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Compliance can be a difficult thing to manage, especially for startups and smaller companies, and others where it is difficult to convince others that it is a necessity. When your compliance needs are left unattended to, the company loses its good reputation and could also invite fines and penalties from the government. This is the importance of compliance management.
Compliance management can help solve these problems and with compliance management tools you can further automate and streamline the process. In this article, we will be looking at what we mean by compliance management, the importance of compliance management, and the tools we use in compliance management.
What is Compliance Management?
Compliance management is the process of ensuring that an organization’s processes, policies and procedures meet the relevant rules and regulations. A compliance management process, tools, and a dedicated team is mandatory to ensure that the compliance requirements set by center, state and other regulatory bodies are being met by organizations.
What Is the Importance of Compliance Management?
Compliance management is important because it helps companies avoid damage to reputation, fines and legal charges. Ensuring compliance has several advantages. Let’s discuss these in more detail now.
1. No Fines or Legal Charges
When a company is compliant with the laws set by the Government, it does not need to pay any hefty fines or legal charges. This means that the company can save a lot of money not just on legal fees but can ensure that its image is not tarnished by the legal charges brought against it in a court of law.
2. Improvement in Company’s Reputation
The company’s reputation remains intact, and over time, could even improve as it stays committed to employee welfare and happiness, in line with statutory requirements. A good word of mouth will ensure that the reputation of the company improves over time and the company is able to establish a good relationship not only with its employees but with customers too.
3. Company Is Eligible for Benefits
The Government of India, like most developing nations of the world, offers incentives to companies who want to venture into certain industries it is looking to develop and gain India a good reputation. For this reason, too, companies need to be compliant because if they are not, they may not be considered eligible and could miss out on these incentives.
4. Company Has Loyal Employees and Customers
As mentioned earlier, having a better brand reputation (because of being compliant) creates a work environment too where employees are satisfied as work hours are apt and salaries are paid on time. They have peace of mind and better composure and talk to customers in a better way, forging great relationships and bringing in much needed revenue for your company.
5. Wins the Trust of Investors and Stakeholders
Investors and stakeholders are more convinced of the goodwill and believe that the trust and the confidence they had in the company is paying off, not just in terms of reputation but also as increased revenue for all the above reasons. They can also justify the stance they have on various issues and can quote the company as doing a great job, thanks to the good name the company has earned. This is an important point to remember when looking at the importance of compliance management.
What are the Four Types of Compliance?
1. Statutory compliance
The compliance requirements put forth by the state and central governments is called statutory compliance.
2. Regulatory compliance
The requirements for compliance imposed by regulatory bodies are called regulatory compliance.
3. Corporate compliance
The set of policies within a company to meet its internal requirements is called corporate compliance.
4. Union law compliance
The set of rules and regulations put forth by Unions is called union law compliance, and generally every occupation has its own unions.
What is the Process of Compliance Management?
Any compliance management solution consists of three main steps, often referred to as the Triad. They are:
1. Prevent
In this phase, the compliance managers try to prevent any non-compliance from happening, be they based on statutory, regulatory or corporate laws.
2. Detect
In this stage, the compliance officers, committee and the management together work towards identifying the non-compliance in the organization.
3. Respond
In this stage, following the detection of non-compliance, responses are initiated for issues of non-compliance.
What Are the Compliance Management Tools You Can Use?
Compliance management tools are a great help when it comes to managing statutory compliance, especially with the regular updates and the differences across states in India. We found five tools we think would be great for compliance management and some of which even offer support for advanced data security. When picking a compliance management tool, always look at the compliance needs and the volume, the budget you have on hand, and the scale at which you would be growing.
1. WiseMonk
The tool offers the following compliance management help. It helps with the understanding of labor laws and statutory compliance and has tools to perform a compliance audit and manage risk.
2. GreytHR
GreytHR provides statutory compliance support, enables automated tax calculation, has inbuilt document management for compliance, support for audit trails, and regular updates.
3. Zoho People
Apart from being a full-fledged HRMS with support for employee self-service and support for payroll, it also enables statutory compliance management and audit trails and has regular updates.
4. sumHR
Apart from payroll automation and employee leave management etc. sumHR also has support for compliance management and audit trails, and it has user access controls as well.
5. Darwinbox
Apart from managing the leaves, attendance and the payroll and even a learning management system, Darwinbox is no slouch when it comes to compliance management either, with support for statutory compliance management, document management, audit trails and several controls for data security.
Are You Looking for a Compliance Management Partner?
Alp Consulting has been managing statutory compliance now for over a decade. With rich experience already in talent management and acquisition, Alp can not only manage your compliance needs directly but also hire people who can help with your compliance needs and who will be well-versed in compliance management tools. We have a solution for every compliance problem you may have, no matter how big or small. Talk to us today.
FAQs
1. What is compliance management?
Compliance management is the process of monitoring and assessing processes in HR to ensure that they meet regulatory and statutory norms. Companies also may require processes to comply with their internal policies.
2. What does a compliance manager do?
A compliance manager is responsible for managing the work of compliance specialists and risk analysts and associates and ensuring that they are fulfilling their responsibilities. They not only need excellent management skills but attention to detail as well.
3. What are the 7 pillars of compliance?
The 7 pillars of compliance are written policies and procedures outlining compliance, governance and oversight with a senior compliance officer, training employees and managers on compliance, open lines for communication, prompt response to any detected problems, internal auditing, and disciplinary guidelines.
4. What is the difference between Compliance management vs risk management: What is the difference?
Where compliance management focuses on ensuring that an organization adheres to the laws and standards that are maintained by the Government, risk management monitors, identifies and reduces threats to the assets and the future of the company.
5. Why should you outsource labor law compliance?
Labor law compliance is not easy to manage. With the right tools and knowledge on how to use them, you can get an advantage in compliance management. When you outsource labor law compliance management to a third party, you can expect perfection.
