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Compliance Conundrum: Complexity Increasing, Budgets Not Keeping Pace [Infographic]

Last week, we introduced the first in a series of posts about the compliance conundrum – the compliance-related challenges that CFOs, human resources and finance executives operating in today’s business landscape face. Today, we’ll take a closer look at an issue cited as a top challenge: the tension between increasing complexity and shrinking budgets.

According to a recent survey conducted by CFO Research, in collaboration with ADP, more than 80 percent of senior finance executives say monitoring employment-related tax, HR and payment rule changes has become more time-consuming over the past two years*. The survey also shows that for most, this trend isn’t slowing down anytime soon. In fact, 73 percent surveyed expect increasing compliance complexity to consume additional resources over the next two years*.

Adding to that pressure, budgets are not keeping pace with increased complexity and new compliance requirements. Nearly 60 percent of finance executives surveyed say the compliance budget at their company will either remain the same or decrease over the next year*.

But not all compliance news is bad. With the right strategies, CFOs, human resources and finance executives can enable their organizations to better maintain compliance and mitigate risk, improve business process efficiencies and drive organizational growth.

Essential to accomplishing these goals is a proactive approach to compliance. Currently, more than one-third of finance executives surveyed say their company’s approach to compliance is more reactive then proactive. Yet, 43 percent agree their company would realize measurable benefits if it took a more proactive approach*.

A proactive approach enables companies to better anticipate compliance changes, respond to and implement required changes faster and with greater efficiency, and streamline processes and staff time for employment-related compliance management.

A more proactive approach can also help companies avoid penalties incurred for non-compliance. According to research from CFO Research and ADP, approximately 60 percent of the companies surveyed incur employment-related compliance penalties with some regularity*. While this is often considered a regular cost of doing business, a more proactive approach can help reduce or eliminate these occurrences. For most companies, these savings, coupled with increased efficiencies, can lead to new opportunities to drive grow and ROI for the enterprise as a whole.

Learn more about how ADP SmartCompliance can help companies ease the burden of compliance management, improve business process efficiencies and drive organizational growth.

* Managing Compliance in a Changing Environment, CFO Research, in collaboration with ADP, January 2013

ADP SmartCompliance is a service mark of ADP, Inc.



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