Approach with Caution: The Intersection of HR and Compliance

Stacy Spradling
Radius Global Solutions

For the ARM industry nothing is top of mind more than compliance. We have entire departments solely focused on monitoring and evaluating an employee’s ability to engage a customer in both a productive and complaint manner. Who has a stake in ensuring that employees embrace compliance? Operations, absolutely. Training, duh. Quality, indeed.

But what about human resources? Many businesses fail to recognize the dependencies that exist between compliance and human resources. When the two are in lock step, the business wins.

The days of human resources being a hiring and firing mechanism for the business are long gone. In fact, if you are still operating that way you either don’t have a resourceful HR team or you are ignoring the ever changing needs of our industry. Ignoring the role of HR in compliance is risky and irresponsible.

The businesses that have not yet given HR a seat at the table are likely doing so because they simply do not understand where or how the worlds of HR and compliance intersect.

Approaching how the two functions should connect is as effortless as answering three uncomplicated questions.

Do we want employees who are compliance-minded?
Do we want to have a culture of compliance?
Do we want accountability when it comes to compliance?

Unless you just crawled out from under a boulder, the answer to all three is a resounding yes.

Compliance Minded Employees

Initial and ongoing compliance training is essential to maintaining a compliance mindset against the ever-changing regulatory landscape. Nonetheless, no amount of training will avail if the employee is not innately inclined toward adherence to predetermined systems, guidelines and instructions. The HR team must target candidates with past behaviors that indicate their willingness and aptitude for conforming to procedures, standards and directives.

To target these candidates HR practitioners should consider the fundamentals.

Thoroughly cover compliance as a job duty in the job description and job posting.
Center several behavioral based questions in compliance.
- Tell me about a time when a former employer had a strict policy that you found hard to follow? Why was it hard to follow? Were you able to adhere to the policy 100% of the time?
- Tell me about a time when you skirted the rules to make the customer happy?

Culture of Compliance

Conceptually creating and communicating the desired company culture is effortless for most executive teams. However, if the organization does not live the culture, speak the culture, champion the culture and embrace the culture, it is nothing more than a fantasy. A culture of compliance starts with ensuring that compliance is an imperative that is integrated into the daily lives of employees from every function and within every level of the organization.

Again, starting with the fundamentals, the HR team should ensure that compliance is integrated into the following.

Yearly Goal Setting – Every person in the organization should have at least one goal tied to compliance. How does an IT person tie goals to compliance? Building a culture of compliance starts with everyone from the janitor to the CEO asking this question.
Corporate Communications – Does your organization recognize the compliance team as a vital component of operational success? Is there messaging directly from your compliance team in every newsletter, town hall meeting and daily huddle? Be intentional in every communication to advance a culture of compliance.
Company Branding – The compliance imperative should be reflected in every piece of collateral.

Compliance Accountability

Compliance and quality scorecards with a system for identifying and correcting every level of compliance, from failing to recite the mini-Miranda to egregious violations that are grounds for immediate dismissal. Incorporating language from the handbook and other progressive discipline policies will further integrate compliance and HR.
Notifications – Some states require the organization to notify them any time a collector is terminated for compliance misconduct, whether or not the termination was for an egregious act or a series of small missteps that occurred over a period of time. In most organizations, HR is providing these notifications upon termination of the employee. There needs to be a clear procedure on how the notifications will be delivered to state agencies within the time frame outlined in the regulations.
Evaluations – A significant share of the employee’s overall formal evaluation should be directly tied to their performance against compliance goals.
Pay for Performance Plans – The pay out of bonuses should be offset by compliance infractions. Both HR and payroll typically overlap compliance when it comes to bonus offsets.

Hiring employees with a compliance mindset, developing and actively championing a culture of compliance and ensuring accountability to compliance policies are great places to start the conversation between HR and Compliance. When cross functional teams work together frequently on key imperatives, the relationships between departments develop in ways that will only lead the organization to process improvement, compliance and profitability.

Stacy Spradling is the Senior Vice President for Human Resources for Radius Global Solutions. She is also a member of the Compliance Professionals Forum’s Editorial Review Board.