To tell anyone in HR or payroll that compliance is important is stating the obvious—you know it, we know it.
Compliance is so significant that payroll and HR departments spend approximately 36 hours a week—enough work for a dedicated full-time employee—on compliance-related activities, including navigating regulatory changes to ensure that company policies keep up.
But what might not be as obvious is how to ensure compliance, especially in global organizations, where complexity is compounded by borders, languages, currencies and customs.
An area of compliance that is an especially “big deal” to multinational companies is the privacy and security of employee data, particularly in the age of GDPR. This landmark and far-reaching legislation, now in its second year, affects any organization that has employees in the European Union, and there are stiff penalties for noncompliance. Companies found to be improperly storing and processing employee information can face fines of up to 20 million euros or 4% of annual revenue, whichever is higher.
HR and payroll teams, charged with managing and processing sensitive employee data—such as names, addresses, birthdates, pay scales, tax codes, bank account numbers, employment contract statuses and more—must remain vigilant to protect both the employees and the organizations they serve.
Technology can help
Though people are ultimately responsible for keeping employee data private and secure, technology can and should play a role—not just with ensuring compliance, but also with making compliance more efficient. In fact, companies that make use of newer technology solutions in their HR and payroll organizations spend nearly 10 fewer hours per week on compliance, according to a recent survey by The Workforce Institute.
One way technology can help with compliance related to employee data is by integrating payroll and HR systems and processes in an HCM or HRIS. If an organization maintains separate systems for important functions such as payroll, benefits and tax reporting, it’s likely that employee data is maintained separately, and potentially manually as well. And that could lead to trouble: 47% of HR and payroll professionals say that having multiple, duplicate employee records leads to increased compliance risk, per the Workforce study.
More inputs and more touchpoints mean more opportunities for data entry and duplication errors, and a technology-based integrated system can automate redundant tasks and help ensure data accuracy and compliance.
Another way an integrated technology solution can help with compliance is by providing better visibility into how the organization as a whole is managing employee data. Whether specific compliance responsibilities fall within the payroll or HR functions, or both, a broad data view can help you track changes and view updates made to personnel files, often in real time.
Technology can also help organizations safeguard employee data. Using a cloud-based platform can protect sensitive employee data from physical risks associated with legacy on-premises systems; for example, storing data securely in the cloud lessens the impact of a misplaced laptop, an office break-in or a building fire.
Additionally, a platform provider with the appropriate data security credentials, especially those that specialize in GDPR, can help give the organization peace of mind that it is complying with applicable laws and requirements for storing employee data.
GDPR as a benchmark
When it comes to data privacy, the GDPR is widely considered to be the most stringent. So even though it is only enforceable to organizations with employees in the EU, companies around the world should look to GDPR principles to guide their HR and payroll data processes. With GDPR as a guide, companies can ensure employee data privacy and focus on other compliance requirements.
Want to learn more about steps your organization can take to boost security and ensure data compliance? Contact us to speak with a global payroll expert today.