. Nearly two-thirds (61 percent) of the respondents say their boss makes it simpler to obtain training, educational opportunities, and industry certifications to simplify compliance administration.

Suporting Quotes

  • Joyce Maroney, director, The Workforce Institute at Kronos (News - Alert)
    "The regulatory landscape is constantly evolving, and the frequency at which compliance-related regulations are added or changed continues to accelerate. Keeping up with this growing volume of change is exceptionally difficult, and HR and payroll professionals with too few resources and too many responsibilities need more help to make sure their organizations are maintaining compliance and building an engaged workforce. Organizations should take a step back to review how they approach tracking, implementing, and communicating compliance-related changes and attempt to identify areas of improvement in their processes so that HR and payroll professionals can spend more time focused on strategies that will improve employee engagement and deliver a more positive employee experience."
  • Malysa O'Connor, senior director, SMB market development, Kronos
    "As the survey demonstrates, HR and payroll professionals at organizations of all sizes want to ensure compliance to the fullest of their abilities, but often struggle because of the constant and rapid nature of the changes. Those at small businesses, mid-market organizations, and even small enterprises must also deal with the added challenge of balancing multiple responsibilities and using manual or legacy solutions not intended to handle such detailed requirements. Equipping these professionals with modern technology and updated processes will simplify daily compliance duties so that they can focus on attracting, retaining, and developing the most engaged workforce possible."
  • Dan Schawbel, partner and research director, Future Workplace; New York Times best-selling author, Promote Yourself
    "The cost of new labor regulations keeps increasing and it's becoming harder for companies to get ready for new workplace rules. Businesses are having trouble keeping up with all the new regulations and feel that we are now at an unsustainable pace of change. As the government becomes more regulated, the costs to businesses will increase and the workforce will suffer as a result."
  • Lisa Rowan, research vice president, HR, Talent, and Learning Strategies, IDC (News - Alert)
    "Before organizations can focus on building an engaged workforce, they must first ensure that they're doing right by their employees by staying up to date and compliant with all regulatory changes within the jurisdictions that they operate. A cloud solution, such as a human capital management platform that unifies HR, workforce management, and payroll in a single database, is a powerful tool to not only mitigate compliance risk but ease the burden felt by individual employees in HR and payroll."

Supporting Resources

About Kronos Incorporated
Kronos is a leading provider of workforce management and human capital management cloud solutions. Kronos industry-centric workforce applications are purpose-built for businesses, healthcare providers, educational institutions, and government agencies of all sizes. Tens of thousands of organizations - including half of the Fortune 1000® - and more than 40 million people in over 100 countries use Kronos every day. Visit https://www.kronos.com. Kronos: Workforce Innovation That Works.


About Future Workplace
Future Workplace is an executive development firm dedicated to rethinking and re-imagining the workplace. Future Workplace works with heads of talent management, human resources, corporate learning, and diversity to prepare for the changes impacting recruitment, employee development, and engagement. Future Workplace is host to the 2020 Workplace Network, an Executive Council that includes 50 plus heads of Corporate Learning, Talent, and Human Resources who come together to discuss debate and share "next" practices impacting the workplace and workforce of the future. For more information, please visit: www.FutureWorkplace.com.

Survey Methodology
"The $100,000 Bill" survey findings are based on a survey conducted by Morar Consulting fielded across the U.S. between July 10-14, 2017. For this survey, 812 HR and payroll leaders were asked about their views regarding regulatory compliance. The study targeted leaders with HR and payroll responsibilities who work across different sectors and in organizations of different sizes. Respondents are recruited through a number of different mechanisms, via different sources to join the panels and participate in market research surveys. All panelists passed a double opt-in process and completed on average 300 profiling data points prior to taking part in surveys. Respondents were invited to take part via email and were provided with a small monetary incentive by Morar Consulting for doing so. Results of any sample are subject to sampling variation. The magnitude of the variation is measurable and is affected by the number of interviews and the level of the percentages expressing the results. In this particular study, the chances are 95 in 100 that a survey result does not vary, plus or minus, by more than three percentage points from the result that would be obtained if interviews had been conducted with all persons in the universe represented by the sample. For more details, please contact Dan Gouthro at daniel.gouthro@kronos.com.

© 2017 Kronos Incorporated. All rights reserved. Kronos and the Kronos logo are registered trademarks and Workforce Innovation That Works is a trademark of Kronos Incorporated or a related company. See a complete list of Kronos trademarks. All other trademarks, if any, are property of their respective owners.


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