Day 21 of One Month to Better Compliance Through HR

How can you determine if Human Resources (HR) can meet the needs of a best practices compliance program? One place to start is with a gap analysis to determine what HR has in place that can facilitate your company’s compliance program. According to Bright Hub Project Management, a gap analysis “compares actual performance (or status) with the desired performance (or status). A gap analysis takes into account where the company is and where it wants to be. Any review of a company and its goals should include a thorough gap analysis - especially when wanting to improve productivity, processes and products.” From the HR and compliance perspective the four steps to undertaking a gap analysis are: (1) understanding the compliance and HR environment in your organization; (2) taking a holistic approach to understanding the compliance and HR environment; (3) determining a framework for analysis, and (4) compiling supportive data to test the program. Yet before beginning this exercise it is incumbent to understand that the first element of an effective compliance program under the U.S. Sentencing Guidelines is to have Established Policies and Procedures to protect and detect non-compliance with regulations. While the US Sentencing Guidelines specifically target “criminal conduct”, companies would be wise not to limit their “risk assessment” or “gap analysis” to only criminal conduct. Most, if not all, companies possess several corporate policies that govern employee behaviors. The person in charge of corporate compliance function should first identify the policies in place by utilizing a gap analysis to catalog the existence of corporate policies across the company, noting policy gaps and inconsistent application of policies across various locations. The business units and functional disciplines should be tasked with filling the gaps and standardizing conflicting polices. This exercise allows you to move forward to what is required to operationalize compliance as you have to know what you must be compliant with going forward. So how does one work with the business units and the functional disciplines to structure the identification of legal and compliance risks in a way that can be managed and utilized with some degree of ease? Here are a few questions that a compliance practitioner may pose to the HR department to perform a gap analysis regarding policies and procedures: Does the HR department have an inventory of policies, procedures, laws and regulations covering employees and employment related matters applicable to the company’s business? If yes, do you have a specified person who is in charge of updating the inventory? If no, what system does the HR department utilize to ensure that it is aware of the various compliance laws and regulations and has a process to comply with them? What evidence would the HR department be able to produce to the government to support a finding that the company has a solid compliance program for applicable labor and employment laws and regulations? What types of compliance training are mandatory for all employees, which are optional and how does HR track and document completion? How is the training performed? Is it provided in the native language of the employee or only in English? What types of enforcement actions predominate in the compliance arena for your industry or where your organization does business? How is such data tracked in your company? Are employees within the HR department specifically trained to understand compliance requirements applicable to your organization? Does the HR department provide senior management with periodic updates on the monitoring of results, key risks, and compliance violations within HR? Has the HR department established some type of escalation criteria to ensure that high-risk compliance issues are reviewed at the corporate level? Does the HR department have compliance monitoring standards in place? Does the HR department perform periodic audits to ensure that the policies and procedures are being complied with? These are only a few of the questions that you may want to ask to begin the process of assessing how compliance and the role of HR apply to your company. My final suggestion is to work with HR to create a consolidated Human Resources Compliance Audit Checklist that can be used to audit (and document) the company’s HR Compliance Program. The key to compliance, in my opinion, is having the proper structure to identify the issues, implement policies and procedures to address the issues, audit for compliance and document, document, and document. Three Key Takeaways A gap analysis is a key component in the risk assessment process. The ultimate responsibility should lie with the business units and functional discipline to fully operationalize compliance. The role of the compliance department is to oversee, provide subject matter expertise and coordinate. This month’s series is sponsored by Advanced Compliance Solutions and its new service offering the “Compliance Alliance” which is a three-step program that will provide you and your team a background into compliance and the FCPA so you can consider how your product or service fits into the needs of a compliance officer. It includes a FCPA and compliance boot camp, sponsorship of a one-month podcast series, and in-person training. Each section builds on the other and provides your customer service and sales teams with the knowledge they need to have intelligent conversations with compliance officers and decision makers. When the program is complete, your teams will be armed with the knowledge they need to sell and service every new client. Interested parties should contact Tom Fox. Learn more about your ad choices. Visit megaphone.fm/adchoices