Your organization might be surprised to know that it does not need to hire a compliance officer, or even maintain a full-time employee dedicated to compliance, in order to meet requirements.
If you work in the financial industry, telecommunications, fintech, or healthcare, you know that compliance is not optional. In fact, new and updated regulations go into effect with increasing regularity. It’s becoming more and more difficult to keep up with the laws impacting financial services, healthcare, and other regulated sectors. This gives the impression that hiring a full-time compliance officer is necessary to ensure that your organization’s security program remains effective and compliant with the latest regulations.
But that’s not the case. And outsourcing the CCO position can actually provide some valuable advantages.
Compliance Officers Are Crucial, Yet Costly
While every organization requires a strict compliance program and policies, not every organization can afford compliance officers. By all accounts, the growing importance of security and compliance, combined with the increasing demand for candidates with the education and skills to fill the roles, is pushing up the expected salary for these jobs.
Chief compliance officers rank alongside chief financial officers (CFOs) and chief executive officers (CEOs) on some executive teams in terms of importance and financial impact. This is evidenced by the fact that compliance jobs ranked among the top-paying positions, including government, computer manufacturing, and pharmaceuticals, according to 2020 data from the Bureau of Labor Statistics.
“The national average salary for a Chief Compliance Officer is nearly $132,000, with some CCOs making more than $250,000 a year.”– Glassdoor
Outsourcing compliance roles allows you to save money while maintaining quality. Companies that outsource this role can rely on an irreplaceable and one-of-a-kind guide to help them navigate the processes of security and compliance. Yet, they get this crucial guidance at a fraction of the cost of employing someone in house.
Related article: Should We Outsource or Hire IT Security Specialists?
Why Fractional CCOs and Outsourcing Compliance Roles Make Sense
There are some important benefits associated with fractional compliance officers, or those who work on a part-time basis, to consider.
- Varied Experience – Fractional CCOs have a wealth of experience and are able to provide valuable insights to your organization in relation to a wide range of compliance issues. They can help you assess risk and develop mitigation strategies, as well as review and update your security program.
- Specialized Skills – Outsourcing the leadership role allows you to gain access to a wide range of expertise that goes beyond the resume of an executive with a string of in-house positions.
- Greater Flexibility – Outsourced compliance professionals can independently jump in and play a fractional or part-time role in a company’s operations much more easily than trying to convert an internal executive who specializes in other areas of the business.
- Less Expensive – Another advantage of working with a fractional CCO is cost savings. Hiring a full-time compliance officer can be expensive, and often unnecessary. Outsourcing this role to a fractional CCO can help you save money while still getting the benefit of an experienced professional. Plus, you will save on recruiting efforts and employee benefits.
- Faster Onboarding – Finding the right compliance talent in a cost-effective manner is a significant challenge with hundreds of new fintech companies and digital service providers starting up each year. There is a high demand for both staff and leadership. Outsourcing the CCO role, and other compliance positions can go a long way towards meeting that demand, especially when the time for finding the right fit is limited.
- Overall Efficiency – Fractional support still delivers full regulatory compliance and reporting, while eliminating redundancy in compliance efforts and keeping the process moving at a steady, but the efficient pace that works with your company’s schedule.
- Reliable Continuity – Outsourcing CCOs and other compliance roles can also provide continuity of operations in the event that your full-time compliance officer is unavailable.
- Preventing Rushed Activities – Having a third-party perspective can be a huge advantage when looking to make compliance activities more structured. Not only does a fractional compliance professional relieve the workload for your company, but he/she establishes and runs regular risk assessments and compliance reviews to alleviate the rush when your certification is up for renewal.
- Super Scalability – can handle the entire compliance function, from leadership to managing complex tasks to deploying cost-effective resources to help build more robust capabilities quickly, without lengthy ramp-up or steep learning curves.
- More Assurance – Senior executives and shareholders often have more confidence in external compliance practitioners. They provide executive-level reports on all compliance functions, top-level risk protection, and more accurate budgeting estimates.
Related article: What’s the Difference Between Outsourced and Co-sourced Internal Audits?
What Are Fractional CCOs Able to Handle?
Here’s an idea of what a typically outsourced compliance officer is responsible for:
- Collecting and analyzing compliance documentation.
- Reviewing the business practices, operations, processes, and systems to ensure that all compliance requirements are met.
- Overseeing the drafting of procedures and policies; keeping these up to date and effective going forward, in accordance with new regulations and organizational direction.
- Assuring that the firm’s systems and controls comply with regulatory standards.
- Establishing risk alerts for compliance issues as an early warning system.
- Creating and maintaining relevant documentation for the implementation of controls.
- Ensuring that all employees receive appropriate, and continual, compliance training.
- Reporting to the CEO, board of directors, and senior management.
- Providing advice to executives on all aspects of compliance.
Related article: What Roles Can a Virtual Compliance Officer Cover?
Want to Know if Fractional Compliance Services Can Work for You?
Contact I.S. Partners for a consultation.