Businesses have much more to worry about than just overhead and sales these days, according to the “’The $100,000 Bill” survey by The Workforce Institute at Kronos. With over half of surveyed business owners spending between $40,000 to $100,000 just to prepare for new business regulations, it seems that each new law or mandate has the potential to cut into profits. Of those business who track the costs (many do not), these expenses include such activities as hiring legal consultation, the creation of new HR and workplace policy, training, and education.
Protect your identity with $1 million in identity theft insurance, plus Lost Wallet Replacement & Identity Restoration. Learn More.
Costs Continue to Rise
Every hour spent transitioning is also an hour spent not creating, producing, or selling the very product or service the business exists to provide. Sentiment regarding the future of business regulations is mixed, but many businesses feel that it is headed in the wrong direction. The survey revealed that more than 68 percent regard compliance as more expensive in just the last year. An even larger group (74 percent) claims it is more expensive than a decade ago.
Can Companies Keep Up?
In addition to the dollars and cents behind the always-changing regulatory landscape, there is a requirement to stay vigilant and informed. With no central source of information for companies to consult, it’s up to them to seek out the newest regulations and requirements. Many businesses report that they rely on their human resources or payroll software vendor to keep them updated, while others hear about them from national or regional associations, legal publications, or their own legal staff.
“The hard-charging, get-everything-done attitude that so many small business owners embrace often leads to less staff than may be necessary,” says Caton Hanson, co-founder and Chief Legal Officer of Nav. “At Nav, for example, we held off on hiring additional legal staff for cost reasons. This meant taking longer to implement required compliance checks, and sometimes makes implementing new requirements nearly impossible in the time frame required.”
Once a business does learn of a new requirement, the window for making change is brief. While it can take just 60 to 90 days for law to go from legislative draft to signing, 53 percent of businesses surveyed state that it takes them much longer to put the rules into practice. Larger businesses with a more sophisticated HR and training system prefer 120 – 150 days for making changes, and companies with fewer than 500 workers report a minimum of 150 days is needed for complete compliance to occur. This timeframe must accommodate the creation of new workplace policy, as well as implementation.
Creating a Culture of Compliance
Does that mean that regulations will be the bulk of water cooler chatter among businesses in the coming years? Probably not. While most of the professionals surveyed recognized compliance as foundational to their job, fewer than 27 percent of them admit it is talked about on a daily basis. In fact, 46 percent hear about it weekly, and 20 percent say it comes up just every month.
It’s not all bad news, however. Of the 812 human resources payroll professionals in management, senior leadership, and the C-suite surveyed, 62 percent were pleased with their boss’s role in supporting their goals. When it comes to getting the training, education, and industry certification needed to stay on top of regulations, this same group acknowledged their company was making it easier for them.