Using Compliance to Build a Positive Company Culture

Editor's Notes

1. BHR (moderator): Before we begin, I want to make a special note of one thing. We are not offering official legal advice during this webinar. You should always consult with a professional legal team for specific policy questions and compliance advice. Anything we discuss today is simply our opinion. 
2. Cassie Whitlock: Director of Human Resources at BambooHR I started my career in accounting, but working with smaller companies, the HR function was always handed to me and became my passion. I love the intersection of business and humans and believe that when companies focus on the human aspect of their people, the people in turn focus on the business. Humor and a thoughtful, listening nature are the mark of my leadership style, and I view my team as family. We enjoy working hard together while we learn, grow, and execute on business-critical initiatives. Libby Powers: Client Success Consultant at BizLibrary Libby works with her clients on training strategy and marketing as a Client Success Consultant with BizLibrary. As a Client Success Consultant, it is her responsibility to build and sustain meaningful client relationships, ensuring success of clients with their learning and development needs. She works strategically with all levels of organizations to gain optimal results with the BizLibrary solutions. Prior to her work at BizLibrary, Libby worked as an account executive, operations director, and teacher.
3. BL Intro: Hi everyone! Today we are talking about compliance. Unfortunately, we have all witnessed some companies fail at staying compliant, but we aren’t here today to give you a play-by-play of what went wrong or give legal advice. Instead, we want to look at how these instances have created a spotlight on the importance of using compliance to build a positive culture. These instances have proved to be an example, or probably a better term, “wake up call,” for what can happen to your business if your company doesn’t focus on its most important piece — its people. (transition line into the history of compliance….) 
4. BHR Historical attitude toward compliance = reaction to a mistake Ex: Federal Employers Liability Act (FELA) was in response to the rapid expansion of the nation’s railway network and increasingly dangerous conditions for railroad workers. Because of FELA, for the first time in the United States, employers could be held liable when workers were injured or killed on the job. Other shocking studies and publications led to government regulation Modern day attitude = don’t wait for government to “fix” what’s wrong; do it because it’s the right thing to do
5. BL The cost of non-compliance and a negative company culture The cost of employee disengagement When all the players on the team are not playing to their full potential, then the team loses. We can think of employee disengagement in the same way. If an employee is experiencing disengagement due to a negative company culture brought on by non-compliant actions, most likely they will not be able to produce their best work, which causes the “team” or company to lose. The cost of continuous losing can be a financial loss and an emotional loss.   
6. BL Emotional Losses and Financial Losses that we are going to discuss today. Loss of productivity Loss of mental health Poor company reputation Loss of profit / expensive Lost customers from bad PR Potential Lawsuit settlements
7. BL 1. Loss of productivity   CRB labeled decreased productivity as one of the most profound and damaging symptoms of employee disengagement. The most damaging symptom being the decline in the quantity or quality of an employee’s work. According to a recent poll from Gallup, only 33% of workers in the United States are engaged in their jobs, with the remaining 51% of employees being disengaged and 16% actively disengaged. Let’s look at how this emotional loss can quickly become a large financial cost.    
8. BL Disengaged employees can cost a company 34% of their salary Actively disengaged employees cost the U.S. $483 billion to $605 billion each year in lost productivity. (https://www.shiftboard.com/blog/real-cost-employee-disengagement/)
9. BL 2. Loss of mental health Another critical loss a company can face from a negative culture brought on by non-compliant actions is the loss of employee mental health. Any actions that violate company policy or corporate integrity, like unethical behavior, discrimination, sexual harassment, and even coming to work late can cause discomfort and distraction for employees. They may suffer anxiety and sleepless nights wondering if they should say something and risk getting caught in the middle of a conflict. We probably all can admit that at times work can cause us stress, but increased stress and a decrease of mental health for employees can cost a company billions of dollars. Let’s look at the numbers:   According to the Center for Disease Control and Prevention (CDC), depression is estimated to cause 200 million lost workdays, costing employers between $17 and $44 billion each year. 
