Businesses with a strong employment-related tax and payment compliance program report greater profitability and employee satisfaction, according to a new survey.
The survey, by payroll giant ADP and CFO Research, found that prioritizing compliance can help lead to a more engaged workforce, improved corporate culture and a sharper competitive edge.
Survey respondents said the need to conform to multiple jurisdictions (70 percent) and ensure privacy and data security (49 percent) increase the difficulty of managing employment-related tax and payment compliance. Due to these challenges, some managers do not make compliance management a priority. Of the senior finance and HR executives surveyed, more than 33 percent considered compliance to be a low priority, while 33 percent of respondents said they would give their company a “C” grade for the way compliance is handled within their organization.
“Our data shows that compliance is growing in its importance to successful companies of all sizes,” said ADP president of global enterprise solutions Mark Benjamin in a statement. “Unfortunately, some companies are so overwhelmed by the complexity involved in managing employment-related tax and payment compliance that they don’t know where to begin. The good news is that many organizations that are investing in a compliance program and making it a priority are seeing significant, and sometimes unexpected, payoffs for their businesses.”
The survey indicated that companies that invest in robust compliance management acknowledge it can deliver business results. Fifty-nine percent of the survey respondents said employment-related tax and payment compliance has a positive impact on employee productivity and operational efficiency, while 50 percent say it has a positive impact on their company’s overall profitability.
Respondents also noted how employment-related tax and payment compliance may help lead to surprising payoffs they didn’t expect, such as a boost in employee satisfaction (70 percent) and employee engagement (63 percent), as well as improved corporate brand and reputation (55 percent). Leadership teams are recognizing how these improvements can help strengthen their businesses and enable them to better respond to future regulatory changes.
Of the companies that responded to the survey, 63 percent viewed investing in compliance as a best practice rather than a burden.