HR Compliance Today: Challenges, Misconceptions & the Role of Technology - Six Five Virtual Webcast

Compliance is no longer a back-office checkbox—it’s a moving target. As global regulations accelerate and AI reshapes the enterprise, HR leaders are under growing pressure to manage risk, adapt faster, and stay compliant across regions in real time.

Host Keith Kirkpatrick is joined by SAP’s Jeff Glauber, Product Marketing Lead for SAP SuccessFactors HCM, and Janusz Smilek, VP Head of SAP Globalization Product Management, for a timely conversation on how evolving regulations, rising complexity, and emerging technologies are transforming HR compliance. Together, they unpack the biggest risks organizations face, challenge common misconceptions, and explore how AI-driven platforms are enabling a more proactive, scalable approach to global HR compliance.

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Key Takeaways Include:

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🔹Evolving HR Compliance Landscape: New and changing regulations, paired with increased risk exposure, demand a more dynamic compliance strategy from HR leaders.

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🔹Key Challenges & Risks: Companies face hurdles in recordkeeping, workforce classification, reporting, and policy enforcement, as well as hidden risks that can undermine compliance efforts.

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🔹Common Misconceptions: Many organizations underestimate the scope and complexity of compliance, overlooking areas that introduce risk.

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🔹Technology as an Enabler: Platforms like SAP SuccessFactors are instrumental in automating compliance tasks, improving visibility, and reducing error.

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🔹AI’s Transformative Potential: Artificial intelligence and emerging tools promise to further automate and enhance compliance processes, offering improved accuracy, proactive risk detection, and greater efficiency.

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Learn more at SAP.

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Keith Kirkpatrick:

Hi, welcome to the Six Five Virtual Broadcast. I'm Keith Kirkpatrick, Research Director with the Futurum Group. I'm here with Jeff Glauber, Product Marketing Lead for SAP SuccessFactors, and Janusz Smilek, VP, Head of SAP Globalization Product Management, to talk about HR compliance amid shifting regulations, heightened risk exposure, and managing operations in the era of AI. So welcome gentlemen, and thanks for joining me today. Thank you for having us. Glad to be here. Thank you for having us. Hi. So why don't we just start off and if you could just give me a little bit of background on, you know, what is today's HR compliance landscape actually look like right now here?

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 Jeff Glauber:

I'm happy to start off here and then Janusz, feel free to jump in. I think to me, personally, I find that the way I would describe this current landscape, it falls into two categories, one being it's complex and the other is fragmented. We're seeing that there's a greater number of new legal mandates that organizations need to comply with, especially for those that are operating in multiple countries. As you can imagine, if you're operating in one country versus operating in three countries, that's potentially three times as many as many mandates that you need to stay on top of. And that can create a lot of complexity and really some difficulty in maintaining that compliance along the way. where things get even more complicated is we see that organizations have a lot of fragmented systems. They might have multiple HR systems in use, they might have a cloud solution, an on-prem, some hybrid or homegrown solution, and that makes staying compliant and up-to-date even more challenging. So really, it's quite a difficult landscape out there, but there is some good news and I'm excited to kind of talk through some of the best practices we're seeing from our customers today.

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Janusz Smilek:

So let me maybe add to that if it's okay. So it's also about the change which we are undergoing. So I think that the landscape is gradually evolving from PayPal to digitalization. Even within the digitalization, we observe a lot of differences between different countries. Just to throw in some examples like e-social in Brazil or in Colombia, e-payroll, CFDI in Mexico. So as you said, fragmented, yeah, because every country is different. And it's not only from the technology point of view, but also when it comes to the regulations. A few favorite examples, you know, in Greece, when you have to share clock in, clock out data every 10 minutes in nearly real time. Then Germany, where since I think two years, the law was introduced that employee sickness Data needs to be synced every day as the health insurance informs the company about the employee's sickness. In Colombia, for example, third parties are involved in collecting the payroll data, ePayroll, and then the data goes to the government. And then on top of that, we have, for example, the European Union Pay Transparency Directive. So yes, you're absolutely right. It's very fragmented, but it's also evolving and it's constantly changing.

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Keith Kirkpatrick:

Yeah, it sounds like some of the complexity is also because if you are a large multinational corporation doing business in a variety of jurisdictions, you may not be doing the same types of or using the same particular compliance actions in one jurisdiction as another. And of course, as you mentioned before, things tend to be changing fairly quickly or all the time. Is that an accurate assessment of where we are? Yeah, absolutely. What about in terms of some of the biggest risks that companies are facing right now from a compliance perspective? Can you talk me through some of those and then how would an organization help to mitigate those risks? 

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 Jeff Glauber:

Yeah, well, I can I can start here. I think one of the the risks that always comes to mind for organizations is the monetary risk, there is that risk of, of potential fines of having, you know, costly errors that may ultimately hurt the bottom line. I know that we're seeing with the new EU Pay Transparency Directive that Janusz mentioned, along with that comes that potential risk of fines if you're not adhering to those pay gap rules that are being mandated. So I think that is one very obvious one. But I think another risk too is risk of really trust from your employees, but trust in the market. I think it's important that organizations really showcase that they're operating in a really compliant, really trustworthy way. And that can go a long way, both ensuring that your employees stay engaged. They want to stay with a company that they believe in, that they have full faith in. as well as in the market. I mean, you want to have a solid brand representation and to be able to show that you're a company that your customers can believe in as well. So I think those to me are really two primary risks, both from that financial risk and that risk of losing trust.

