Regulatory change management and skills management are closely interconnected. To navigate the challenges posed by both, organizations must adjust their internal capabilities – including the skills of their workforce – in response to shifting regulatory requirements.
Here, we’ll take a look at the symbiotic relationship between regulatory change management and skills management – and how skills management strategies often align with regulatory change management solutions. Used effectively, both can help position your organization to act decisively, proactively, and effectively to ensure your employees stay compliant, safe, and productive.
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Adaptation to regulatory changes
When new regulations or amendments are introduced, organizations must adapt to remain compliant. Research from change management blog Walk Me, for example, shows that
Nearly 80% of businesses must alter or completely change the way their business operates “every two to five years” to meet changing regulatory or compliance standards.
These changes can encompass a wide range of industries and processes, including those related to manufacturing, finance, healthcare, and environmental standards. Adapting to them requires a skilled workforce that can swiftly comprehend and apply new regulations, rules, or requirements.
Here, effective skills management can help organizations facing regulatory changes by:
- Identifying skills gaps related to new regulations or standards
- Providing training to close them
- Ensuring employee possess the certifications they need to stay compliant with new regulations
Skills and competence requirements
Regulatory change often necessitates adjustments in an organization’s operations and processes.
To meet these new requirements, employees may need to:
- Acquire new skills or certifications
- Enhance or renew existing ones
- Implement processes that adhere to new standards or regulations
In the manufacturing industry, for instance, regulatory changes may require employees to implement new quality control protocols or production safety measures. This can be an expensive endeavor, with the National Association of Manufacturers reporting that US-based businesses “pay $19,564 per employee on average to comply with [changing] federal regulations.”
Skills management, however, can help mitigate such costs by enabling business leaders or managers to proactively facilitate the development of the necessary skills by way of training programs, certification renewals, or upskilling initiatives.
Training and development
Skills management involves identifying the skills needed for specific roles within an organization, assessing the current skill levels of employees, then developing strategies to bridge any gaps.
When regulatory changes occur, these training and development programs may be necessary to ensure that employees have the knowledge and abilities required to comply with the new regulations.
These programs might include:
- Compliance training
- Skill-building activities such as workshops or conferences
- Certification programs
By using your skills management strategy to identify the skills or certifications your employees will need to update or acquire, you can better ensure that your organization is able to react quickly to new regulations. Companies capable of such agile reactions, according to Gallup, “show vastly better financial performance than companies that incorporate limited agile principles.”
Research from Deloitte shows that 36% of organizations name risk stemming from regulatory or compliance change to be “among the top three risk types that would increase in importance over the next two years.”
This isn’t surprising; failure to comply with regulatory changes can result in legal and financial consequences that can delay or halt business operations – or result in unsafe working environments, especially for deskless workers.
Skills management can help mitigate these risks by ensuring that employees possess the skills and knowledge needed to understand and adhere to new regulations, resulting in:
- A decrease in the likelihood of compliance breaches
- A decreased risk of costly penalties that can delay or halt operations
- Improved levels of workplace safety
Continuous monitoring and improvement
Both regulatory change management and skills management are ongoing processes.
Regulatory changes can be frequent, so organizations must continually monitor for updates and react accordingly. Effective skills management, meanwhile, requires constant effort to keep employees up to date with changing skill requirements.
Operating a business under a culture of continuous improvement is essential here – and is also key to business growth, with EY reporting that leaders must “understand that every aspect of their business must hold up to scrutiny and be constantly improved to stay ahead of the pack.”
Skills management and regulatory change management processes intersect when organizations refine and improve operations in response to evolving regulatory landscapes, allowing them to:
- Ensure compliance with new regulations through skill alignment and employee training
- Streamlines operations, reducing errors and delays – thus enhancing efficiency
- Fosters innovation and adaptability in response to evolving regulatory landscapes
AG5 and regulatory change management
AG5 places skills management and regulatory change management at the heart of your organization, providing you with the real-time data and analytics you need to effectively and efficiently track skills, develop training plans, and manage certifications and qualifications that your employees need to stay productive and adhere to always-evolving regulatory changes.
Want to learn more? Schedule a free, live, 15-minute demo today to see how AG5’s skills management software holds the potential to transform the way your business operates.