What is the Real Cost of Non-Compliance?

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Business

Published on April 25, 2014

Author: contract-management-software

Source: slideshare.net

Description

Organizations that do not put enough of an emphasis on the employee education and training for compliance will likely experience these pitfalls. Here we will demonstrate the loaded implications for the three most crippling effects of absent employee compliance education.

Big Implications for Minimal Employee Compliance Education Courtesy of ConvergePoint

Fines & Legal Implications Wasted Resources Mismanaged Time Organizations that do not put enough of an emphasis on the employee education and training for compliance will likely experience these pitfalls. Here we will demonstrate the loaded implications for the three most crippling effects of absent employee compliance education.

Not ensuring that your employees are compliant can land an organization and its responsible parties hefty fines and possible incarceration. Although most organizations are equipped with staff designated for these roles, an important task is to ensure that each member knows their specific purpose. After they have come to understand the sole purpose of their employment, they can begin to think outside of the box for solutions to their daily tasks (Making your employees their own decision maker empowers them, and in turn benefits the business). Ensuring every employee is compliant comes down to ensuring that each person involved in management is empowering their employees with the knowledge and tools to succeed. Non-Compliance Penalty Examples:  HIPAA – Fines up to $250k and 10 years of imprisonment  OSHA – Fines up to $70k  ACA – $2k per employee for 101+ employee businesses ($202,000 for a 101 employee business)  ECOA – Fair Housing first time violations up to $16k, third time offenses up to $65k. *Solution: Dedicate or create specific roles for the management of compliance.

Although many companies hire compliance specific roles in their organizations to enforce regulations, they do not provide them with the tools for success that can increase their productivity. Instead, thousands of dollars are wasted due to factors such as:  Compliance team suffering due to lengthy searches through shared drives and emails  Employees not knowing where to locate policies and procedures, or determine which apply to their role  Managers tracking acknowledgments manually, through email, or by word of mouth. All of these can be time consuming and prohibit your leaders from performing their essential duties. Average Salaries:  Compliance/Policy Director : $87,500  HR Manager: $59,300  Risk ManagementAnalyst: $59,300 Total wasted talent costs for only 3 employees: $200,000+ annually. *Figures adopted from payscale.com *Solution: Supply your compliance team with resources that will improve the use of their time.

Time is money, and not complying with regulations for policies or procedures will more than likely result in a lot of wasted time. Not complying with regulations probably means you are doing things the more difficult way.They are not in place solely to ensure that businesses are treating specific issues justly. Although it does constitute one reason, another is that most individuals do not consider that businesses can actually function more smoothly through following set policies and procedures. Due to the impact of a task or method on another function within an organization, certain policies and procedures may be in place to cohesively align each function. After an organization has failed a compliance audit, or non-compliance has resulted in litigations, the time and costs associated in addressing these issues can be disabling for a business. Time Consuming Results:  Wasting time performing tasks in non-productive ways  Employee rate cost for tasks that are not productive or harmful to the business  Putting you at risk for legal repercussions due to unregulated procedures within your organization  Litigation Costs, Meetings, and Paperwork *Solution: Ensure policies are accessible & that employees understand why certain regulations are in place.

Find a method that works for you – Every organization has a different need. Small Businesses (<1k Employees) Small businesses benefit from applying best practices in policies and procedures. Incorporate the automation of one or two of your processes (Employee Certification, Etc.) to save your team more time. Mid-Sized Businesses (1k-5k Employees) Mid-sized businesses will benefit from automating the entire lifecycle of policies and procedures using your metadata for simplified searching. Enterprise Sized Businesses (5k+ Employees) Enterprise-sized businesses will benefit from a program that not only automates the entire policies and procedures lifecycle with advanced search functionality, but also allows for custom real-time dashboards and reporting through the use of metadata. To consider all aspects of a Policies and Procedures program that satisfies your needs as a unique company, visit the article: 5 Steps to Ensuring Employee Compliance

Read more ConvergePoint Best Practices, or contact us directly: 1|888-484-8048 convergepoint.com

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