Friday, March 29, 2024

An Agile Approach to HR Compliance

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Human resources compliance is often seen as an add-on at the end of a business process. I argue for integrating HR compliance incrementally into a company’s work flow.

Cars are assembled on a line. Software is developed in short, planned spurts called “sprints.” Compliance, on the other hand, is often cobbled together without an understanding of how separate projects make up a program framework. Why is this? Traditionally, compliance comes at the end of things. It can be an afterthought, a “we gotta check with the lawyers” thing right before a launch. We believe compliance can be planned to grow incrementally according to business needs.

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Today’s popular development methodology is agile. This is really just a method of prioritizing and developing in sprints to get a minimally viable product to market as fast as possible. Add-ons, bells, whistles and bug-fixes all come in second, third and seventieth waves. Companies don’t wait to release the best possible products, and customers are willing to sacrifice functionality in exchange for frequent, targeted rollouts of additional features and fixes. At its core, agile is about recognizing that actual rather than imagined customer preferences should drive feature development priorities.

Why can’t we integrate compliance into HR the same way? We can, but it’s hard. It means understanding where our risks are, reducing risk where the need is greatest first and rolling out additional fixes in order of priority. We know HR compliance is essential and that compliance risk management can make or break a company’s reputation as well as its bank account. Changing our mindset from “build the perfect system” to “build what we need most now” can help us adapt at the pace of agile.

The Ability to Pivot

Agile practitioners pride themselves on their ability to pivot. Compliance professionals working in an agile environment need to be experts at constantly identifying, assessing and prioritizing risk. When an employer hires its first employee, the compliance issues are relatively small. The risk at the 50th employee is much higher, and many more laws apply. At employee 51, employers should have an FMLA policy, for example. An HR compliance professional should identify this risk and assess whether the company should prioritize this over other competing demands on HR resources.

Agile methodology requires daily, sprint-length, and retrospective checkins to ensure everyone is aligned on work priorities. These check-ins allow for flexibility to pivot based on changing circumstances. Is growth getting to where HR needs more policies? Are employees asking for a new benefit? Have we noticed increased enforcement from a state or federal agency? Knowing where to spend our limited amount of time and resources is difficult. True compliance risk assessment is ongoing and needs to adapt to both an increasingly disruptive market and the agile methodology businesses have developed to respond to it.

No One-Size-Fits-All

There isn’t a one-size-fits-all approach to HR compliance. There certainly are templates and policies that are required at each growth stage, and you can purchase an employee handbook template or download some sample agreements. But no vendor will ever know enough about your business to tailor these materials to your risks, culture or incentive structure. Your company may need airtight noncompete agreements, for example, where another company isn’t worried about them. Buying a generic package or tool is a mistake if you don’t understand your company’s risks and have an informed strategy for responding to them.

Once you’ve identified a strategy, agile methodology gives you the tools to achieve it in practice. Focus on breaking tasks into their smallest component parts, prioritize and rank those tasks, determine what you can do in the next two weeks to one month, assign resources, and check in daily on progress and roadblocks. Working incrementally not only gives you the ability to pivot if the business changes direction, it also ensures you have a framework that mirrors reality.

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