10. BHR 3. Loss of employer reputation Bad culture can lead to a bad reputation among employees, which spreads to candidates AND customers According to Harvard Business Review, the top three factors that contribute most to a bad reputation as a place to work are concerns about job security, dysfunctional teams, and poor leadership. Compliance could make an impact with each of these factors Bad reputation makes hiring much more difficult and expensive: According to a Glassdoor study, 95 percent of job seekers surveyed say an employer’s reputation impacts their decision to apply or not. And according to Harvard Business Review, a company with 10,000 employees could be spending as much as $7.6 million in additional wages to convince candidates to take jobs despite the poor reputation.
11. BHR 3. Loss of employer reputation Bad reputation also impacts how customers view your brand. Don’t have to look far for examples: An older survey from 2012 showed that 59% of consumers expressed that a company's ethics and practices are important factors in deciding what brands they will buy. That concern has likely only increased as technology makes brands and company cultures more transparent Libby will touch on the remaining three emotional costs…
12. BL 4. Loss of profit / expensive Not only does a negative company culture created by non-compliant action cause new players to not join and veteran players to want to leave, but your fans (customers) start to see the negative culture and start to support different teams. No one wants to support a team that is continuously losing. – and we all know that loss of customers equals loss of profits. Profit loss can be decreased by upholding a positive company culture. Here are some examples where companies profited because of a positive culture: -    Taco Bell restaurants with the lowest turnover rates saw a 55% increase in profit (https://www.entrepreneur.com/article/238640) -    75% of Zappos orders are from repeat customers because their customer service is so great (https://blog.kissmetrics.com/zappos-art-of-culture/ )
13. BL 5. Lost customers from bad PR The way you handle a negative situation can allow you to keep some of your customers, but also — if not handled correctly, you can lose current customers and also potential customers. Thanks to social media, non-compliant actions due to a negative company culture can be spread across the world within seconds. Inc.com wrote an article about the top five reasons companies lose customers, they said “Negative commentary can bruise your business' reputation as fast as poor commentary is shared on social media, spoken in a local area, or written directly to a company.” Don’t forget that what you do or say after the negative word is out, is just as important. How a company handles these scenarios shows their true company culture. If firing your most lucrative athlete or reporter is what is right -- if you want to avoid even more losses -- do what is right. 
14. BL 6. Potential Lawsuit settlements A negative culture tends to breed negative employees, which are more likely to cause lawsuits, costing the company even more money. But an article from Helios HR pointed out that, “An organization which ignores situations caused by toxicity in the workplace is more likely to be sued by an unhappy employee who feels victimized. Regardless of whether or not the lawsuit comes to fruition, the matter itself is enough to cause distraction and discord in your workplace.” (https://www.helioshr.com/2015/02/what-a-toxic-culture-can-cost-you/) If an organization ignores the negative culture, then they are going to lose just as bad as a company that creates a negative culture through non-compliant actions. This is the case for all of the losses we covered. And nobody wants to be on either of those teams. Cassie commentary – People don’t speak up… 
15. BL We want to build a company and team that people want to join. When a company uses compliance to build a positive culture, the following things happen: 1.Minimize Legal Problems 2.Enhance Operations 3.Increase in Employee Engagement and Retention 4.Improve Public Relations and Reputation/Employer Brand
16. BL 1. Minimize Legal Problems One thing that happens when compliance is used to build a culture, is the amount of legal problems are minimized. The team is “playing by the rules” and starting to get everyone on the same page. Lawsuits are a huge distraction for a company, so if you are making steps within compliance to avoid legal issues, then you are off to a great start in building a positive company culture. And it isn’t only minimizing legal problems but enhancing operations…
17. BHR 2. Enhance Operations You can use your compliance strategy to create a more efficient, productive workplace as well: Fewer safety incidents or quality defects (safety compliance) Healthier employees (reasonable work hours and conditions) Streamlined, standardized operations (payroll, scheduling, etc.) Accurate, reliable data (data security) Sheds light on practices or processes that need improvement (frequent audits)  Transition: Adding business value – another place is looking at engagement and retention…
18. BL 3. Increase in Employee Engagement and Retention Employee engagement and retention grows when a company builds a positive company culture. If the morale of the team is high, the players want to stay and the more people you can recruit. An article from entrepreneur.com said that companies with happy employees outperform the competition by 20% and found that happy workers are 12% more productive than unhappy workers. Building a positive culture where employees are happy definitely pays off! Transition: If employees are happy, they’re saying good things about you! 
