As businesses look to expand to other states or countries, finance leaders should stay up-to-date on compensation compliance. This type of compliance can include payments of social benefits, annual leave pay and minimum wage.
It's About More Than Avoiding Penalties
If you're doing things right, which means reporting in a timely and accurate fashion and staying off the radar screen of regulators, you're doing more than just following good compliance practices — you're gaining competitive advantage against rivals who aren't doing these things, and thus putting their organizational futures at risk. Identifying and following best practices can spell the difference between knowing you're doing compliance right and waiting for that unwanted communication from a regulator saying you're being audited, investigated or worse.
Compliance in Different Arenas
The compliance risk you face depends on your industry and the intricacies of the regulatory framework of the jurisdictions where you do business. You might be in compliance with labor and compensation laws in New Jersey, but the challenges in California are different. When you bring compliance into the global arena, the complexities only increase with unfamiliar languages, cultures and foreign governments.
Global engineering firm Celestica, for instance, employed a global HR and payroll platform to drive business growth and manage compliance everywhere it operates, including Monterrey, Mexico, Hong Kong, Portland, Oregon and Ireland, according to a case study from ADP. The firm has some 25,000 employees all around the globe.
Celestica's Vice President of Global Talent explained that the firm "implemented seventeen countries in forty months," and "having a common global platform for HR and payroll" made that process much smoother. She went on to say that it also "simplified our ability to onboard large volumes of people through acquisitions." The efficiency of having a single global platform drove recruitment efficiency, simplified payroll and provided compliance peace of mind, all while the organization scaled quickly to accommodate their rapid global expansion.
Tips for Compensation Compliance
The scale of your firm's operations can add complexity, but so can geographical expansion. Here are tips to help you get compliance right no matter where you operate.
1. Keep track of rules
Compliance is nothing if not dynamic, and staying on top of regulatory rules and potential changes must be paramount. Accessing local expertise can be a good option if you want to get ahead of the curve and stay there.
2. Have a core system
With the amount of data flowing back and forth in your business, you have to be able to rely on a system that keeps track of it all. You should consider a core compensation compliance system that holds all your data but still has the capability to localize your systems. If you have data siloes, know they will more than likely complicate compliance.
3. Take an agile approach
You should encourage your information technology (IT) team to utilize an infrastructure that enables agility.
4. Get help when needed
If you have gaps or recognize your compliance efforts aren't scalable, being proactive to get ahead of these deficiencies can save you money in the long run.
Keeping track of compensation compliance is critical as your business grows and expands globally. Putting an emphasis on employing HR systems that promote agility between various compliance needs should not only help you remain compliant, but give your business the tools it needs to continue to grow.
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