Disparate IT Systems, Manual Processes ‘Adding to Compliance Costs’
Many companies waste valuable resources by maintaining disparate IT systems or using manual processes to remain compliant with laws and regulations governing their workforces, according to a joint study by CFO Research and software group ADP.
They report that complex and evolving regulations are putting pressure on businesses that use in-house systems to address human capital management (HCM)-related compliance requirements. Moreover, some companies may face a “compliance gap” as technology alone generally does not address all these requirements.
The study found that nearly half of the businesses surveyed continue to use separate IT systems or manual processes for handling compliance requirements.
This approach comes with a price – extra time and extra money. More than three in four of the chief financial officers (CFOs) surveyed said they are forced to spend more money on compliance due to a lack of integration between their existing IT systems, while 57% believe entering or updating data takes too much time and effort.
“The research clearly shows that many companies are wasting resources and increasing their risk by using time-intensive manual processes to manage disparate systems for HCM-related compliance activities,” said Doug Politi, president of ADP Added Value Services.
To coincide with the launch of the study, ADP is announcing sweeping enhancements to its SmartCompliance cloud-based platform of outsourced services to help employers better manage key HCM-related compliance requirements.
These challenges can include the Affordable Care Act (ACA), tax credits, employment tax, wage payments, wage garnishments, employment verification, unemployment claims and W2 management.