19. BHR 4. Improve Public Relations and Reputation/Employer Brand As I mentioned before, the lack of compliance can damage your brand’s reputation among both candidates and customers. However, the opposite is also true: Candidates: 92% would consider leaving their current jobs if offered another role with a company that had an excellent corporate reputation. (Corporate Responsibility Magazine, September 2015) Customers: 27% of respondents said they have started purchasing or supporting a brand specifically because of its socially responsible practices or ethics. And that doesn’t just mean your outward brand mission--that means your internal employer practices as well.
20. BL Focus on DOs not DON’Ts How do we do that?
21. BL To achieve a positive company culture, you need to be well, positive. We know that happy employees make better workers and increase company profits. So, building a culture where the positives are in the spotlight instead of the negatives can create a winning culture. This positive mindset must start with leadership and trickle down throughout the organization.   A great example of leadership that encourages a positive company culture is when Madalyn Parker sent an email to her team explaining that she was taking a few days off for her mental health. Madalyn’s bravery is one to admire, but what made this conversation go viral was the empathetic response from her CEO.  The response read, ““You are an example to us all, and help cut through the stigma so we can all bring our whole selves to work.” This dialogue racked up 30,000 likes on Twitter and 8,400 retweets. https://www.hrdive.com/news/mental-health-and-the-workplace-how-employers-can-help/515080/    One aspect of a strong positive company culture is recognition. Employees want to hear that they are doing a good job, instead of everything that they are doing wrong - according to the 2016 Trends in Global Employee Engagement report from Aon. That’s why the annual review is being replaced with more frequent pulse surveys, and performance conversations are occurring more frequently as well. Leaders carry the important role to recognize the success of employees. This creates an environment where everyone can succeed. Next, we are going to discuss areas of compliance that we can use to build our positive culture. 
22. BHR
23. BHR Herzberg’s Hygiene & Motivation -when you take care of hygiene factors (compliance), you can focus more on motivation factors 
24. BHR Compensation may vary based on: Region Position Experience level Contribution Compare your org to others in your area. Where does your compensation land? Lag Dangers of lagging behind- employee dissatisfaction, turnover Lead Dangers of leading- setting false expectations, attract comp-driven employees only Match = best practice Constantly reevaluate comp scale & individual employees (contribution, skill set, experience level, etc.)
25. BHR Above all: transparency with compensation Train managers how to talk about compensation Explain comp model Fluid model- shifts along with the market
26. BHR Example: NYC Fair Work Week •Package of 5 different laws covering fast food and retail establishments –Int. Nos. 1384, 1387, 1388, 1395, and 1396 •Passed:    May 30, 2017 •In effect:  November 26, 2017 •Stated purpose –To protect workers by ensuring predictable schedules and paychecks; –To allow flexibility with other employment and child / elder care, etc.
27. BHR Once again, don’t have to wait for govt. regulation to do the right thing. One of Bamboo’s values = Enjoy Quality of Life Break barrier between work and life; life is life Work hard 8 hours then go home to enjoy life Libby: Commentary on BizLibrary’s values According to Gallup, 53% of employees say a that greater work-life balance and better personal well-being is "very important" to them when considering a job.
28. BHR This can be an important differentiator in today’s competitive job market and can be a boon for your organization: Gallup: 51% of employees say they would switch to a job that allows them flextime, and 37% would switch to a job that allows them to work off-site at least part of the time. Global Workplace Analytics: 40% more of employers in the U.S. offer flexible or remote work options today than they did five years ago. Stanford University: study among call center employees at a Chinese travel company called Ctrip. For nine months, half of the employees (who volunteered themselves) were allowed to work from home. At the end of the trial period, they found a 13% increase in productivity and a 50% decrease in turnover within the group that worked from home. Transition: Another area of compliance is technology…
29. BL Area of Compliance: Technology Social media (distraction that now is becoming an influencer) “Social Media –by 2020, 46% of the workforce will be made up of Millennials” - Millennials get most of their news from social media. They start to become part of the driving force of the movements that they see because of the influence on social. - It is important for employers know how societal movements can affect organizations. Social media is an opportunity to let your positive company culture shine. Because of the influence of social media on the millennial and younger generations, companies that don’t stand for something run the risk of being out of touch with society. Now, this doesn’t mean you need to take a stance on everything, just things that you as a company truly believe in.
