By Brian Kreissl
Increasingly, many senior executives feel HR is too focused on compliance. This is supported by some recent surveys, including this one conducted last year by the Human Resources Professionals Association (HRPA) and Knightsbridge Human Capital Solutions.
While that survey, The Role and Future of HR: The CEO’s Perspective, was quite positive overall, it noted there is room for improvement in some areas. According to the survey, “CEOs question HR’s value when it focuses too much on legislation or process.”
The survey also mentions that, “(CEOs) want to see senior HR executives apply their expertise to determine the impact to the business of changing legislation and help business leaders manage the change, rather than focusing on the punitive side of non-compliance.”
While this is understandable to some extent, in many ways the HR profession is perhaps not focused enough on legal compliance. Because of that, the way the compliance message is being delivered in many organizations isn’t effective.
HR needs to be more than just an organization’s compliance watchdog. It’s also important not to forget the equally important “softer” and more strategic aspects of HR. But that may not be the root cause of the problem.
The link between strategy and compliance
In our disdain for anything labeled as “transactional,” we may be doing ourselves a disservice when it comes to compliance. Although some HR practitioners argue legal compliance isn’t a strategic concern, I respectfully disagree.
Knowledge of the legal and regulatory environment is necessary to conduct an effective SWOT analysis (strengths, weaknesses, opportunities and threats) for strategic planning purposes. And the ability to assess and manage legal and financial risks from employment-related litigation should be part of any organization’s overall risk management strategy in the face of an ever changing legal and regulatory landscape.
Answering simple legal compliance questions
Having a solid grasp of the law includes realizing when you’ve met your match and it’s time to call an employment lawyer. However, this doesn’t mean HR should have an employment lawyer on speed dial to answer even the simplest legal questions.
While I have tremendous respect for employment lawyers, legal advice usually doesn’t come cheap. Therefore, a savvy HR practitioner should be able to save on legal fees by answering simple legal questions without the assistance of a lawyer.
Expanded legal knowledge needed by HR
Somewhat paradoxically, some HR professionals are perceived to be too focused on legal compliance precisely because they don’t know enough about the law. This is because that lack of knowledge can lead to worrying too much about trivial legal risks.
For example, many HR practitioners are absolutely paranoid about providing references for departing employees. Yet, if they actually knew more about the law, they would realize, depending on the circumstances, there’s probably more legal risk in not providing a reference.
It’s also worth mentioning employees can always commence legal action against their employer for just about any reason. But whether an employee is likely to be successful in that litigation is another matter.
As Professor David Doorey of York University in Toronto recently commented on his blog, it’s really quite surprising the Certified Human Resources Professional Designation (CHRP) doesn’t have a mandatory employment law course as part of the curriculum. And while many HR programs have an employment law course as an elective, few make such courses mandatory.
Another aspect of this stereotype requiring some examination is the way the compliance message is delivered in organizations. Simply hand-wringing and talking about potential fines and litigation isn’t going to help senior business leaders.
While CEOs and other executives need to know the potential outcomes of legal risks, it’s more important to be able to be proactive and create strategies and training programs designed to mitigate that risk.
Another part of HR’s supposed over-emphasis on compliance relates to compliance with the organization’s own internal HR policies and procedures. By taking a bureaucratic, one-size-fits-all approach to HR governance and insisting on rigid compliance with organizational rules and norms, HR can do itself a disservice.
Of course, some senior executives seem to want to “shoot the compliance messenger” by blaming HR for the ever-increasing regulation of the employment relationship. The best way to combat this is by shifting away from “the sky is falling” mentality, being proactive and ensuring you know what you’re talking about when discussing legal risks.
Brian Kreissl is the managing editor of Consult Carswell. He can be reached at brian.kreissl@thomsonreuters.com. For more information, visit www.consultcarswell.com.