[September 05, 2017] |
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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
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A costly line-item in every budget: Keeping up with regulatory
change is a necessary, yet expensive, responsibility.
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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.
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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.
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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.
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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.
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Death, taxes, and regulatory change: Half of businesses say they
aren't given enough time to get ready for new workplace rules.
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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.
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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.
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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.
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How many businesses are fully compliant? Complexity, constant
change, and time-to-comply all factors that put most businesses - and
their employees - at risk.
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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.
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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.
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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.
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Waiting for a lifeline: HR and payroll pros need more support to
identify and implement critical compliance changes.
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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).
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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.
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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
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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."
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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."
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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."
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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 [email protected].
© 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.
View source version on businesswire.com: http://www.businesswire.com/news/home/20170905005816/en/
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