Risky Business: Majority of HR and Payroll Professionals Witness Questionable Compliance Practices

Survey by The Workforce Institute at Kronos Incorporated Finds Overburdened Departments Cut Corners to Get the Job Done

LOWELL, Mass.--(BUSINESS WIRE)--A survey from The Workforce Institute at Kronos Incorporated finds that more than half of human resources (HR) and payroll professionals (55 percent) have witnessed compliance activities by their colleagues that created unnecessary risk.

The Risky Business Survey is a survey of 812 HR and payroll professionals in the U.S. conducted in partnership with Future Workplace. The survey examines how a lack of time and resources creates a perpetual struggle with compliance that organizations of all sizes face every day.

News Facts

• Under pressure: Organizations of all sizes create unnecessary risk to get the job done efficiently
  • According to the survey, 66 percent of payroll professionals and 51 percent of HR practitioners say their organization occasionally cuts corners that may jeopardize compliance, including more than two-thirds (69 percent) of all respondents whose systems are more than five years old.
  • More employees create more challenges: large organizations (2,500-9,999 employees) are the biggest offenders, as more than two-thirds (68 percent) of respondents say they have seen colleagues cut corners when it comes to compliance.
  • No one is immune to temptation: 58 percent of organizations with 1,000-2,499 employees, 56 percent of organizations with 500-999 employees, and half of organizations with fewer than 500 employees all report taking shortcuts that may jeopardize compliance.
• Too much work, too little time: HR and payroll departments could use an extra set of hands to manage compliance
  • The survey finds that, on average, HR and payroll departments spend approximately 36 hours per week on compliance-related activities ranging from tracking regulatory proposals to creating and communicating new policies – enough work for a dedicated full-time employee!
  • Organizations with fewer than 500 employees average 23 hours per week on compliance duties, while those with 500-999 employees average 31 hours per week. It increases to 36 hours per week for organizations with 1,000-2,499 employees.
  • There is a direct link between technology investment and time spent on compliance: organizations utilizing newer solutions spend nearly ten fewer hours per week on compliance (34 hours per week with a solution 1-5 years old versus 43 hours per week with solutions 5+ years old.)
• Critically important, constantly time-consuming: Compliance is a necessity that costs both time and money
  • With a single major regulatory change often costing businesses between $40,000 and $100,000, HR and payroll professionals have a long list of priorities they would tackle if they could spend less time and money on compliance, including:
    • Improving overall payroll efficiency (22 percent);
    • Increasing manager effectiveness (13 percent);
    • More employee/internal communications (11 percent);
    • Organizational strategy (10 percent); and
    • Better performance management (nine percent).
  • Nearly half (47 percent) of survey respondents say maintaining multiple, duplicate employee records leads to increased compliance risk. The survey found organizations maintain an average of five separate records per employee and dedicate 32 hours per week on manual, duplicate data entry.
  • About three-quarters of survey participants (74 percent) agree that cloud solutions are best suited to support today’s continually changing compliance landscape.

Supporting Quotes

• Joyce Maroney, executive director, The Workforce Institute at Kronos
  “HR and payroll professionals are among the most thoughtful, passionate, and meticulous professionals within any organization. They don’t cut corners because they’re careless: usually it’s because they’re overburdened, understaffed, or lack the proper resources required to handle anything above and beyond the day-to-day activities required to run the department. Organizations that ensure their HR and payroll teams have access to modern solutions will be able to strike a better balance between time-consuming compliance requirements and the strategic activities needed to build a highly engaged workforce.”

• Malysa O’Connor, senior director, HR and payroll practice group, Kronos
  “Many HR practitioners and payroll professionals feel like regulations are changing at the speed of light. They’re working hard to keep pace but the technology that they’re surrounded with is often outdated or doesn’t provide the agility and efficiency needed to adapt to changing laws. HR, payroll, and timekeeping in a single cloud solution will simplify the time and resources required to keep up with regulatory change while also ensuring that company policies are applied fairly and consistently across the entire workforce.”

• Dan Schawbel, partner and research director, Future Workplace; New York Times best-selling author, Promote Yourself
  “New policy changes can be a significant burden for companies of all sizes. They can create stress, consume productivity and force HR to take shortcuts that end up costing organizations even more money in the future.”

Supporting Resources

• Note to editors: Please refer to this research as “The Risky Business survey” by The Workforce Institute at Kronos Incorporated and Future Workplace.
• Learn more about mitigating HR and payroll risk with Kronos.
• Download the compliance eBook, “Real Risks, Sensible Solutions.”
• Connect with Kronos via Facebook, Twitter, LinkedIn, Instagram, and YouTube.

About The Workforce Institute at Kronos
The Workforce Institute at Kronos provides research and education on critical workplace issues facing organizations around the globe. By bringing together thought leaders, The Workforce Institute at Kronos is uniquely positioned to empower organizations with the knowledge and information they need to manage their workforce effectively and provide a voice for employees on important workplace issues. A hallmark of The Workforce Institute’s research is balancing the needs and desires of diverse employee populations with the needs of organizations. For additional information, visit www.workforceinstitute.org.

About Kronos Incorporated
Kronos is a leading provider of workforce management and human capital management cloud solutions. Kronos industry-centric workforce applications are purpose-built for businesses, healthcare providers, educational institutions, and government agencies of all sizes. Tens of thousands of organizations — including half of the Fortune 1000^® — and more than 40 million people in over 100 countries use Kronos every day. Visit www.kronos.com. Kronos: Workforce Innovation That Works.

About Future Workplace
Future Workplace is an executive development firm dedicated to rethinking and re-imagining the workplace. Future Workplace works with heads of talent management, human resources, corporate learning, and diversity to prepare for the changes impacting recruitment, employee development, and engagement. Future Workplace is host to the 2020 Workplace Network, an Executive Council that includes 50 plus heads of Corporate Learning, Talent, and Human Resources who come together to discuss debate and share “next” practices impacting the workplace and workforce of the future. For more information, please visit: www.FutureWorkplace.com.

Survey Methodology
The “Risky Business” survey findings are based on a survey conducted by Morar Consulting fielded across the U.S. between July 10-14, 2017. For this survey, 812 HR and payroll leaders were asked about their views regarding regulatory compliance. The study targeted leaders with HR and payroll responsibilities who work across different sectors and in organizations of different sizes. Respondents are recruited through a number of mechanisms, via different sources to join the panels and participate in market research surveys. All panelists passed a double opt-in process and completed on average 300 profiling data points prior to taking part in surveys. Respondents were invited to take part via email and were provided with a small monetary incentive by Morar Consulting for doing so. Results of any sample are subject to sampling variation. The magnitude of the variation is measurable and is affected by the number of interviews and the level of the percentages expressing the results. In this particular study, the chances are 95 in 100 that a survey result does not vary, plus or minus, by more than three percentage points from the result that would be obtained if interviews had been conducted with all persons in the universe represented by the sample. For more details, contact [e-mail].

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