As government bodies update laws and regulations, businesses and organisations across many sectors in the UK are constantly affected. These changing laws and regulations change to respond to emerging threats and new demands in society, and businesses have to respond promptly. It is not only about modifying some procedures; such changes will often be accompanied by the complete restructuring of most of the compliance departments which would have serious employment ramifications.
What is Regulatory Compliance?
Regulatory compliance can be defined as the act of conforming, acquiescing or yielding to a set of rules or demands primarily established by external bodies regulating a favourable business environment. UK businesses must ensure that internal policies are aligned with the government’s regulations.
What Are The Consequences of Regulatory Compliance?
Companies that do not ensure that their internal policies are up-to-date may face consequences for non-compliance, including but not limited to fines, lawsuits, and damage to public image. Despite these penalty-related constraints, there are also employment implications in compliance and those in hiring for compliance.
Increased Demand for Compliance Professionals
Regulation changes and additions are often accompanied by more complicated text and therefore the need for well-versed individuals who will be able to make sense of such rules and even apply them becomes prevalent. This demand sees a rise in employment opportunities in compliance including compliance officers, compliance audit professionals, compliance analysts, and compliance legal advisors.
Inefficient Operational Procedures
It is often necessary to incur additional costs to ensure compliance with the new laws and policies, for example taking on new employees or buying particular equipment to supervise the compliance measures. This can result in increased operational costs which in turn risks a company’s profitability.
Training and Development
Many of these defined norms will require the already existing employees to undergo considerable training in line with the changes. This can result in periodic distortions in employment relations, concentrating on upskilling existing personnel instead of seeking external hires.
Job Security and Turnover
As mentioned above, there may be a growing need for these skilled compliance specialists, the pressures and duties that come with this responsibility can sometimes cause turnover rates to be very high. Every compliance officer must ensure that new skills are obtained with the changing market. Furthermore, since this field is evolving, it may result in job insecurity.
How to Improve Regulatory Compliance?
Regulatory compliance can also be regarded as a legality that every business organisation must follow as businesses need to go through the difficulties posed by law.
Here are some ways to do that:
Availability of Well Defined Compliance Policies Within the Organisation
Put simply, the first step to be taken to ensure that there is full compliance with the regulations is strengthening the compliance policies; it is impossible to report on something that has never been defined. This should include outlining the process of undertaking compliance, allocating duties among staff, and giving an outline of how compliance will be managed in the event of regulatory change.
Invest in Training and Education
Continuous training is the cornerstone of every business in making sure that their workers are familiar with the up-to-date laws. Employer’s initiative should provide such training as often as possible and provision of helpful materials as per the compliance obligations.
Use Compliance Technology
The impact of compliance on the operational aspects can be enhanced through the use of technology. There is software such as compliance management software, which has the capability of computerising and streamlining the processes of monitoring, reporting and auditing which reduces human input of the compliance team and therefore higher risk of human error.
Regularly Review and Update Compliance Procedures
Regulatory frameworks are usually dynamic; therefore, even at the compliance procedural levels, it is recommended that there be regular updates and revisions of the compliance procedure document on changes in regulatory practices as outlined by the UK government.
Employment Laws That Changed in 2024
It is evident that there are sweeping changes made in employment laws, this year, and a number of these could directly impact compliance as well. Some of the key changes include:
Extended Paid Leave Policies
Changes in laws have included the jurisdictions for paid leaves and these include sick leaves and parental leaves were added to the previous compliance requirements of companies.
Enhanced Worker Protections
Amendments to protect workers legislation have given out more of more strict measures for maintaining workplace safety against harassment and discrimination.
Flexible Working Rights
It is now a stipulated requirement that more flexible arrangements to work are put in place, something that has changed how businesses adjust their compliance policies on working times, remote working, and employee surveillance.
Minimum Wage Adjustments
The amplified national minimum wage increases also have repercussions on the companies’ payroll compliance that is every employee must be compensated for in the right manner under the new rates.