The influence of changing regulatory demands creates real-world challenges for organizations working in every industry and location. A look at how two financial services companies addressed unique compliance needs reveals that a strategic approach to compliance is essential regardless of geography or sector.
Keep reading for the case studies, then click the box below for a copy of our latest report, “Demystifying Compliance: Priorities for a Workforce Advantage.” In addition to the case studies, the white paper offers insight into key regulatory and compliance issues, as well as strategies for business success.
Worker classification represents one of the most critical challenges for addressing multiple compliance topics today. In the case of one financial services leader, a lack of common definitions to classify the myriad of workers engaging with the company was seen as an urgent business risk.
The challenges of classification touched on several recent and emerging regulatory developments. For example, GDPR (the European Union’s data privacy regulation) and the California Consumer Privacy Act would require the company to know what types of workers were interacting with different systems and data around the world, as well as determine how that data is handled. Similarly, the IR35 law in the UK would demand that the company treat taxes on employee and contractor pay appropriate to their classifications.
To help clarify and address the challenges ahead, the company turned to AGS for insight based on its experience supporting clients facing similar needs around the world. The refocus effort included roundtable discussions that brought together senior management in an unprecedented strategic workforce compliance workshop.
With the foundation for worker classification that spans all parts of the organization, the financial services company is now on a path to keep ahead of new regulations. From payment and benefits to termination, taxation, and a host of related employment law issues, clarity about who is, and who is not, considered an employee will be essential for a future involving an increasingly flexible and varied workforce.
In another example, a leading U.S. financial institution recently experienced an incident related to compliance with federal regulations. That incident stemmed from increased scrutiny on how the company processed candidates in its recruitment efforts. Due to inconsistent approaches in sourcing candidates from suppliers, the company could not always supply relevant information when oversight agencies such as the U.S. Citizenship and Immigration Services (USCIS) sought data to confirm a contractor’s visa status.
To address the issue, the company worked with its AGS talent partner to establish a roadmap for aligning a complex array of talent engagement processes involving pre-identified workers. While the organization had transparency around activities such as posting requests, managing candidate information, and performing drug screening for sourced contractors, the same level of consistency did not extend to suppliers with pre-identified contractors. But through its AGS partnership, the company successfully launched a strategy focused on correcting key workflow needs across its entire workforce supply chain.
Among the initial topics tackled was the fact that talent suppliers varied their approach to candidate submissions. Often, a supplier with a pre-identified contractor would provide potential candidates to the company’s managed services provider (MSP) with a job title and little or no documented job responsibilities. The newly updated process establishes a more consistent workflow, requiring that managers submit a request before identifying a candidate.
This improvement allows the MSP to document a role’s true need and its requirements, after which suppliers must provide candidate resumes that match the need. If USCIS later audits the hire, the request and resume will verify the selected worker’s role and previous activity, and it would confirm that they correspond with the candidate’s visa letter while satisfying the requirements.
Based on a true partnership between the employer and AGS, the company now has an opportunity for change that will ensure the correct workflow goes into effect for all talent suppliers. In a regulatory environment where accurate information is a must, a consistent process flow promotes active talent engagement and positions the organization to have the right data to meet increasingly demanding regulatory needs. Reducing risk and improving workflow is not only good for compliance; it is essential for driving an effective workforce strategy in a challenging industry.
Our latest white paper can help organizations recognize the factors that influence compliance and create a proactive approach to tackling them. Get your free copy of the “Demystifying Compliance” report today and then contact us to learn more about building or enhancing your relationship with Allegis Global Solutions.