Compliance: How to get it right and ensure your business operates safely

Compliance is essential for any business to make sure everything remains above board. But what does it entail?

Business.gov.au describes compliance as “the process of making sure your business and employees follow the laws, regulations, standards, and ethical practices that apply to your business.”

Getting this important component of business right is essential if a company wants to survive and thrive in the market. That’s why establishing an effective compliance program is crucial.

The three main goals of a solid compliance strategy, as listed by business.gov.au, are:

1. Identifying and reducing the risk of breaching the Competition and Consumer Act 2010 (CCA)
2. Remedying any breach that may occur
3. Creating a culture of compliance within the business

There are plenty of resources available to assist in creating an effective compliance strategy. Gartner recently published a breakdown of the top three compliance function trends of the year, highlighting how tight labour markets, an unpredictable economy, and political tensions have resulted in compliance leaders having to “do more with less.”

“Confronted with economic volatility, a tight labour market, and rising geopolitical tensions, compliance departments are adapting their workflows to an increasingly complex landscape,” said Chris Audet, chief of research with the Gartner for legal, risk and compliance leaders’ practice.

“To successfully manage these challenges, compliance leaders should focus on optimising their spending and staffing decisions, adjusting existing budgets, optimising department productivity, and making technology investments where necessary.”

Tighter budgets

Inflationary pressure has forced employers to tighten their wallets. Gartner also notes that offsets from the pandemic have increased workloads, creating a volatile environment for many businesses.

Mr Audet commented: “The majority of a typical compliance budget is spent on personnel. Given that budgets are flat and wage demands are increasing with inflation, retention becomes doubly important.”

Changing labour and organisational dynamics

A decrease in headcounts has shifted the way many organisations operate. Gartner notes that many compliance departments did not foresee this change, creating unexpected issues.

“Increased regulatory scrutiny and rising geopolitical tensions have burdened compliance staff in recent years. Coupled with a more competitive talent market, it has been difficult for many compliance leaders to hold on to their existing staff, let alone increase the size of their departments,” said Mr Audet.

Compliance leaders plan for increased investments in technology in 2023

Tech is unsurprisingly driving many business functions at the moment. Leaders have been forced to invest in order to not fall behind the competition.

Compliance is no different, with Gartner revealing many compliance departments are expecting to see tech as the highest spend increase.

Mr Audet concluded: “This projected increase is likely a response to growing inflation rates and a highly competitive labour market. Rather than rely solely on capital to execute on these increased workloads, many compliance leaders are turning to technology tools to support their work.”

For organisations looking to implement an effective compliance program, the Australian Competition and Consumer Commission (ACCC) provides resources that can assist.