What Is a Compliance Officer?

Updated September 26, 2022 · 6 Min Read

Compliance officers possess a special set of skills and perform a crucial service to companies and organizations. Learn what compliance officers do, what the job requirements are, and what abilities are required.

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The goal of a compliance officer is ensuring organizations follow all applicable laws and industry regulations. By doing so, compliance officers reduce their employers' risks of fines, penalties, and punishments.

Compliance officers may oversee a compliance department or work with fellow compliance officers. These professionals record activities, analyze data, and issue reports on compliance for internal review. They also coordinate with managers and department heads to provide information about compliance. Compliance officers also report to external agencies and regulatory bodies about institutional compliance.

Compliance officers work across industries. According to the U.S. Bureau of Labor Statistics (BLS), federal, state, and local governments employ the highest numbers of compliance officers in the United States. The top-paying industries for compliance officers include crude oil transportation, information services, and the motion picture and video industry.

What Does a Compliance Officer Do?

Compliance officers make sure companies and organizations operate in full compliance with legal regulations and industry-specific guidelines. They also monitor internal policies and bylaws. In the event of regulatory risks or misconduct, compliance officers address concerns and find solutions to these challenges.

Common duties for compliance officer jobs include:

  • Develop and Implement Policies and Procedures: Compliance officers create organizational policies and procedures using their knowledge of applicable laws and regulations. They disseminate this information to other employees as needed.
  • Monitor Compliance: To ensure organizations comply with legal and ethical guidelines, compliance officers perform audits and research institutional practices. They create internal and external reports based on their findings.
  • Identify Potential Risks: As part of compliance monitoring, compliance officers identify activities and practices that risk violating regulations and industry standards. They work alongside managers and employees to mitigate these risks.
  • Act as a Liaison: Compliance officers serve as intermediaries between their organizations and overseeing bodies, including regulating agencies and government authorities. This role also applies within their organization, where compliance officers function as the point of contact between employees and managers about misconduct.
  • Educate and Train Employees: Compliance officers keep coworkers informed about rules and regulations by offering workshops, classes, and training. They also answer questions and serve as a resource for information about compliance.

Key Hard Skills for Compliance Officers

  • Compliance Management Software: Technical knowledge of compliance management software is essential for compliance officers. These digital tools allow compliance officers to monitor and document compliance activities based on multiple regulations and standards.
  • Regulatory Knowledge: Compliance officers need to know which laws and regulations apply to their organizations' practices. They must stay current with updates and changes to these policies. Compliance officers can earn certifications through credentialing bodies in their field.
  • Data Analysis: Compliance officers assess and report on compliance by collecting information about organizational practices. To act upon their findings, compliance officers need the technical savvy to use applicable tools for data analysis. They also need analytical skills to interpret those findings.
  • Communication Skills: Laws, regulations, and policies often contain jargon and industry-specific language. Compliance officers must adapt this information so they can communicate it to employees and managers. These professionals also need strong writing skills to create compliance reports for internal and external review.

Key Soft Skills for Compliance Officers

  • Critical Thinking: Compliance officers assess guidelines and apply them to practices within organizations. They identify relevant rules and regulations and execute implementation measures.
  • Problem-Solving: Because compliance officers identify risks of noncompliance, they must have the skills to mitigate and eliminate risks they find. Problem-solving involves analyzing contributing factors, creating interventions, and assessing solutions' efficacy.
  • Leadership: Compliance officers' most important leadership skill is serving as a model for compliance in an organization. These professionals also need to be direct and assertive while remaining positive and following the rules. They share information with others in a clear, convincing manner.
  • Work Ethic: For compliance officers, work ethic involves taking responsibility in the workplace, modeling compliance, and respecting colleagues. Compliance officers complete their duties in a timely fashion to ensure their companies avoid compliance issues.

Compliance Officer Areas of Expertise

Compliance officers can specialize in various types of compliance. They can also focus on compliance in a specific industry. By concentrating on a subset of the field, compliance officers demonstrate their ability to develop expertise to potential employers.

Healthcare


Healthcare compliance officers ensure adherence to federal healthcare laws and regulations. Healthcare compliance officers have knowledge of Medicare, Medicaid, and federal legislation like the Health Insurance Portability and Accountability Act. They work at hospitals, research laboratories, clinics, and long-term facilities to protect patient privacy, safeguard sensitive information, and prevent fraud.

An entry-level healthcare compliance officer may investigate healthcare providers and facilities to ensure they follow applicable guidelines. This includes monitoring and auditing practices for recording, storing, and transferring medical records. Audits can be done internally or externally — either within a healthcare facility or through regulatory agencies.

With experience and training, compliance officers can advance to senior roles, including managerial positions. Senior healthcare compliance officers create and implement policies and procedures. They are responsible for ascertaining organization-wide compliance. September 2022 Payscale data shows the average salary for compliance officers is $71,510, while the average salary for compliance managers is $80,720 as of September 2022.