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Keith Kirkpatrick:

Janusz, can you give any kind of examples of how that kind of plays out in the market?

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Janusz Smilek:

You already mentioned some of them, but just if, for example, very, very simple one, if salary is delayed or not paid on time. Especially with public sector companies, such issues can result in news headlines. Imagine cases like child support deduction, and then somebody is suing you because the child support didn't come in time, and it's not your fault, but your employee's fault. Social insurance reporting, a very, very horrible case. But imagine someone starts in your company, you didn't inform the government, and then the employee is having an accident. How big the mess can be which it creates. And then one of the examples, even from this year, 2025, when the city of Seattle was hit with a class action lawsuit, after a not-so-perfect rollout of new HR software systems. So in four months, city workers experienced a range of problems, including things like incorrect paychecks, missing overtime, incorrect tax calculations, and errors in benefits. So I would say payroll, it's absolutely in the heart of when it comes to risk. So if you don't manage it appropriately, it can end up very badly. As just mentioned, it's monetary risk, but it's also image and also the employees, how they perceive you, how they feel treated by the company for which they are working.

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Keith Kirkpatrick:

Yeah, it sounds like it can impact other things like employee retention. recruiting, all of those factors that really do impact the health of the organization on not just an immediate basis, but long-term in terms of their perception as being not just a compliant, good corporate citizen, but also quite honestly, a place where people really do want to go to work and spend their time. And that kind of brings me to another question, which is really looking around at what are some of the common compliance misconceptions with HR that you've encountered in the marketplace?

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 Jeff Glauber:

Yeah, this is a great question. And I think for me, I think the common misconception that compliance is just about checking a box and that it being a one and done type of activity. But I think as many people know, it's ongoing and it needs to be constantly worked on. It's not as simple as just reporting on some number and some report, it's it's much more than that. It's much more multifaceted. And it's changing all the time. And that's, that's where I think technology can really play a big role in this and helping companies kind of ease that burden of staying on top of everything and kind of using technology to their advantage to remain compliant, not only today, but in the future.

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Janusz Smilek:

I absolutely agree with that. This checking boxes, that's a huge issue if it's treated like that, yeah? Because it's all about employer confidence and satisfaction. So even from my friend's circle, I recently was talking to someone who had this not necessarily nice situation. There's this strange concept in Germany that if you have a company card and it's being taxated and it's being deducted from the taxes are being deducted from the salary. And during the year, the person switched the company cars from one to another. And then it was a different amount which should be taxated. And then there was a lot back and forth during the year end tax clearance with the authorities. And this was not fun at all. And that's something, you know, it's employee confidence and satisfaction here. So very happy employee can turn to be very unhappy if because of the company they are working for, they end up in trouble with the tax office. That's definitely not the right thing. So it really goes much, much beyond checking boxes. It's going into areas which, as you said, employee confidence, satisfaction, and also then how they feel being treated by their company.

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Keith Kirkpatrick:

I would also think it goes beyond into looking at productivity. If there are errors with any of these kind of administrative aspects, employees are focused on that. Naturally, they're focused on that because it impacts their own bottom line, which can take their attention away from the business. And that seems to be a real risk of taking just sort of a, let's just check the box, make sure that we're quote compliant and not really making sure that these processes are carried out to the fullest extent in terms of making sure everything is correct. So, yeah, definitely some great points there. You know, Jeff, you just mentioned something and I can't believe it's taken us this long to get there. You mentioned technology, which of course brings up those two letters that we cannot get away from, which is AI. I wonder if you could talk a little bit about, you know, we are living in year of AI. How is this technology, how is AI going to impact the compliance world?

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 Jeff Glauber:

Yeah, you know, it's a good question. And I think AI definitely has a lot of potential to really help support compliance processes. But what I want to really emphasize is that the intent of using AI, it's not to replace that human element, especially when it comes to something as critical as compliance, you need to still have that human oversight. And so, you know, personally, I envision a future where AI is going to be supporting, you know, those HR leaders and ensuring that they're making the best decisions. But really, from a technology standpoint, what's arguably more important than the AI angle is that foundational piece, which at SAP, we look at it from the standpoint of what we call localization. So our products are available, they can be used in any country, but we also offer deep localization within specific countries. So for example, our core HR solution is localized for over 100 countries. And so as part of this, that means that our customers can can leverage localized best practices, they can leverage localized content and fields to make sure that they're accurately capturing the right information based on which country they're operating in. And so it helps take the burden off of HR a bit and allows them to be confident that they're they're doing things in the most compliant way. And as part of that, we also provide legal and regulatory updates. And I'm sure Janusz can talk a bit about that in more detail. But it's really just another way in which we help ensure that you're staying compliant, not just in one country, but potentially 100 countries. So just making it a little bit easier. And from there, that's when you start to bring in AI and build upon that strong foundation.

