Southeast Asia is currently one of the world’s most rapidly growing regions with experts predicting it will soon rank as the fourth largest global economic zone. It is also emerging as a hub for industries like manufacturing, construction, fishery, BPO, and agriculture, playing a pivotal role as a significant global center. One of the world’s fastest-growing consumer markets, this dynamic region with its rich fabric of nations, industries and cultures, is now increasingly becoming an attractive prospect for global business ventures.
Southeast Asia also currently stands at a critical juncture in its development. As the world’s fifth-largest economy, it consistently surpasses global growth averages. Additionally, the region has remarkable diversity, being home to a large proportion of the world’s workforce under the age of 30.
For multinational businesses, this workforce plays a key role. Needless to say, if they wish to operate in the SEA to tap into this workforce, it is imperative that they are well-informed about and adhere to industry-specific compliance in the region. Given that there are distinct laws and regulations governing each working location, business leaders must remain vigilant for compliance in HR, staying updated to avoid potential legal issues.
Compliance in HR: Rules Specific to SEA
Southeast Asia is home to some of the world’s most rapidly expanding economies. In line with the remarkable diversity in landscapes and cultures across different countries, the region also has contrasting employment statuses. Across industries in SEA including manufacturing, construction, fishery, BPO, agriculture and so on, employees enjoy varying rights and privileges depending on their employment status.
- For instance, in Indonesia, employment can be categorized into two main types: definite period employment and indefinite period employment. Definite period employment is related to roles with a predetermined duration or those of a temporary nature, while indefinite period employment involves more permanent and long-term positions.
- In Vietnam, individuals who offer their services for service fees, such as consultants or contractors, are not typically categorized as ‘employees’.
- In Malaysia, according to the Minimum Wage Order 2022, the minimum monthly wage for employees will be RM1,500 or $320. All employers, regardless of the size of their workforce, are legally obligated to comply with the minimum wage requirement.
- Previously, Malaysia’s standard working hours consisted of 8-hour workdays, totalling up to 48 hours per week. However, with the revisions introduced by the Employment (Amendment) Act 2022, the maximum limit for regular working hours in a week has been reduced from 48 hours to 45 hours.
Such diversity related to compliance in Southeast Asia can undoubtedly complicate the decision-making process when determining which country to expand into, particularly considering the complexities of compliance management.
What is Compliance in HRM?
Human Resource Management (HRM)compliance is essentially a business’ commitment to adhering to the employment regulations and standards established within a specific city, state, or country. While it is imperative to conform to these local laws to ensure HR compliance, effectively managing alignment with these regulations can be a daunting task. Drafting contracts and HR policies aligned to legal and regulatory mandates, including wage and hour laws and so on, makes up a critical aspect of HR compliance. These measures ensure that employees have a clear understanding of the legal framework throughout their tenure.
HR compliance also involves the responsibility of staying informed about any changes in employment laws. HR teams need to remain up-to-date on all relevant regulations and industry best practices that apply to their field.
Achieving Compliance with HR Compliance Software
The onus of managing HR compliance primarily lies with HR departments. Infact, as per the Digital HR Transformation Survey 2022 for SEA, 96% respondents saw HR’s role evolving to become someone who enhances the whole employee experience with robust digital solutions.
Fortunately, there is an abundance of HR technology solutions to streamline the HR compliance process and ensure adherence to regulatory mandates. As the main hub for people data, a cloud HR compliance software can be a powerful tool for mitigating compliance risks within the business. An HR compliance software offers a comprehensive approach to maintaining the synergy between compliance and HR tasks, leading to greater efficiency.
Ensuring that all the documentation is in place and accessible
With an HR compliance software, HR teams can effortlessly record employee consent regarding company policies and maintain an accurate record of documents. An HR compliance software also plays a key role in safeguarding the organization’s sensitive information with utmost security, displaying information solely to authorized users.
Data management and security is paramount
While securing data is one aspect of compliance, it is also necessary that data remains accurate and up to date. Managing data across multiple systems with varying security levels can make tracking and updating a challenging task. An HR compliance software with self-service features empowers employees to take responsibility for updating their own information. Additionally, the system can promptly notify HR teams of any changes as needed.
However, it is important that every HR compliance software operating in a particular region must strictly adhere to the necessary laws and regulations of that region to ensure compliant operations. With an HRMS software that follows a strong compliance foundation, businesses can ensure regulatory compliance more effectively.
Rather than keeping track of individual controls required by different legislations on a one-by-one basis, businesses can create a unified set of comprehensive compliance controls. Some of the best HR compliance softwares come equipped with automation features that help HR teams by promptly providing updates and revisions related to compliance regulations.
How Akrivia HCM is the right fit for HR Compliance in South East Asia?
Some of the best HR compliance software such as Akrivia HCM, which operates in the SEA region, provide state-of-the-art HR management solutions designed specifically with compliance management. As a labor law compliance software built to seamlessly adhere to SEA compliance regulations, Akrivia HCM’s comprehensive suite, spanning from hiring to retirement, covers a wide range of features. These include payroll processing, tax management, compliance reporting and other important functionalities.
Ensuring compliance with local labor laws
Akrivia HCM helps HR teams in the SEA region to effectively ensure compliance with local labor laws with up-to-date legal data and automated HR tasks. The platform has the capability to generate employment contracts, manage employee records, and guarantee accuracy of all employee details. With a statutory compliance payroll software, HR teams can avoid penalties resulting from non-compliance with labor and payroll regulations.
Streamlining the hiring process
As a comprehensive HR compliance software, it provides immediate access to employee qualifications and skills. Besides, as an efficient data management system, it enables the categorization of employees according to their functional requirements. Leveraging Akrivia HCM’s advanced applicant tracking system (ATS), organizations can automatically evaluate candidates based on predefined criteria while adhering to compliance boundaries.
1 HCM, 20+ modules
Akrivia HCM offers a unified platform for the management of employee benefits, including insurance, ESB, annual leave, sick leave, and more — all accessible through a single interface. Additionally, Akrivia HCM easily integrates with a range of HR modules, including Time and Attendance, Leave Management, Recruitment, Expense Management, and Off-boarding, guaranteeing a holistic compliance management experience.
South East Asia’s dynamic digital, corporate, and regulatory environments have witnessed a host of changes recently, posing even more challenges for companies operating in the region. HR teams within these markets encounter ever-evolving work environments and the sudden proliferation of new compliance demands across SEA.
Combined with large and expanding workforces, these transformations can be challenging. Addressing them can be difficult without the implementation of a suitable cloud-based HR compliance software.
Leveraging best HR compliance softwares such as Akrivia HCM empowers organizations to automate compliance reporting, enabling adherence to labor laws and regulations. Akrivia HCM with its advanced features, customizable structure development, and effortless integration with other HR modules, ensures easy HR compliance.
So why wait? Switch to Akrivia HCM today and streamline your HR compliance!