Compliance Matters: What’s at Stake for the Finance Industry
All rules governing a workforce management program, whether they are internally developed business rules or externally imposed governmental regulations, are critically important to the success of the initiative. Knowing the rules alone is not enough to guarantee results. Operating without adherence can put organizations at significant risk.
This is the first post in a multi-part series on why compliance matters in effective workforce management programs on an industry-by-industry specific basis. Today we’re examining the role played by ensuring compliance within a workforce management program for organizations in the finance vertical markets.
The term compliance in is weighted, as finance is among the most highly regulated industries in the world. With billions of dollars in transactions processed daily between retail banking and investment banking, it goes without saying that strict compliance with regulatory mandates are essential to this global industry. This is why finance organizations leveraging workforce planning and management solutions are particularly sensitive to the compliance issues that come with contingent and contract workers. However, this sensitivity doesn’t always translate into action.
The VP of Legal in any financial institution will confirm that these organizations need to address issues such as contract administration of staffing agencies that are often fragmented and de-centralized. With the meteoric growth of the financial sector continuing, the use of non-employee labor has progressed through departments with atypical users of contingent resources. Particularly in the IT-related fields critical to producing online banking experiences and other cutting edge banking offerings, the usage of contractors by finance is at an all time high. Competition for these resources is fierce, inviting the use of workforce management shortcuts that can imperil a program.
With so much financial regulation in play, it is essential that the onboarding and screening processes used by staffing suppliers be streamlined and fully auditable. Gaining visibility into the contracting terms across a diverse supplier base can be difficult and may be creating serious risks for the organization in such areas as indemnification, professional/general liability, co-employment, 1099 contractor misclassification, and myriad others. Legal departments within finance organizations leverage best practices from workforce solution providers to establish replicable processes and ensure compliance throughout the supplier base.
Any infractions subsequent to compliance failures in any of these areas is especially concerning for financial companies whose reputations could potentially be severely damaged by even the appearance of impropriety. All together, these industry specific challenges underscore the need for proven effective Managed Service Provider providers to serve this burgeoning industry.