In today’s world, staying compliant is no longer an option. Especially since organizations are managing their operations remotely, governance bodies are getting more strict about following laws and guidelines. Failing to adhere to the regulations imposes hefty fines on organizations—small businesses or big enterprises.
Here’s a thought—regulatory compliance isn’t as ‘brutal’ as it seems. Sure, it’s a time-consuming process and, in fact, a never-ending one, but it benefits a business in many ways. Think of it as a shield that safeguards the integrity of your business and keeps your customers and employees safe.
This article will uncover five ways in which compliance benefits a business.
What are some regulatory laws that govern businesses?
But first, let’s discuss the common regulations that exist to govern various industries.
New York SHIELD act
As the name suggests, this act protects the residents of New York by ensuring their data security. Companies that collect the information of New York residents through a transaction, browser cookies, or any other form of online or offline interaction are mandated to follow the New York SHIELD law of data security.
Information, including account numbers, biometrics, card details, passwords, security codes, etc., are safeguarded by the law. Additionally, it enables businesses to educate their staff and take specific security measures such as risk assessment, data disposal, software renewal, and more.
There are also security laws applicable to other countries and regions, including the California Consumer Privacy Act (CCPA) and General Data Protection Regulation (GDPR) for EU countries.
The Environment Protection Agency in the US imposes laws for organizations to keep pollution levels in check and prevent the environment from degrading. These laws are especially implied for factories or power plants producing large amounts of waste and govern which type of equipment must be used to minimize pollution.
Laws by WHO
The World Health Organization (WHO) covers a wide range of health regulations, particularly in the healthcare sector. It governs how healthcare workers must use drugs and medical equipment to ensure they’re safe for consumption.
The Equal Employment Opportunity Commission (EEOC) has set laws to ensure organizations conduct fair requirement processes and do not discriminate against the candidates over their race, gender, language, ethnicity, past salaries, and many other attributes.
The Occupational Safety and Health Act (OSHA) includes the laws set by the US government to protect employees against occupational hazards. It enables organizations to take health and safety measures, including fire, electricity, food, and many other departments.
Benefits of following regulatory compliance laws
Ensuring regulatory compliance requires businesses to take extra precautionary measures and sometimes go to extreme lengths. After all, a business deals with many operations regularly, such as data, finances, travel, taxes, recruitment, training, and much more.
Let’s understand the bright side of taking the extra step to ensure compliance.
1. It helps you mitigate and manage data privacy risks
Tons of data go around in a business—from clients, customers, and employees. A lot of this data is collected through surveys, transactions, cookies, forms, or social media monitoring.
Let’s get real—we live in a world where data is no longer safe when unprotected. Lurkers (read hackers) are always on the lookout to break into a network and steal or misuse an organization’s data.
Think about it—if a hacker acquires access to your data, they may wipe out cash from a bank account, leak a piece of very confidential information online or run a scam using stolen ids and passwords.
This is why different countries have set strict laws to help organizations protect their data. They’re only allowed to collect data they’re really going to use, keep it up to date and remove it from their systems once it’s no longer required. There are also rules concerning sensitive data and even classifying which data is suitable to be called ‘sensitive.’
By adhering to data privacy and security laws, you’re literally saving your data from getting into the wrong hands and protecting your business’s assets. It helps to stay vigilant toward any suspicious activity happening in your networks, identify a potential vulnerability, and nip it in the bud before it goes haywire.
2. You reduce costs and make your operations more efficient
There are different ways in which regulatory compliance helps you reduce costs in your business. First, when you implement strong security protocols in safeguarding your business operations, you’re building a firewall that holds off uncertainties before they do real harm.
Suppose someone has gotten hold of an id and password from your customer’s database. But since you’ve implemented 2-Factor Authentication (2FA) in your login process, they’ll still need to pass through two levels of authentication to prove their identity. As a result, they won’t successfully break into the account, and you’ll be prompted to change your passwords or increase security levels in time.
Imagine the trouble it would have imposed if there was downtime due to the breach and a lot of time and effort had gone into troubleshooting and restoring the lost data.
Next, by adhering to compliance laws, you’re avoiding paying hefty fines as a result of non-compliance and restitution to customers. For example, as a food supplier, if you’re unable to adhere to a quality compliance law and the food goes bad upon purchase, customers are likely to initiate a recall. As a result, this costs a fortune, and you lose customers.
3. Your customers and stakeholders trust you even more
In the above example about food recall, imagine what would happen to a business’s reputation upon such bad publicity. Not just in the food industry, even when a company is in the news for a data breach, it’s not long before it catches the eye of your customers and potential customers, altering their trust in you.
In worst cases, a customer caught between data breaches, food safety, or recruitment discrimination can file a lawsuit against you, resulting in more defamation.
When you do the right thing and stay fully compliant in your business, your administrative district actually issues you compliance accreditation. This is a token of appreciation that a business receives when they meet a certain set of criteria fixed by the board.
This certificate can be a game-changer in the way a customer or stakeholder perceives your brand. They start seeing you as a trustworthy place to do business and respect you for your moral values and conduct.
4. It helps you create a positive work environment
Where there are rules and procedures, there’s a system and discipline. People like to be a part of such a culture where every operation is handled in an orderly fashion. They know they’re a part of an organization that does right by its employees and customers, and there’s no scope for foul play anywhere.
More importantly, it allows organizations to dig deeper into how things go around in their operations. It gives the staff a chance to get to know the business better, discover insights and help improve overall efficiency and management.
So, help create an energetic work environment by exploring employee development ideas and equipping your employees with the right skills and a nurturing atmosphere.
5. You retain and attract top talents
This is largely relevant to compliance related to employment and engagement, which determines whether your employees are happy or not. The compliance laws regarding employment are about conducting a fair hiring process, taking necessary steps to onboard new joiners, keeping employees engaged, rewarding top talents, and, more importantly, paying fair compensation.
Failing to adhere to these laws results in a higher attrition rate, which only attracts bad press. Let us give an example.
Let’s say you’re hiring for a role and are in the middle of an interview. It all went great, and you’re impressed with the candidate. However, toward the end, in an effort to lighten the atmosphere, you knowingly (or unknowingly) passed a racist remark that turned everything around.
What will be the impact of this?
The candidate will be flustered by your reaction and will probably avoid joining the company. Moreover, if your existing employees don’t feel valued and respected in their jobs, they’re likely to quit and spread the bad name in the market too.
However, staying compliant with employment laws helps you form a good first impression and stay on the good books of your potential employees in the market.
Staying compliant helps your business grow
Compliance laws exist to enforce ethical behavior in organizations. But more than that, they safeguard both a business and the customers against unethical and unfortunate events—so, a win-win for both.
Think of following compliance laws as going the extra mile to ensure a smooth customer experience and collaboration. Moreover, it makes you stand out among those businesses that couldn’t care less about safety or moral conduct.
Latest posts by Jennifer Evans (see all)
- 7 HR Management Tools To Fill Any Remote Position in 30 Days - November 14, 2022
- A Complete Guide to B2B Chatbots (With Use Cases) - November 14, 2022
- 5 Ways Regulatory Compliance Improves Your Business - November 10, 2022