In football, there are penalties for piling on: Once the ball carrier is down, other players can’t join in the tackle or hit the carrier with too much force.
There are no such prohibitions on labor regulations.
Already navigating their way through a heavily rule-laden industry, credit unions must also adhere to complex HR laws governing employee wages, benefits, and scheduling. Especially for financial institutions that rely on manual recordkeeping to track employees’ hours and duties, these regulations pose the potential for high-priced compliance headaches and may contribute to operational inefficiencies.
An effective route around those risks is to automate everyday processes and documentation related to staffing and scheduling. By deploying labor analytics, credit unions can head off HR regulatory challenges and uncover a wealth of data to steer workforce strategies.
A recent white paper from Kronos, “Solving the Workforce Compliance Challenge,” spells out the benefits of technology solutions in navigating away from compliance pitfalls and toward staff deployment that is simultaneously more cost effective and supportive of strategic initiatives.
Regulatory vigilance required
The Fair Labor Standards Act (FLSA) was signed into law 80 years ago to establish requirements for minimum wages and overtime. But continual updates through the decades—most recently widening the definition of employees covered by overtime regulations—makes compliance an ongoing struggle.
Two other federal laws, the Affordable Care Act and Family and Medical Leave Act, also set out strict requirements for accurate and consistent records of employee work schedules to determine which staff members must be offered healthcare and job-protected leave benefits. And if the fine print of those laws is not enough to keep HR administrators busy, state and local wage and workforce statutes may apply additional restrictions.
Oversight and enforcement of these regulations has increased in recent years, and the penalties imposed for violations can be stiff: The U.S. Department of Labor reports that 79 percent of its agency-initiated investigations in 2015 found wage violations. Over the following year, the DOL’s Wage and Hour Division, which oversees enforcement of FLSA regulations on minimum wage, overtime, recordkeeping and youth employment, identified $266 million in back wages due to more than 280,000 employees.
To comply with this maze of regulations, credit unions must maintain accurate and complete records of the hours their employees work, the duties they perform, and the wages they are paid. As the white paper notes, “error-prone manual processes increase the likelihood of inconsistencies that could lead to employee grievances.”
Beyond compliance to competitive advantage
In many financial institutions, the data on hours worked and duties performed comes from a myriad of sources—from different business units, managers, and back-office and branch locations. Some employees may work in multiple locations, such as mortgage or business loan officers who meet with borrowers in different branches and member service representatives whose assignments vary based on transaction volume and PTO schedules. Add to that complexity the need to track the work schedules of staff who meet with members in remote locations or represent their credit unions in the community in evening and weekend events.
Bringing this data together in labor analytic systems can reduce the burden for satisfying regulatory requirements and make the job of preparing for compliance audits much easier. On a broader scale, technology solutions can support strategic planning and implementation from the C-suite to frontline managers, offering valuable business intelligence to monitor operations, answer complex questions, predict outcomes, and test initiatives.
These capabilities provide a comprehensive view of how a credit union is deploying its human capital in support of strategic objectives. Labor analytics enable managers to make more informed decisions on where to make adjustments to improve performance and provide a common and repeatable method of communication between layers of management, across departments, and throughout the branch network.
For example, if one branch develops an efficient staff scheduling model that delivers timely member service and exceeds sales goals, other offices can identify and emulate those effective labor deployment practices, make course corrections more nimbly, and measure their progress toward achieving similar results.
Automating workforce data collection can help widen the view of employees across the organization. As the white paper notes, HR leaders can turn their attention to improving employee engagement and retention and “take on a more strategic leadership role in driving achievement of key corporate goals through workforce optimization.” And managers can collect more information about staff deployment without burdening their employees with manual recordkeeping duties so they can focus instead on doing their jobs—delivering value to members.
In short, a modern workforce management system can help minimize compliance risk through automation, centralization, and consistency and achieve goals that may seem to be at cross-purposes—increasing member service levels, enhancing employee engagement, reducing labor costs, and ultimately enhancing revenue production.