The Tech Industry – 5 Toughest Compliance Challenges for Human Resources

There’s no doubt that tech plays a huge role in our economy. According to recent statistics, the tech industry contributes between 9 and 10% of the U.S. annual GDP. Companies vary in size from massive organizations, like Google, to tiny startups run by just a handful of people. However, each company faces its challenges, particularly in human resources.

Unlike many traditional companies, tech companies are known for providing their employees with extensive remote work opportunities. They’re also primarily dominated by men, which can result in its own set of issues. 

Here is a list of five challenges that tech companies typically face and how HR teams can overcome them.

1. Supporting Remote Work

Managing a remote team isn’t easy, especially when employees are scattered around the country (or the world). Hiring across state lines or internationally can be beneficial to forward-thinking tech companies that need talented people who may not be available in their local areas. Still, it comes with its disadvantages, too.

One of the biggest problems with remote workers who live in widespread areas is time differences. If you have team members in India, Europe, and the U.S., connecting with them during working hours can be challenging. 

Another concern is legal compliance. Hiring in different states or countries can lead to potential issues, especially if companies don’t understand local regulations.

To avoid the repercussions of a poorly constructed remote work policy, it is important to hire experienced human resource professionals. These professionals will understand the implications of remote work and how to structure it so that it does not lead to unanticipated issues. They can also help to ensure that your company is compliant with all relevant regulations.

In addition to hiring experienced HR professionals, you may also want to consider using compliance software to streamline the regulation process for remote workers. This type of software can automate tasks, track compliance, and provide insights into compliance risks.

2. Keeping Data Secure

Data security is increasingly becoming more of a concern — especially among companies that use multiple software vendors to run their operations or have employees working from home. In 2022 alone, 1,802 data compromises impacted over 422 million people in the U.S. 

Companies bear the responsibility of protecting their customer’s data. They also need to look after their own sensitive information to ensure it doesn’t end up in the hands of someone nefarious.

While HR professionals usually aren’t tech wizards, they can partner with their IT teams to ensure employee data is secure. Choosing a robust ERP or HRM system that provides support while also paying attention to necessary data security protocols can go a long way in preventing disastrous data breaches.

3. Addressing Harassment in the Workplace

 Often, at tech companies, there’s usually a lack of diversity, particularly gender diversity, that  can lead to sexual harassment and discrimination issues if the organization doesn’t take proactive action to prevent them. 

It’s critical to maintain diversity across the organization. Human resources should always implement harassment training and policies so everyone understands how the company handles complaints. It is crucial to maintain a private communication line where employees can report any issues they encounter without fear of retribution.

Human resources should handle all complaints immediately through a structured investigation process. This way, leaders can dedicate the proper attention to the complaint and resolve it before it becomes a legal problem.

4. Focusing on Diversity and Inclusiveness

There’s been a strong movement toward diversity in the workplace over the past few years. The 2020 protests and race riots inspired organizations to implement new policies encouraging applicants from diverse backgrounds to apply for open positions. 

Many companies offer people from diverse backgrounds certain benefits, like access to mentorship programs within their organizations. 

However, tech businesses are lagging a bit behind. Much of the reason is simply due to their need for specialized talent, which is hard to find. Many tech positions remain unfilled because there aren’t enough qualified candidates.

Tech organizations can incorporate diversity practices into their hiring policies and emphasize them in their other workplace activities. 

Companies that do so tend to see other benefits besides simple legal compliance. They also see fewer lawsuits and complaints, a more cohesive workforce, stronger engagement among colleagues, and higher productivity. 

Diversity and inclusion fosters creativity and innovation, which is crucial for a tech company seeking to maintain its foothold in an ever-evolving industry.

5. Maintaining Compliance with Local and National Labor Laws

Laws governing employers and the workplace are numerous. In the U.S. alone, there are more than 4,300 employment laws. It’s challenging to stay abreast of current regulations, especially with a small HR team of one or two people.

While employers can lean on legal counsel for assistance, they’ll pay a stiff price. An external lawyer typically bills by the hour; simple advice may cost hundreds of dollars. Hiring an internal counsel can cut costs and ensure you always have someone to turn to, but other departments will likely need their assistance, too. For smaller companies, hiring legal counsel internally isn’t practical. 

Small tech companies can benefit from partnering with an outsourced human resource provider with expertise in the legal regulations in the areas where the company has workers. 

They can also consider integrating an in-house software solution like VirgilHR, which offers real-time compliance assistance to ensure your company remains current on employment regulations. 

Companies Can Benefit from an HR Team that Understands the Intricacies of the Tech Industry

While tech companies share some similarities with their traditional counterparts, there are also many differences. Ensuring your human resources team has the knowledge to deal with those characteristics is paramount. 

With the right tools, you can protect your tech company from lawsuits and ensure that everyone has a safe and secure working experience.