A new survey out by the Workforce Institute at Kronos finds the cost of legislative compliance for employers could reach up to six figures per rule.
The survey, conducted with Future Workplace, included input from 812 HR and payroll leaders on their views regarding regulatory compliance:
What we heard back is that it can cost organizations as much as $100,000 each time a federal, state, or even local labor-related regulation is created or changed.
Here are the key findings from this research:
- 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.
The survey also found that HR needs 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.
You can view the full results of the survey here.