How Compliance in Business Guarantees Profitability as Compared to Non-Compliance

Compliance in business image

In a business sense, the term ‘compliance’ is the practice of a business meeting its commitments and obligations. Both moral and legally. To deem a business as compliant, it has to operate in a way that does not contravene the law. The business must follow strict guidelines and procedures. Compliance can take the form of a business obtaining a business license. It can be paying its taxes, observing safety precautions in its operations as well as paying wages or salaries to the employees.

Non-compliance however, is the failure to follow such regulations or guidelines. Moreover a code of conduct required as a bare minimum in a business organisation. Non-compliance can do more harm than good in any business entity, and the consequences of either come with much impact. When put on a weighing scale, though, compliant businesses emerge as being more profitable than non-compliant ones. The following breakdown illustrates this notion:

Reduced Legal Exposure and Risks

Combatively, this is the primary purpose of compliance. Enforcing corporate compliance is key in safeguarding internal policies and procedures. It helps in detecting and protecting against violations of rules and legislation. To a business, this is profitable as it cuts on costs of lawsuits, stoppages, fines and penalties associated with non-compliance.

Efficient Business Operations

Having a compliance program helps in curtailing internal conflicts noticeable under non-compliance. This leads to easier internal auditing, proper management, monitoring and coordination of employees. Operational standards improve, all of which help a business attain its core values, mission, and vision in its quest to make a profit.

Improved Safety Performance

A compliant business will observe rules and regulations regarding the safety and security of its staff. Management, employees and indeed clients all fall under compliance. Consequently, fewer injuries and related risks will affect worker productivity. Even where absenteeism is not checked, thus hurting business profitability.

Improved Public Relations

A business that is compliant on matters such as merit-based employment, non-discrimination and commitment to observing rules of consumer protection, casts a positive public image to the outside world. This image may help build public trust and its service delivery as a brand. This in the long run, leads to increased net sales.

Higher Employee and Customer Retention Rate

A business organisation that complies with the safety and well-being of their employees will have a higher chance of retaining them. Since they will feel that their welfare is protected, when compared to those in organizations not keen on compliance. Of course, this boosts their morale to perform better and their retention translates to gaining experience over time. The results improve productivity thus more profit. Not to mention, when a business places customer centricity at its heart in its pursuit of profits and complies with consumer protection regulations, customers feel secure and confident transacting with such an organization from time to time. The business gets to advertise itself in the process, ensuring a steady customer base.

Key Takeaway

Company programs that consistently and accurately keep compliance policies in check, record a high success rate in protecting their organisation. That itself ensures the smooth running of the business. Points of discussion critical to compliance are the compliance officers. The best compliant people in business are the business champions!

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