HBR Compliance report is here!

As part of our mission to help SMBs stay aware of the need to stay HR compliant, we sponsored a Harvard Business Review report on the subject as it pertains to small and medium-size businesses. The data is invaluable for business leaders aiming to build a long-term strategy for HR compliance. This week, we're making this enlightening research available to you, with a few choice excerpts selected below to pique your interest.

Complying with employment-related rules and regulations is a challenge for many small and medium-sized businesses (SMBs) and one that their HR professionals can’t ignore given the major risk noncompliance poses to their organizations. But the task SMBs today face is only getting more difficult as they try to navigate ever-changing employment laws and regulations.

Those rules and regulations include such employment issues as pay transparency and equity, mental health, worker safety, earned and mandatory time off programs, and lactation laws, among many other legal requirements. The demands of the workforce and regulatory authorities require businesses to pay heed to these HR areas—or risk penalties, fines, complaints to the Equal Employment Opportunity Commission (EEOC) or other agencies, and even lawsuits. Perhaps most importantly, with noncompliance, SMBs also risk damaging their reputations.

HR professionals at SMBs know the risks well. In a May 2024 survey by Harvard Business Review Analytic Services of 182 respondents from the Harvard Business Review audience, all working at SMBs and familiar with their organization’s decisions related to HR compliance in the U.S., 87% of respondents agree that organizations face significant business risk if they don’t prioritize HR compliance. Yet fewer respondents (67%) say HR compliance is a top or high priority at their organization.

While HR compliance is a challenge for many SMBs (83% of those surveyed cited at least one challenge), there are best practices that companies can employ to improve their compliance efforts. In the survey, 47% of respondents say that, in order to improve its HR compliance efforts, their organization is establishing HR compliance policies or a checklist, 40% are developing a communications plan to more effectively roll out policies and procedures, and 38% are enhancing HR compliance education and training for employees.

Outsourcing this role can often involve hiring a PEO, which LifeLabs Learning has done as a supplement to its in-house HR team, that handles onboarding, access to benefits, and support and expertise to help navigate compliance. As CEO Priscilla Bala puts it, the company also wanted PEO support because LifeLabs Learning is a service provider and its people and teams are its “best and most important asset,” so having outside help ensures that the company navigates compliance with employee-related rules and regulations. In addition, LifeLabs Learning has engaged external legal counsel to advise the company when it comes to understanding the legal language for HR rules and regulations.