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Janusz Smilek:

Very good point here. Thanks for bringing this up. So it's about regulations and legal compliance and that's what we call localization. It's nothing what you do once and then you are done. It's a continuous endeavor. Why? Because Regulatory bodies tend to change the regulations, adjust them. And then you need someone who is monitoring this, who is able to talk to the regulatory bodies, who is able to talk to the government to get clarification. And also digitalization is playing a huge role here because more and more countries are going digital and paperless. especially true in many Central European countries. But if we are ready to talk about AI, I have a few very nice examples about how AI can help. Let's start with a very simple scenario. When have you looked the last time at your facelift? Did you understand it? I have to admit it's sometimes very hard, but explanation of your facelift with some special things with AI. That's a great scenario where AI can help. Then something like continuous compliance with support of AI. Imagine the HR administrator, even before running payroll, they can run checks with data quality to validations and are able to resolve pre-payroll alerts and possible errors just by leveraging AI. Then Aero is, let's be honest, a very complex beast. Aero is not easy, especially because the regulations are not easy in the countries. And configuration can be so much easier with AI, risk management, monitoring and alerting done by AI. supporting the human beings who are at the end need to make the decisions. Even doubtless scenarios like, I know it's very popular in the US, flexible benefits and the recommendations and guidance. Imagine you could get guidance as an employer to optimize your benefits. These are all scenarios which are absolutely highly relevant. I think AI will impact these areas heavily in the coming years.

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Keith Kirkpatrick:

Yeah, absolutely. But, you know, sort of the key takeaway that I'm getting from both of you is in order to really have a robust you know, global compliance plan, you really need to have a few different elements. You need to have the people and that localization presence. You need to have the technology piece, which certainly you do with AI. And we can, you know, we could spend 10 hours talking about AI and all of the benefits it might bring. But then of course, you know, the last part is the experience. I think, you know, compliance is not something that you can just jump into tomorrow and expect to be great at it. I think there's a lot to be said for having experience, having worked with different regulatory authorities, having worked with a lot of sort of end customer organizations to understand how things get done and honestly, where there are points of friction. So I wonder if you could talk a little bit more about how SAP is able to enable this free-pronged approach to compliance.

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 Jeff Glauber:

Yeah. One thing I really like that you're mentioning is the experience side of things. And that's where I think SAP really really offers that kind of unique perspective where we've been around for over 50 years at this point. There is a ton of experience sitting within our company, people that have worked on compliance for decades. And Janusz will tell you, and he's got many people on his team that I'm sure are incredible experts on this topic. They're living it and breathing it day in and day out. And the reality is that for HR administrators within an organization, they can't possibly have all the time to build up that expertise. And that's why they need to work with someone like SAP to be able to ensure that they're staying compliant, they're leveraging the experience that's out there, and able to use that to their advantage. So I think that that's really a critical element of this is really partnering up, find someone you trust, and really leverage and make the most of their experience.

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Janusz Smilek:

Yeah, absolutely. And also to have someone who is able to be your partner when you have to talk to the government about new regulations, because sometimes it's also very crucial to influence these regulations even before they happen. In some of the countries, I even had some talks with people where we have to explain them that in a computer science, there is yes or no, there is not maybe, you cannot implement maybe in a system and that's something that needs to be considered in the regulation. So also this kind of engagement locally with the governments and being able to influence it up front, that's something that is very crucial.

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Keith Kirkpatrick:

Absolutely. Well, we're almost out of time, but if you have any, Jeff, Yanis, any final thoughts on where we might be headed as we enter into this new year, particularly around looking at either the impact of AI or just the changing or continuing evolution of compliance as not just a check the box, process, but a way to really enhance an organization's overall status and profile.

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 Jeff Glauber:

Yeah. I mean, I think from an AI perspective, I think we're going to see a lot of really exciting innovation. I know that the topic of agentic AI keeps coming up more and more, and we're seeing new AI agents built. So I think we're not far out from the day of having a compliance agent of one that can help support the process. I really do want to emphasize it's supporting. It's not about replacing that human element. It's really just making it a bit easier so that you can be even more confident as you're navigating some of these changes. But one final thing that I want to mention from my side is that I can't emphasize enough that it's critical to get at that foundation right. So whether it's leveraging that localized technology, that in-region expertise, having that strong foundation, that's what's going to enable you to take advantage of AI and all the exciting innovations where you can build on top of it. So, really, it's important that organizations start with the basics and build from there.

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Janusz Smilek:

And this will then lead you exactly to the situation where this compliance becomes really advantage. And then it helps you to excite your people because then they can focus on everything what matters. Don't need to take care about things which are rather boring.

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Keith Kirkpatrick:

Absolutely. All right. Well, I want to thank both of my guests, Jeff and Janusz, for joining me today. Thank you very much, gentlemen. This has been the Six Five Virtual Webcast. I'm Keith Kirkpatrick from The Futurum Group and we'll be seeing you very soon. Bye bye.

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