Is your HR department ready for the AI Act and ESG obligations? Here's what you need to know

Compliance is no longer a check mark on the HR agenda, but a key component that future-proofs organizations. Legislation around privacy, diversity, ESG (Environmental, Social & Governance) and AI use is changing rapidly and becoming increasingly important. This means HR professionals must not only ensure compliance, but also take a proactive role in risk management, culture change and strategic decision-making.

What compliance trends will be important in the HR field in the coming years? This article takes a look at the five most important developments and offers insights into how organizations can prepare for the future.

1. From reactive to proactive compliance strategies

Traditionally, compliance was a reactive process: only when legislation was amended did HR have to act. Those days are over. With rapid changes in regulations and increasingly strict enforcement, the focus is shifting to a proactive approach. HR departments need to see compliance not just as an obligation, but as an important part of the organizational culture. This means:

• Anticipate future regulations by monitoring trends and then analyzing them accordingly.
• Collaborate with legal departments and compliance specialists to keep policies continuously updated.
• Train employees in proper guidelines before regulations are tightened, rather than after the fact.

By adopting a proactive strategy, organizations minimize legal risks and prevent reputational damage.

2. Stricter legislation: AI Act around AI use in HR

AI is playing an increasing role in HR processes, from recruitment and selection to performance reviews. But with this technology also comes more regulation. The European AI Act, which will be phased in over the next few years, sets strict requirements for the use of AI in HR decisions.

According to this AI act, HR departments should:
- Ensure transparency in AI-driven decisions, such as recruitment algorithms.
- Establish ethical guidelines for AI use within talent management.
- Monitor for bias and discrimination in AI systems, to ensure equal opportunity.
- AI can make HR more efficient, but without the right policies in place, it can pose legal and reputational risks.

Wondering how you can apply AI within your organization? Here you will find an extensive roadmap!

3. ESG and diversity policies become measurable and mandatory

Whereas diversity and sustainability used to be mostly voluntary initiatives, new ESG regulations are forcing organizations to take concrete steps. In the EU, large companies will have to provide mandatory ESG reports from 2025, in which diversity and inclusiveness policies, among other things, must be made measurable.

This means HR plays an important role in:
- Collecting data on diversity and inclusion within the organization.
- Developing policies that demonstrably contribute to equal opportunity.
- Training managers and employees to achieve ESG goals.

Transparency and measurability are essential. Organizations that fail to meet their diversity and sustainability goals may face legal consequences or reputational damage.

4. The impact of new privacy laws on HR data.

The AVG (General Data Protection Regulation) continues to evolve, and new privacy regulations directly impact HR departments. The increase in home working and hybrid working is increasing reliance on digital tools, which calls for stricter safeguards on privacy and data security.

HR should:
- Ensure transparent handling of employee personal data.
- Develop policies around remote employee monitoring and control.
- Conduct regular audits to ensure data security and compliance.

In addition, regulations surrounding the use of biometric data, such as facial recognition and fingerprint scans, are becoming stricter. HR professionals need to carefully identify what data is being collected and whether it is in line with legislation.

5. Continuous compliance training as standard within organizations

Compliance can no longer be limited to annual e-learnings or mandatory training for new employees. Legislation is constantly changing, and employees need to stay abreast of the latest guidelines. This requires a dynamic and ongoing learning culture within organizations.

Successful companies are turning to:
- Microlearning and just-in-time learning, where employees receive the right compliance training at the right time.
- Gamification and interactive learning methods, so that compliance is not a boring obligation.
- Real-time monitoring of compliance training, so that organizations have instant insight into who is up to date on the latest regulations.

By using compliance education strategically, organizations ensure that employees not only know rules, but actively apply them.

Compliance as a strategic opportunity for HR

The future of compliance in HR is not only about compliance, but also about proactive risk management and creating a strong corporate culture. Organizations that invest in data-driven compliance, continuous training and ethical AI use are not only ahead of legislation, but also strengthen their reputation and internal organization.

For HR professionals, this means that compliance is not a burden, but an opportunity to play a strategic role in future-proofing their organization.

Want to know how your organization can make compliance smarter? SkillsTown offers digital learning solutions that help your employees stay up-to-date at all times.

Request a demo and discover the possibilities.

Request a free demo