Common Job Titles

  • Healthcare Compliance Officer
  • Healthcare Compliance Manager
  • Healthcare Compliance Coordinator
  • Healthcare Compliance Analyst

Banking and Financial Services


Banking and financial services compliance officers work with financial and lending institutions to ensure compliance with relevant regulations, laws, and policies. This includes compliance with local, state, and federal financial laws alongside international regulations.

In the United States, banking compliance officers are experts in legislation related to areas like credit card accountability and responsibility, the Federal Reserve, and truth in lending. Through experience and in-depth knowledge of banking and finance regulations, compliance officers can move into executive positions. Payscale reports the average base salary for chief compliance officers with financial compliance skills was $106,970 as of September 2022.

Common Job Titles

  • Banking Compliance Officer
  • Financial Services Compliance Officer
  • Financial Compliance Manager
  • Chief Compliance Officer

Manufacturing Compliance


Manufacturing compliance involves ensuring adherence to rules and laws across the lifecycle of a product or service. In addition to alleviating compliance risks for businesses, manufacturing regulatory compliance officers also pay attention to how manufacturing processes impact consumers.

These professionals take government regulations, industry standards, and technical requirements into account when creating compliance policies. They also monitor fair competition practices, workplace health and safety procedures, product safety rules, and data security policies.

Within manufacturing compliance, further specializations include areas like food, transportation, and technology manufacturing. The breadth of knowledge for compliance officers extends to guidelines for employees, employers, and the marketplace. Of particular importance for manufacturing compliance workers is knowledge of the Current Good Manufacturing Practice regulations.

Common Job Titles

  • Manufacturing Compliance Specialist
  • Senior Manufacturing Compliance Specialist
  • Manufacturing Compliance Manager
  • Manufacturing Compliance Associate

Environmental


Environmental compliance officers apply laws and regulations about environmental protection and safety to organizational practices. Environmental compliance officers coordinate compliance efforts for groups such as municipalities, the manufacturing industry, and utility companies.

Environmental compliance officers need to know local, state, and federal regulations. This includes rules from groups like the Environmental Protection Agency. They monitor and audit existing compliance practices, update compliance protocols, and provide advice about compliance violations relating to issues such as waste disposal, hygiene, and pesticide use.

Payscale data from September 2022 shows the average environmental compliance specialist salary is $59,900.

Common Job Titles

  • Environmental Compliance Officer
  • Environmental Compliance Specialist
  • Senior Environmental Compliance Officer
  • Safety Officer

How to Become a Compliance Officer

There are multiple pathways leading to compliance officer jobs. Because these professionals work in a diverse array of industries, compliance officers can earn degrees in areas like accounting, business, and finance to enter the field. Programs such as legal studies and manufacturing may also qualify workers for compliance officer roles in some industries.

To advance to senior-level and managerial roles, compliance officers need professional experience. Additional education, such as a master's degree, can also lead to promotions. Certifications like those offered through groups such as the Society of Corporate Compliance and Ethics, the National Association of Federal Credit Unions, and the American Bankers Association may also help these professionals land advanced positions.

Compliance Officer Jobs Outlook and Salary

According to data from Projections Central, compliance officer jobs are expected to grow 6.2% from 2020 to 2030, equating to 30,000 annual job openings. Reuters reported in August 2021 that the need for knowledgeable, experienced compliance professionals continues to expand: The article quotes Jack Kelly at the Compliance Search Group, who notes the field lacks "candidates with the right experience."

Because compliance jobs are available in many industries, opportunities for compliance officers exist across the economic landscape. BLS data shows federal, state, and local agencies are the top employers of compliance officers, while pipeline transportation of crude oil and information services offer the highest average salaries.

The BLS also reports the three states with the highest average salaries for these professionals are the District of Columbia, New Hampshire, and New Jersey, with pay ranging from $91,520 to $98,740. The BLS also reports the three states with the highest employment for compliance officers are California, Texas, and Florida.

Career Spotlight: Dalton Allen


Editor's Note: This interview was edited for length and clarity.

What initially interested you in accounting? How does it relate to compliance?

My interest in accounting originally started as an interest in the business. I had my first business at the age of seven, making and selling luggage tags. At first, my mom was buying all my raw materials, but then she forced me to start buying them myself — she is a business person herself. This was my first real taste of what cost of goods sold was, and I became obsessed with increasing my knowledge.

My interest in accounting as a profession finally took root a few years later after being mentored by my uncle. My uncle, an accountant, started a bank that became wildly successful — and years later ended up being acquired by a major bank. He introduced me to what accounting really is: the backbone of all business. Accountants, more than any other position in an organization, understand the mechanics of an organization. One often-overlooked component of this is compliance … and this is where my uncle really made his mark and changed my perspective on the intersection of compliance and accounting.

Compliance does not need to be a barrier, cost, or administrative burden. By understanding law and regulations and properly evaluating risk, we oftentimes find opportunities where others only find challenges. My uncle taught me at a very young age that if you marry accounting skills with compliance burden, opportunity awaits.

How would you explain the career path that led you to your current role? What do you think helped you most on your journey to becoming the leader of a firm?

My career path follows that of many accountants. After graduating from school, I went into public accounting for a few years, then I moved to the private sector. While I didn't know it at the time, every step I took led me to where I am today. Public accounting was not the right industry for me long term, but I gained exceptional knowledge from that experience.

