The Regulatory Burdens Crushing Companies’ Bottom Lines
This article is a part of a series based on our Annual Strategic Report, The Future Is Gig. Download the report here.
The regulatory landscape surrounding hiring practices has significantly impacted the recruitment process. In 2024, laws and regulations related to jobs and work are still changing and developing globally, emphasizing fair practices, data privacy, and anti-discrimination measures.
Compliance with recruitment regulations is crucial for businesses to operate ethically and legally, with specific laws varying by country and state. In the United States, the Equal Employment Opportunity Commission (EEOC) and the Office of Federal Contract Compliance Programs (OFCCP) are the main governing bodies regulating recruitment compliance.
Increasing Financial Burden
These regulations aim to ensure fair and nondiscriminatory hiring practices, as well as the protection of workers’ rights. But the resultant financial burden that rests on the companies is unsustainable and has led to an imbalance in the employee/employer relationship.
The stringent regulatory environment has led to extraordinary hiring practices, such as a high number of rounds of interviews, to ensure compliance with the law and minimize legal risks.
Companies need to be cautious and ensure adherence to the latest norms and regulations to avoid lawsuits, large fines, and damage to their brand, as well as to safeguard against potential mismatches. As a result, the onboarding costs and severance pay associated with hiring have increased, contributing to the overall complexity and expense of the recruitment process.
The need for compliance with employment laws and regulations has resulted in a more intricate and prolonged hiring process, often involving 9 or 10 rounds of interviews, even for highly qualified candidates. This is a direct consequence of the regulatory system’s emphasis on protecting workers and ensuring fair and ethical hiring practices.
As a result, businesses are navigating the complexities of recruitment compliance to attract top talent while mitigating legal risks and upholding ethical standards.
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