Times are certainly changing for HR professionals. Stricter legislation is having a big impact on employees and businesses alike. At GBG, we wanted to find out how this was affecting HR professionals, so we carried out a survey across our customers and prospects. To read the full report, go to www.gbgplc.com/HR
One in three HR professionals don’t feel up to speed on changing legislation
Our research revealed that a startling 34% of HR professionals are struggling to keep up with legislation changes that impact their employees and organisations. Changes to Right to Work, the Immigration Act 2016 and the 2015 Modern Slavery Act make 32% of respondents feel anxious. Just 28% feel prepared and only 4% are optimistic that the changes will benefit the business.
60% believe it’s their primary responsibility
Despite half of HR professionals not feeling prepared to handle legislation changes, 62% believe it’s their primary responsibility. One in five said it was their manager’s and 9% believed the board should be in charge of monitoring for change.
Mark Sugden, GBG’s Sales & Business Development Director, puts the findings in context:
Our survey tells us that legislation changes are making HR professionals feel unprepared and we still don’t know what the full impact of Brexit will be, which could add further complexity to the situation. HR professionals could be faced with having to report on the nationalities of every member of the workforce. They may have to manage multiple country legislation requirements to ensure compliance.
The Home Office is now targeting larger organisations with adherence audits, with fines or potentially imprisonment when they are found to be employing people who don’t have the right to work in the UK. There’s also debate about extending these penalties to cover “insider fraud”.
The need to know your people is more important than ever before.
The changing landscape around employment screening, legislation and the need to monitor employees more stringently is becoming increasingly complex. Noncompliance exposes a business to employee fraud, reputational risk, reduced turnover and fines. Businesses need to recognise the importance of not just completing the Right to Work checks from a recruitment and onboarding perspective, but maintaining that record throughout their employment.
Employee fraud has hit record levels but less than one in five carry out ongoing monitoring.
39% of people we surveyed said employment screening was their number-one priority. However, less than one in five ran multiple checks throughout the year.
22% said they didn’t undertake any checking throughout the year, and 10% only ran checks when an incident triggered the process.
Last year saw employee fraud account for 32% of all reported cases of fraud in the UK, costing businesses more than £46m in the first half of 2015.
Reports suggest that the true cost is much higher. Payroll fraud alone is estimated to be in the region of £12bn in the private sector. This includes falsifying expenses, setting up salary payments to ghost employees and making false wage claims.
Every business is susceptible to this activity and it’s happening quite regularly without businesses even knowing it. Businesses need to be aware of the risks and have robust processes in place to manage the threat of insider fraud.
As well as the direct costs, a number of high-profile employee fraud cases in the UK have had a massive impact on the brand and reputation of the organisations concerned. Earlier this year, a UK council officer was jailed for five years for giving tenancies to fraudsters claiming to be homeless. At least 20 bogus applications were approved, costing the London-based authority £2.4 million.
What this tells us is that the ongoing checking of staff to determine their honesty, integrity and financial soundness is not only critical to an organisation’s adherence to regulation, but is imperative for the security of a business’s brand, reputation and bottom line.