HR Managers- Compliance management & cost reduction

Off late, I have observed many well-qualified HR managers who, instead of updating and convincing their higher management about the best and fair practices regarding compliances and regulatory statutes, focus more on cost reduction and deviation from basic statutory compliances. Especially, this happens in contractual services.

My question is: Is HR management not responsible for unfair practices concerning compliances?

Hi,

HR can suggest/recommend on statutory requirements, emphasize the importance of employee morale, and propose best HR practices to top management/deciding authority in the company. However, the final approval rests with the employer, who typically prioritizes the bottom line of profit and loss. Especially for mid-sized companies, increasing profits compared to the previous year is often the primary goal, leading employers to sometimes overlook strict adherence to statutory regulations. HR heads/HR managers, along with employees beyond a certain limit, often have no choice but to accept the final decisions of the employers.

Dear Bijay Majumdar,

Thanks for asking a good question. Primafacie, the reply to your question is yes, HR professionals are very much responsible for promoting fair business practices or highlighting to the management unprincipled business practices.

However, HR is one of the departments of the organization. We need to check what kind of culture is being promoted by the top leadership. Ethical or unethical, the HR just toes the line of the top leadership.

The other reason is India is a price-sensitive market and the competition is cut-throat. To sustain the competition, the management leaves no stone unturned to save the cost. Sometimes they adopt disingenuous ways also.

Therefore, the larger issue is promoting a culture of ethical business practices at the national level. It has to come from political dispensation. Whether the current political dispensation has time and interest in doing so is a point to moot!

Thanks,

Dinesh Divekar

I do agree with Dinesh & Lakshmi Narayanan's views.

The leadership team might think that by ignoring compliance, the organization will save costs. However, as an HR professional, it is our responsibility to consider the benefits of compliance and the savings to the organization. It is crucial to recognize that the cost of non-compliance can be much higher than compliance whenever it occurs. Many organizations, occupiers, owners, managers, directors, proprietors, and partners have experienced this, and I prefer not to name specific instances here.