I learned to tackle the tasks in front of me. [Compliance] careers are very overwhelming, and when we try to digest it all at once we get anxious, make mistakes, or shut down entirely. As I moved on in my career, the tasks got bigger and more complex, but the objective right in front of me is always achievable.

What education (degrees, certifications) did you need or want to pursue your career, specifically the compliance part of it?

Going into the world of compliance doesn't have a set path in the same way a doctor or engineer does. One can approach it in many different ways, but I have found that the most successful compliance professionals have educational backgrounds in accounting or law. However, the bare minimum is a bachelor's degree. Companies hiring for this level of position are going to require a BA/BS nearly all the time.

While there are various compliance certifications, there isn't a clear standard for compliance officers. If you work in a specific industry, you may want to find out if they provide a certification program, like the Society for Human Resource Management does for HR compliance.

Can you describe a typical day dealing with your clients' compliance and regulatory issues?

There are four main compliance and regulatory issues I face regularly:

  • Income Tax: This work will involve working with my clients and various tax professionals to establish a tax strategy for both the business and the individual. Because many clients are flow-through entities — meaning that the business owner pays the tax, not the business itself — I also work in conjunction with the business owner to help structure their personal life and residence in such a way that we can maximize the tax benefit.
  • Sales and Local Tax: After the 2018 U.S. Supreme Court case South Dakota v. Wayfair, sales and local tax issues have become a hot-button topic. The Wayfair decision dramatically expanded states' authority to collect sales tax for online businesses. Prior to this decision, most online retailers did not have to collect or remit sales tax, but after the decision, they did. Fun experiment: Next time you buy something from a strictly online retailer, pay close attention to the sales tax they are collecting (or not collecting at all). If the amount is different than what you expect, there is a high chance that they are not complying with rules set forth in South Dakota v. Wayfair!
  • HR and Employment: Human resources and employment laws are tricky and vary widely based on jurisdiction. Because all my clients have employees, I always run an exposure analysis on new clients. This involves looking at hiring/firing practices, company handbooks, salaried vs. hourly employees, and many more [factors]! I tell my clients that HR and employment are "low-value/high-risk" tasks. This means that by putting extra resources and emphasis into complying with HR and employment law, you don't get an inherent return on investment (ROI) in your business, but the downside is exceptional.
  • Industry-Specific: Different industries have different compliance requirements and issues. I specialize in clients in highly regulated industries. In my portfolio, I have clients in healthcare, alcohol, and cannabis.
If you can accurately and simply explain the problem, why it matters, and your solution, you will have a successful career in compliance.

Which are some of the most rewarding aspects of working in compliance? Some of the most challenging aspects?

Rewarding: Solving issues. Compliance issues in an organization can be incredibly anxiety-inducing, potentially putting the company at risk of closure or default. Once you have identified and corrected an issue, there is an immediate sense of accomplishment that many careers don't have. The fact that you can singlehandedly change the course of a business is both rewarding and scary!

Challenging: Being confronted with issues that have no clear solution. It can be frustrating to know about the issue with no way to solve it. In these situations, we do our best to get as close to compliance as possible and advocate for policy change where necessary.

Can you identify the most important skill compliance officers may need to succeed?

If I had to pick one skill, I would say communication. Can you take what you learned from your research and explain it in a way that a third grader can understand? Many times, businesses are in challenging compliance situations because the reality of the situation has not been explained to the key decision-makers in a way that makes sense to them. If you can accurately and simply explain the problem, why it matters, and your solution, you will have a successful career in compliance.

How would you best advise students considering your career?

Always be learning. I often find that I'll stumble across a random article or be discussing something off-topic with a friend and learn something new, only to have that same thing come up in business six months later. Pursuing knowledge is the most important thing you can do in your career. Sometimes, you can't charge your client for it, but that is OK! I believe that the pursuit of knowledge always has a positive ROI.

Dalton Allen is an accountant-turned-CFO who now runs his own fractional CFO firm. Dalton brings a fresh perspective to accounting and inspires his clients to think about their businesses in a new and creative way. He is passionate about helping clients solve complicated problems and absolutely loves a clean balance sheet.

Questions About the Compliance Officer Job Description

What are the roles and responsibilities of a compliance officer?

Compliance officers oversee the application of and adherence to laws and regulations within companies and organizations. They monitor compliance, update practices and policies, and provide information about compliance needs and expectations to all employees.

What is an example of a compliance officer?

In manufacturing, for example, a compliance officer may be a safety monitor. This person oversees workers to ensure they comply with federal, state, and local laws about manufacturing processes and labor.

What makes a good compliance officer?

A good compliance officer is well-versed in the rules and regulations of their industry. Good compliance officers are detail-oriented and use interpersonal skills to communicate and enforce compliance policies and practices.

Is a compliance officer a stressful job?

Like any job, working in compliance can be stressful. Enforcing laws and regulations related to industry practices can create a high-stakes job environment, as noncompliance can lead to fines or other penalties for a compliance officer's organization.


Featured Image: AzmanL / E+ / Getty Image

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