The manufacturing industry in India is an integral part of its economy. According to the World Bank’s statistics, manufacturing was responsible for 13.72% of India’s GDP in 2019. Given that manufacturing is responsible for a substantial chunk of India’s GDP, development in this sector becomes essential. Manufacturing industries involve a lot of human resources and potential in the form of its many labourers, employees, and workers. Therefore, it becomes essential for organizations in the manufacturing sector to protect the interests of their workforce. Statutory compliance in HR becomes essential.

Statutory Compliance: Statutory compliance refers to practices of a company to stay compliant with laws passed with a local, state, or central government. The practices taken up by employees and the management of those practices by higher-ups are called statutory compliance management.

Functions of HR in the Manufacturing Industry

HR has various roles and functions within the manufacturing sector. They include functions such as:

• Ensuring that fair wage standards and provisions of social security of workers and employees are met.
• Enhancing the status of the workers and labourers within the industry.
• Adequately enforcing legislation and regulations.
• Recognizing the rights of workers.
• Promoting industrial peace.

Compliance Strategies

HR departments in manufacturing sectors face challenges in the implementation of initiatives that ensure statutory compliance in HR. However, certain practices can help organizations in the manufacturing sector effectively stay compliant.

Effective Leadership: Compliance in any form is highly reliant on effective leadership. Any compliance-driven initiative requires strong leadership to communicate effective compliance practices and initiatives to employees and workers. Corporate governance can help in directing the organization’s efforts towards better compliance.

Compliance Risk Management: Compliance risk or integrity risk occurs when an organization is at risk of being penalized for not staying compliant. Compliance risk management is the practice of identifying gaps in compliance and potential risks and taking measures to prevent them.

Training and Development: Organizations can invest in effective employee training practices to communicate corporate policies and appropriate behaviors and practices. Training should be an ongoing process with regular employee reviews and assessments. While the investment may seem unjustified, it does pay off in the long run. Organizations have taken to implementing these compliance strategies as growth strategies.

Rewarding Ethical Behaviour: Incorporating rewards into performance reviews might galvanize employees to continue certain desirable behaviors and practices. Tying the idea of statutory compliance in HR to compensation will ensure that employees are much more likely to learn, adhere to, and incorporate desirable policies and practices into everyday practices.

Policy Management Software:  An effective solution for improving compliance management in the manufacturing industry is implementing secure policy management software. This handles all of the various aspects of regulatory processes, such as managing forms, policies, contracts, and reports. It can also take automating key tasks, reminders, tracking incidents, and reporting compliance violations. It can also help in the effective analysis and reporting, which can immensely help manufacturing industries identify gaps and flaws and eradicate them.

Streamlining for Smaller Businesses:  Smaller organizations tend to have fewer personnel involved in data management. This also makes their work easier as they have a lesser amount of employee data to work with. This, in turn, simplifies the practice of staying compliant. Smaller manufacturing organizations can effectively streamline their activities to stay compliant. As mentioned earlier, using compliance as a growth strategy can work wonders for smaller organizations. These organizations will have a better public profile and ethical business practices, making it easier for other organizations and clients to choose to work with them.