For many reasons, complying with regulations is essential in any business. If you want to distinguish yours as a business that has the best interests of staff, customers and the public at heart, then you’re already well aware that flouting regulations means you risk losing more than just your reputation.
To anyone who runs a small business, it might seem obvious that you should meet your legal obligations. But there’s a difference between meeting the minimum legal requirements and understanding the reasons for the rules and regulations that govern your business and the benefits that those regulatory laws may bring you, your customers and your staff.
We give you the lowdown on regulatory compliance and why it’s important for small businesses.
The word ‘compliance’ basically means conforming to a rule, set of specifications, a policy, standard or law. Businesses, organisations and industries have to adhere to ‘regulatory compliance’, which describes their commitment to supporting industry-specific regulations.
As regulations increase, so does the need for operational transparency, therefore many organisations work to consolidate sets of compliance controls so that all requirements can be met without the unnecessary duplication of their efforts, which can come at the cost of time and personnel resources.
The UK has developed business regulation across industries, some of which comes from EU legislation. Many of these regulations are overseen by bodies such as the Environment Agency or the Financial Conduct Authority, for example.
Alongside business regulation bodies there are acts that require all organisations, irrespective of size, to ‘comply’ with them. Well-known examples are the Data Protection Act 1998 and, for the public sector, the Freedom of Information Act 2000.
‘Compliance’ to regulation is about businesses meeting their legal obligations, most commonly to protect the welfare, health and safety of its workers. The most obvious everyday example of compliance might be paying your taxes. As soon as you hire staff your understanding of compliance must extend to processes such as hiring and firing, issues relating to harassment and safety, payroll, benefits and salary. There are particular industries for which regulatory compliance goes beyond HR, for example, meeting health and food safety guidelines if you run a restaurant.
There are a great many benefits to businesses that adhere to regulatory and compliance requirements, and here are a few of them.
Regulations are there to protect staff. A happy, well-supported workforce that’s working safely in a supportive environment is more likely to want to stay with your company or organisation. Every employee should have a handbook that outlines the company’s policies towards areas like discrimination, which should be a reflection of your own legal compliance obligations. If staff are aware of the climate in which they are working, and have adequate help in supporting those policies, then this can help to minimise staff turnover.
If you do things properly in your business you minimise the risk of penalties and fines, or worse, work stoppages and lawsuits, the impact of which can threaten the very survival of your business. At the very least fines can be costly, so it can be worth hiring a compliance professional or making use of compliance software to help you fully understand and apply your legal obligations.
Discrimination and harassment rules make working environments better and therefore more productive. Health and safety rules are there to prevent harm or injury to person or property and the subsequent harm to your business that can happen when things do go wrong.
It pays to make conspicuous the fact that you adhere to your legal obligations on your marketing materials and website. If you run a restaurant for example, you are obliged to make your food hygiene rating publically visible, which may inform a diner’s decision about whether to eat at your venue or not. If you are employing new staff then exhibiting the fact that you are an equal opportunities employer on job ads can be beneficial. Advertise your non-discriminatory attitudes in your literature and evidence how your values are supported by the necessary legal aspects.
Adhering to your legal responsibilities is essential, but looking after your business also means securing the right level of small business insurance. Contact us for a quote for the right level of cover today.