Should HR be regulated?

HR departments play a vital role in keeping businesses working within the law. But who regulates HR? Roger Moore, general manager at software company Bond Teamspirit, argues that HR needs either a solid, regulatory body to ensure its compliance or to get better at regulating itself.

HR departments throughout various industries play an important role in keeping businesses on track in meeting regulatory bodies’ requirements. Through ensuring compliance to industry-specific guidelines, keeping the paper trail updated and even guaranteeing adherence to necessary legislation, HR helps businesses avoid the penalties and fines that can easily damage, or even destroy, organisations.

But what about the HR department itself? There are various organisations that the HR team can go to for advice and guidance – most notably the Chartered Institute of Personnel and Development and Acas – but who or what can businesses turn to that can actively regulate the HR department? Other than government legislation, to whom or what is the HR department accountable on a day-to-day basis?

The short answer is no one. There is currently no regulatory body responsible for ensuring that the HR industry meets changes in legislation or that can audit a department to certify their adherence.

In order for HR to avoid the risk of employment disputes and legal action, the industry needs two things: a solid regulatory body with real powers to ensure compliance and, in the meantime, a greater internal emphasis on adopting and promoting robust HR processes.

Roger Moore
Roger Moore, general manager at payroll and HR software company Bond Teamspirit.

Red tape and regulation

An increasingly important and growing part of HR’s remit in recent years has been ensuring that organisations stay on the right side of the law as far as workplace legislation and regulation is concerned. As well as helping to avoid tangible penalties and fines, ensuring compliance in this area plays a major role in keeping the employer’s reputation and brand intact. It involves time, resources and considerably adds to the function’s administrative load, but is unavoidable and has to be seen as part and parcel of the job description. The Government may have pledged to reduce red tape, but the volume of legislation and regulation shows no sign of abating.

Whose job is it, though, to regulate HR and ensure it is fulfilling its compliance requirements? The accountability has to come from within and inevitably it falls to the HR director to ensure that the department is self-regulating.

Too little, too late?

This, of course, is easier said than done in today’s high-pressure work environment. Time and resources are squeezed more than ever and some HR departments have only realised that there is an issue with compliance when it is too late, such as when facing a court summons or a fine. Self-regulation is not simply about ticking boxes and being able to demonstrate the appropriate audit and paper trails when required, though. It is about being proactive, and relies on the HR director ensuring the necessary workflows, processes and internal rules are in place. These must be well thought through, robust, and regularly reviewed and monitored to ensure that they are still relevant.

Before they can do this, however, they must make sure the correct educational channels are in place to ensure that the department stays fully abreast of legislation, which is a challenge in itself. When the UK Bribery Act was introduced, for instance, HR departments were quick to distribute information informing employees what was acceptable as a gift and what would be considered a bribe. Similarly, such was the media attention on the Agency Workers Regulations last October that no HR professional was left in any doubt about their potential impact. Not all laws are as high-profile as these though and, as well as reacting to the blockbusters, HR must make sure it is aware of all forthcoming legislation and regulation and how it will affect the workforce.

Cascading information

Signing up for news alerts from a body such as Acas is a minimum requirement for any HR professional. Acas and other professional bodies also stage events on employment law and related issues. Representatives from your department should invest time in attending events such as these. Heads of HR should then ensure that those individuals who have attended events brief others in the department. Attending an employment law course or event is not like going on a training course to gain or hone skills in a particular area. The knowledge gained is needed by everyone in the department and the HR director must ensure that it is properly disseminated and understood by everyone. It is too important a matter to merely assume that the intricacies of what the person has learned will automatically filter through the department or permeate via a process of osmosis.

Having put mechanisms in place to stay ahead of legislation, and created the policies and procedures in response to it, the next step is ensuring the implications of any new laws are articulated to the workforce in a manner that employees will understand. The staff handbook is traditionally where information about new policies and procedures resides and the real-time online environment provides scope to make these more timely and relevant. The handbook, however, remains a relatively passive document whether it sits on the intranet or in an employee’s drawer. But when it comes to information on new employment law, HR departments cannot simply publish information and hope that staff will read and understand it.

Take the 2007 legislation on smoking. Many companies didn’t properly explain that employees couldn’t smoke in what was deemed a company vehicle. When reports filtered back identifying certain individuals, some organisations leapt straight to the disciplinary stage. If they hadn’t properly communicated the changes in the first place, how could they expect an employee to know what was right and what was wrong?

Rather than just issue information, HR must be proactive and hold meetings to fully explain any implications. There is a wealth of technology at the department’s disposal to help it to do this and to continually reiterate key messages. These include podcasts, wikis, videos, online forums and even text messaging. Admittedly, the nature of the law and the level of detail involved in even a minor piece of legislation means that it is never going to be the most scintillating of content, but all of the various communication channels can be exploited far more effectively for circulating information about new legislation and regulation.

Show your value

Above all though, HR must find a way of pointing out the relevance of any new legislation to employees. Too many companies still use a one-size-fits-all approach when explaining employment law. In reality, legislation means different things to different people and the HR department must cater to everyone’s information needs, as time-consuming as this is.

Self-regulation when it comes to legislative and regulatory compliance is a challenge for HR, but it is one that the profession must rise to. As well as keeping their organisations complaint and being seen to be so, it is also a vehicle for demonstrating the function’s value to the board. If the brand is damaged because a company has infringed a piece of high-profile legislation, or financial penalties are incurred which have a direct effect on the bottom line, someone will have to take the blame.

Roger Moore is general manager at payroll and HR software company Bond Teamspirit.

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