Companies and their auditors are continually faced with the need to adapt to new regulations and maintain compliance with existing mandates, such as the Sarbanes-Oxley Act. Despite the challenges of staying on top of the ever-changing regulatory environment, many companies seem to think they’re doing a pretty good job in this area.
Consider the results of a recent Robert Half survey of CFOs. The majority of those interviewed rated their team’s regulatory compliance knowledge as excellent (45 percent) or good (48 percent). That’s an overwhelming 93 percent who seem reasonably satisfied with their internal response to regulatory demands. Given the compliance-related hurdles of recent years — and the inevitable learning curve that accompanies them — this percentage may seem surprisingly high.
At least until you consider the alternative. Not rising to the challenge of compliance is really not an option. The risks of noncompliance are too serious not to have regulatory experts on board. Firms that fall behind in their compliance efforts could be at a competitive disadvantage and face fines and other penalties, including reputational damage.
Although CFOs seem satisfied with the regulatory expertise of their teams, the compliance bar is continually being raised, and the recruitment battle for professionals with regulatory expertise is intensifying. The talent crunch is already being felt globally, according to the Robert Half Financial Services Global Report: Navigating Change in an Evolving Regulatory Landscape. A majority (89 percent) of financial services executives surveyed said finding the right people to help address new regulatory concerns continues to be a key challenge.
The financial services industry, in particular, faces some of the most stringent requirements. The ongoing implementation of directives such as the Dodd-Frank Act, Basel III, the Bank Secrecy Act and anti-money laundering (AML) requirements is fueling demand for professionals who can ensure compliance with these regulations, according to Robert Half’s 2014 Salary Guide.
Compliance-related challenges are not limited to financial services firms, however.
One way businesses have traditionally responded to increased compliance demands is to increase their reliance on financial consultants. Many companies find that interim professionals offer the best way to address added demands because of both the specialized expertise they provide and the need to manage heavy but short-term workloads. Consultants can also deliver benefits by transferring their knowledge to existing staff members.
Even if companies seem satisfied with the current compliance knowledge of their financial teams, they should avoid being lulled into a false sense of security, thinking catching up to existing mandates is enough.
With shortages already existing for risk and compliance professionals and regulatory requirements showing no signs of receding, business leaders should plan ahead when it comes to staffing and training to meet new and ongoing mandates. Offering your staff access to industry seminars and continuing professional education courses and bringing in consultants with specialized expertise are all ways to stay ahead of the compliance curve.