30. BL Area of Compliance: Technology Employer Brand And that ties right into the employer brand. The employer brand is made up of many pieces. Compliance can influence three pieces, the brand’s mission, vision and values. Each piece must emulate the company culture. If compliance is stressed in the mission, vision and values then it should be easier to uphold. One of BizLibrary’s values is “respect others.” This may seem simple, but respect can be given and received in multiple ways. Accepting difference of opinions is an excellent way to show respect. When employees show respect to each other on all levels, it allows more innovation and creative ideas to happen, which gives the company a high competitive advantage. Transition (Cassie): Speaking of employer brand, hiring is an area where compliance is very important.
31. BHR We do not consider: Race/Ethnicity National Origin Gender Marital Status Disability Details Medical Details/Problems Religion Age (40+ years) Focus your questions on the job responsibilities and requirements outlinedin the job description Carefully craft questions that assess culture fit to ensure they won’t be Misinterpreted: Example: “How do you spend your time on the weekends?” Right way: “Tell me about a skill you’re developing during your freetime.”
32. BHR When you train hiring managers and recruiters properly, you can focus instead on attracting and hiring the right candidates to build your organization and enforce your positive culture. Diversity in hiring Diversity in both talent and thought Benefit = Mitigate risk to organization, create checks and balances Transition: Once people are in your organization, you can focus on safety. But when you talk about compliance in relation to safety, it isn’t always just talking about the traditional sense of safety.
33. BL Areas of Compliance: Safety in the workplace Cultural events like the #MeToo movement have created more conversation about workplace safety in recent months. If your company incorporates compliance into company culture, it creates a culture that wants to provide safety for the entire organization. Safety can be achieved in various ways. Forbes interviewed 7 HR pros and they provided steps to create a safe workplace for all. Here are the steps they talked about: Scan your environment and take action. First you need to be aware of what is going on in the company. If decisive action is needed to maintain safety, take that action. 2. Talk about acceptable and unacceptable behavior. Make sure everyone knows of what behaviors will not be tolerated, or even better talk about what is expected of employees. 3.Have leaders set standards. If your leaders are not behaving properly, other employees will follow suit. Building the company culture starts with the top leaders. 4. Encourage employees to speak up. When employees feel like they can trust other employees or leaders, they are more likely to let them know if something is going wrong. Encourage employees to participate, not just when something is wrong, but also to share good things. Have a monitored chat system like Slack where employees can not only discuss work, but also more personal stories that connect them to other employees. 5. Maintain a culture of respect. The culture of respect should be conveyed on day one with HR compliance training during onboarding. Respect can only be maintained if HR is able to take action when respect is violated.   6. Monitor but remain compliant. Company leaders should have a way to monitor employees while still remaining compliant. This includes surveillance in common areas, and access to emails, chats and company equipment. The company needs to release a policy and let employees know about the monitoring. 7. Walk around and listen. And lastly, we need to get out and listen. Consistent visibility from HR and management will go a long way in ensuring safety. https://www.forbes.com/sites/forbeshumanresourcescouncil/2018/01/05/effective-ways-to-ensure-your-business-is-safe-from-workplace-harassment/#5de72d4c5708 Transition: What’s next? 
34. BHR Compliance is always evolving and new situations arise daily. Just a few examples: Compensation strategy Hiring best practices Respect in the workplace Data security Social media According to an XpertHR survey: 42% of respondents stated that ensuring handbooks are read or understood by employees is very orextremely challenging 41% found that keeping current with new laws and trends was very or extremely challenging One respondent said that “keeping our employee handbook up to date is becoming harder and harder with new laws changing so fast.” Compliance CAN’T be a one-and-done process. Constantly reevaluate your organization, your strategy, and manager/employee training. Must be ongoing AND interactive (handbooks alone may not cut it).