Written by Jonathan Dempsey, MBA on Monday March 22, 2021
‘When I grow up I want to be…’ is a phrase many will probably remember from their childhood.
It was a time when jobs were anticipated as a ‘jobs for life’, perhaps following a family tradition. A successful career meant promotion within the same company or, at the very least, the same industry.
In the wider society, information was consumed through newspapers, magazines or the nightly television news bulletin. In business, there was comfort in the status quo, with established firms operating with relatively stable macroeconomics and a strong representation of the workforce by unions. The threat of new market entrants was often minimal. Innovation was a luxury confined to the R&D functions where research and design could help drive a competitive edge. Profit was the goal.
Compliance with laws, standards and rules ensured that core transactions within an organisation were kept under control (the ‘licence to operate’). There was clarity on roles and responsibilities between employers and employees, and regulators were highly visible, the desired equilibrium being to stay safe and legal whilst achieving strategic goals.
Many of these certainties have now vanished, and in a rapidly changing digital world, thinking around compliance needs reframing. The question today is whether compliance can keep up in world moving faster than any had thought possible.
The speed of change in the workplace truly began to achieve peak velocity in the second half of the last decade. By the end of 2019, decline of industrialisation towards a service-based economy had already seen the rise of the ‘gig economy’. And a career began to look very different.
In the UK, zero-hours contracts became widespread in the hospitality sector, increasing operational flexibility but eroding security of income. More people became self-employed, taking up final-mile delivery driver roles for e-commerce leaders; Uber drivers took market share from taxi companies and deliveries of fast food via app-based orders exploded in popularity. The new motto was ‘work when and where you need to’ – but with a lingering concern over whether this was flexibility or exploitation.
Regulation of these activities has struggled to keep pace. Lines have become blurred between employer responsibilities and the rights of individuals. Whether health and safety, the Working Time Directive, data protection, insurance, taxes or other areas of regular ‘compliance’ activity, new grey areas of risk and opportunities have arisen.
Many traditional jobs have gone forever and new ones, requiring different skills and technologies, are quickly being created. Consider, for example, the drone pilot in an automated warehouse who removes the need for engineers to climb 25 metres up racking to check for faulty sensors. Automation will also continue to remove many of the routine administrative and manual roles, for instance automatic cone-laying machines on motorways.
These evolutions were further accelerated by the emergence of COVID-19. The global pandemic of 2020 forced rapid digitisation across the world, making technophobia no longer an option. The overnight switch to home working necessitated business meetings held over Zoom, Microsoft Teams or Google Hangout. But how robust were IT user policies and infrastructure to mitigate against such massive potential for cybercrimes, including FinTech?
Lockdowns have taken away face-to-face contact with friends and family, and the ‘online world’ has become the only place for ‘human connection’. What standards govern responsibilities of employers and employees for mental health and the long-term risks of working from a home office (which could be a sofa or dining table)?
In addition, fragmentation of the global economy has set a precedent for levels of uncertainty and increased pressure to ‘cut corners’. Laws, standards and ‘rules of the game’ may not be established at sufficient pace to keep up. If ‘compliance’ activity was considered a cost, even a bureaucracy, before, is there a danger that the perception of compliance is likely to deteriorate further? If so, how can it be rescued and recognised as an enabler?
Moreover, what does this change mean for employment opportunities? With some national education systems having effectively been paused for a whole academic year, how will a skills gap manifest itself in the years to come? The GenZ demographic (born 1996–2010) will require their preferred employers to be purpose-driven, demonstrating an embodiment of their core values. Yet GenZ employees are also more entrepreneurial and many have side hustles where they sell on Instagram. Whereas larger businesses previously off-shored call centres to Asia for cheaper labour, now small businesses and solopreneurs can quickly scale by outsourcing a virtual assistant to the Philippines, social media marketing to Africa and so on – all financed through FinTech solutions.
After undergoing the dizzying changes of the last decade or so, can compliance afford to stay the same?
No, of course not. Like everything else buffeted by the great waves of technological change, it must evolve and adapt. To do this, it needs first to assess its objectives and that which stands in their way. It needs to scan the horizon for those things that can interrupt or damage their achievement. And most crucially of all, it then needs to formulate a plan that can set out how to achieve a firm’s goals and contingency plans for potential disruption.
This means that those now working in compliance have been handed a double-edged sword. Never has their contribution been more vital to the success of the business, nor their responsibilities so diffuse. And yet the weight of expectation can be more cumbersome than tolerable if the primary objectives of the compliance function are not set out clearly, avoiding the trap of compliance being seeing either as the business-denying function or as a panacea to all a company’s concerns.
Such views are increasingly rare. Compliance is now placed on a pedestal few would have envisaged a decade ago – indeed, this is a wonderful time to be working in compliance. Employees in the compliance function should relish the growing prestige of their profession, and exploit the growing respectability afforded to their role. To maintain this, and to keep up with endless technological development, compliance staff must remain informed, engaged and up to date.
That is the key message to remember when considering the change seen over the last ten years. If it is to continue – which in all likelihood, it will – then those in the compliance function need access to the latest knowledge and information, to be aware of the latest trends in their field and to keep an eye out for pending developments. Doing so will ensure compliance remains effective in the uncertain years ahead.
ICA Certificate in Compliance is an introductory-level course that will give you a solid understanding of core compliance issues. Find out more about the course here.
Jonathan Dempsey, MBA, is the Director of Red Laces, a management consultancy unravelling the mystery and requirements of risk, safety and compliance to empower business leaders towards success. Jonathan is a member of the ICA Panel, a body of leading industry thought-leaders and subject matter experts who meet ICA’s high standards for excellence in knowledge delivery and who work in partnership with the ICA to support and empower our community.
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