Strategic HR Compliance – 3 Ways to Leverage Compliance to Improve the Bottom Line

Corporate Executives Leading Positive HR Transformation

Heading into a new year is always a time for reflection and planning. This makes it a good time to reconsider how we think about HR compliance.

It’s time that we start thinking about HR compliance as something more than just a risk to be managed. Instead, we need to think about HR compliance as a strategic tool to be leveraged by HR. The time is ripe for this change in thinking. HR increasingly acts as a strategic partner to the business, and is tasked with ensuring that HR policy, procedures, and governance align with the organization’s overall objectives. Compliance ties directly to many strategic goals, including:

  1. Improving ESG score
  2. Retaining employees
  3. Attracting new talent

We are all familiar with the “lawyer” rationale for caring about compliance (risk management). But thinking about the other, more strategic reasons, helps us understand how we can leverage HR compliance. 

How can HR teams leverage compliance to strategically help the business?

1. Attract investors.

According to a new report cited in the Canadian Human Resources Director, “an increase in employers’ environmental, social and governance (ESG) investment leads to higher profits”. ESG is here to stay and its importance provides an opportunity for HR to demonstrate its strategic value to the business.

HR compliance is directly connected to ESG – the “Social” factor in ESG encompasses the way that employers treat their employees. Investors are looking at this and so are prospective employees. Forbes recently reported that “…47% of investors considered the “S” aspect of ESG to be the most important when making decisions, overtaking “E” at 35%. Further, as organizations navigate the complex road toward societal change and demands for transparency, HR is key in molding the message regarding social issues“. 

The emphasis on the treatment of employees increased during the pandemic with investor and media attention focused both on employers who demonstrated care for their employees and on those that didn’t. ESG provides an excellent opportunity for HR teams to demonstrate their value to the business by highlighting how their work contributes to a strong ESG rating. An organization with a strong HR compliance program can leverage this to show investors that they have processes in place to protect their employees’ health, safety and well-being, but also that they are on top of any changes to those requirements. 

2. Retain employees.

Most employers are dealing with an incredibly tight labour market. Employers can’t fill positions and they are working hard to keep the talent that they have. A recent report on what employees want from their employers highlights the connection between worker needs and compliance. 39% of Canadian employees want more balance between their work life and professional life, 28% want enhanced remote-working options and 9% want a better working culture. Compliance impacts on all of these issues.

Employees are also more engaged, more informed and less afraid to speak up. Quiet quitting is an example of this – employees know what they can be required to do and they are not doing anything more. They are sending a message that compliance with employment laws is important to them. Being transparent about HR compliance can help build trust with your employees. Leveraging your HR compliance program to help your employees understand their legal rights, and show them that you are complying with those rights, demonstrates that you are listening to them and that you are concerned with their well-being.

3. Attract new talent.

A recent article by the Canadian Human Resources Director notes that “[e]mployers with high-level ESG scores are rated as attractive by both employees and potential future hires”. Ensuring that you have a strong HR compliance program, and promoting that program, can help boost an employer’s ESG score. Understanding your minimum legal obligations as an employer allows you to highlight where and how you exceed those requirements.

In addition to boosting the ESG score, the reputational risk of non-compliance is a serious risk. As an employer, if you aren’t even meeting your basic legal obligations, how do you convince prospective employees that you are a good employer? Instead, leverage the fact that you take HR compliance seriously to demonstrate to prospective employees that you are a professionally-run organization that cares about its employees. Share with prospective employees how you manage HR compliance, including how you ensure that you are staying up to date with legal changes that affect their rights.

Key Take Aways

With the importance of ESG, HR compliance is now a lot more than just table stakes. ESG emphasizes transparency and reporting, and employees, prospective employees and investors are looking for transparency too. HR teams can add strategic value to the business by being transparent about their HR compliance program. Share with employees, prospective employees and the broader community the way you manage compliance. Use this work to demonstrate the internal strength of the organization and to highlight the importance of employee safety and well-being.

How Compliance Works Helps HR Professionals

Compliance with constantly changing employment laws and ongoing changes can be challenging and time consuming. Compliance Works explains current employment legislation and stays on top of changes to employment laws – across the country. Use Compliance Works to create reports to quickly compare your organization’s policies to the current requirements.

Contact us to Request a Demo , subscribe to Compliance Works publications, or email us at to learn how a paid subscription to Compliance Works can help your HR team succeed.

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About the author

Gayle Wadden
Gayle Wadden CLO, Compliance Works
Gayle Wadden is a senior lawyer with deep experience in employment and corporate law. She is responsible for overseeing Compliance Works’ legal content.

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