How Regulatory Requirements Shape Daily Operations
Organizations that operate in regulated environments soon discover that regulatory requirements do not only impact the occasional audit or annual review. These requirements shape how work gets done on a day-to-day basis. Workflows for staff have to accommodate documentation requirements. Decisions have to factor in compliance. Time allocation has to include regulatory deadlines in addition to operational deadlines. Having these requirements in the background shapes the entire operational environment in terms of what gets considered from recruitment through to technology used.
Some organization’s acclimatize to this type of operation with ease, incorporating compliance into their natural way of operating until they do not notice it any more. Others continuously struggle, seeing regulatory requirements as impediments to working around, rather than a reality that has to be factored into how the organization functions. The extent to which an organization can embrace these requirements, versus treating them as impediments, tells the story of how easy compliance can be.
The Documentation Reality
Most regulatory environments require extensive documentation of processes, decisions, and outcomes. Healthcare providers have to document the provision of care. Financial institutions must document transactions and client interactions. Educational institutions must document student progress and the delivery of their programs. Specifics may change, but the underlying principle is that if it was not documented, it did not happen.
The need to document everything has extensive implications on day-to-day operations. Tasks cannot just be completed but have to be recorded in ways that meet compliance regulations. Staff have to consider gathering evidence for the task done. A five-minute conversation can easily turn into ten minutes when documentation is required after the fact. The task completed only represents a portion of what has to be done.
It gets more complicated when documentation requirements change or new requirements are added. The organization has to adapt, and workflows have to be updated to ensure that the new information gets captured and that everything continues to be presented the way it should be. What may have settled into a routine workflow gets upended every time regulatory authorities change their expectations.
Planning and Preparation Overhead
Regulated environments often require additional planning for tasks to be completed. Healthcare institutions have documented planning for every procedure they perform. Construction industries have to apply for permits before they can commence working on anything. Training organizations must plan in detail before a single learner sees the inside of a classroom or workshop.
For training organizations operating in vocational education, the work that goes into planning compliant training and assessment strategies can be colossal before a single student even steps into a classroom. Organizations that use specialized RTO training plan software have an easier time of it thanks to templates and built-in compliance checks, but it still requires significant effort to ensure everything is compliant no matter what software is being used.
This requirement for elaborate and detailed planning puts an upper limit on how nimble and responsive an organization can be in regulated environments compared to others. A good idea cannot just be acted on. There are layers of documentation to complete, compliance checks to get through, and approvals that have to be obtained beforehand.
Audit Readiness as Ongoing Work
Organizations in regulated environments have continuously be ready for an audit rather than preparing for when audits are scheduled. This means that data has to be kept current, documentation needs to be continuously updated, and processes must always comply with what is being written about how things get done. The potential of an audit lurking around the corner means that organizations cannot fall behind on compliance.
Again, this constant vigilance has implications for how organizations use their resources. Staff have to spend time and effort ensuring that records are organized, documents are up-to-date, and processes all reflect what is being done by ensuring it is compliant with organizational requirements. Investments in technology will mainly go towards ensuring these tools can produce evidence needed for reports in audits rather than other operational needs. Management has to prioritize compliance concerns when allocating time during oversight or troubleshooting rather than reactive management.
Some organizations manage their audit readiness as constant lurking work that is completed while they carry out their operational commitments. Other organizations carve out specific times or assign specific staff members the task of maintaining audit readiness. Both require organizations to accept that a portion of its operational capacity gets diverted towards maintaining regulatory requirements rather than focusing solely on serving clients.
The Training and Competency Factor
Regulatory compliance requires staff to have an understanding of what is required and how to implement it. This creates ongoing training requirements instead of just basic training related to their operational roles. Employees also need induction training related to regulatory environments within which they operate. Existing employees need training every time there is a new change in requirements.
This relatively constant training intervention can require a considerable investment of resources by organizations in regulated environments rather than non-regulated ones. Time spent in training sessions adds up quickly without being able to attend other professional development initiatives focusing on non-compliance-related matters.
The competency-related issue brings with it another set of burdens. Numerous regulatory environments require organizations to demonstrate that their staff members are competent before they are allowed or able to perform their functions. This means that organizations must consider not only creating training sessions but also assessing competency and documenting it for everyone who works within them.
Technology Decisions Driven by Compliance
The requirement for compliance with certain regulations also drives technology use decisions made by organizations away from preferred options to those that meet compliance needs. Organizations have to invest in systems that can accommodate the necessary reporting and auditing requirements set out by regulators or governing authorities.
This means that it is far more challenging for some organizations operating in regulatory environments can freely choose the technology they want to use using intuitive or “user-friendly” technology because it meets their needs better than systems explicitly designed for their purposes operating in other environments. Organizations that have invested in specifically compliant systems sometimes feel locked into those technologies even when better options become available for use in non-regulated environments.
Living With Regulatory Reality
Organizations can create operational efficiency despite the challenges presented by working within a regulatory environment. They realize they must find a way to incorporate compliance into how work gets done and recognize the need to build infrastructure around their staff members related directly and solely to working around regulatory requirements rather than avoiding them as much as possible.
Incorporating compliance into non-work time may involve burdening operational staff with additional “homework” after meetings or keeping the odd hour here or there strictly reserved for compliance-based paperwork or training updates. However, it still needs viewing these requirements as part of their operational environment rather than seeing them as something that gets in the way of “real work.”
Effective organizations operating successfully within regulatory environments know that at least some portion of their resource base will continuously be diverted towards “boring stuff” rather than focusing purely on enhancing operational capacity or wealth generation experiences for them. However, the ones who accept this without fighting against their fate are happier and feel less stressed coping with how things operate within these environments.
Further Reading
