Financial budgets are tighter than ever before. Cybersecurity risks loom large. Regulatory requirements are becoming more stringent by the day. In today’s changing business environment, companies have been forced to overcome these various challenges to keep themselves out of harm’s way.
Regardless of whether your organization has a dedicated compliance officer on staff, there are growing compliance risks that must be accounted for in the months ahead. Does your business have a suitable plan in place to protect itself from these liabilities?
Here are some of the most pressing compliance risks that organizations will face in the months ahead—and how your company can mitigate them.
Take a look at your business’s compensation strategy. Does it look a little antiquated? If so, consider updating your pay scales to more accurately reflect current market trends. Gather your HR and finance executives together to discuss an approach that is suitable for your company. When putting together this plan, be mindful of state and federal laws that have enforced equal pay legislation. According to NBC News, 49 states have adopted equal pay laws—Mississippi is the lone exception—so be sure to read up on the rules that govern your local jurisdiction.
IT and data security
Cyberattacks have been on the rise in North America—particularly after the start of the pandemic. The FBI reported a 300 percent increase in cybercrimes since the outbreak of COVID-19. Does your organization have the necessary safeguards in place to shield itself from harmful intruders? Beyond implementing a robust tech infrastructure with the integration of two-factor authentication, companies should also conduct cybersecurity training for all employees. Studies—like the one conducted by Cybint—show that 95 percent of cybersecurity breaches are caused by human error. By educating workers on how to recognize and avoid phishing scams, these organizations can avert potential disasters from surging cyberattacks.
Although this may not be an idea that is top-of-mind for many company executives, businesses must be cognizant of their employees’ activities while working from home. Many have considered the COVID-19 crisis to be the “perfect storm” for employee fraud. With greater autonomy and less supervision, workers have been given never-before-seen amounts of control over their everyday work lives. Organizations should look to integrate an auditing team or department to mitigate the impact of potential internal fraud.
According to a recent study from Forbes, about 14 percent of American workers stated that being an independent contractor was their primary job. Does your organization utilize a population of independent contractors? If so, there is a chance that some of these resources may be misclassified. The incorrect categorization of independent contractors can generate substantial losses to both the federal and state governments in the form of lower tax revenues. Businesses that are found to be misclassifying ICs can face severe civil and criminal penalties—which represents a significant compliance risk. Be sure that your organization is not punished for wrongdoings when classifying independent contractors.
Remote work preparation
One of the most critical areas of workforce and compliance planning deals with the preparation for remote work. From technology and internet connectivity issues to legal and privacy concerns, there are dozens of moving parts that must be squared away before a company can feel confident about its remote work strategy. Despite the savings that may come from lesser office and other operating expenses, factors such as heightened IT security bills and increased tech equipment expenditures may add unexpected amounts of money to overall business costs. Before making any decisions on remote vs. in-office work, survey your employees to generate an understanding of their wants and needs.
In the ever-evolving business world, organizations must always remain on their toes to prepare for potential compliance risks. Whether companies are enhancing their cybersecurity programs, modernizing their compensation structure, or preparing for a remote workplace environment, businesses must be mindful of potential threats that can undermine their success. By emphasizing compliance and placing it at the forefront of the organization’s overall business strategy, companies will effectively mitigate the abundance of risks that currently exist today.
Interested in learning more about post-pandemic talent trends? Check out Carl’s latest “Talent Talk” conversation with Patrick Worsham, Chief Financial Officer at Delta Financial Group and Mother Kombucha, here.
This blog was written by TalentRise’s Senior Vice President Carl Kutsmode.