74% of small and medium sized employers say they are not ready for a WRC visit as gaps in documentation and limited rehearsal undermine confidence.
Irish small and medium sized businesses are increasingly worried about their ability to comply with workplace regulations, according to new research from HR software provider HRLocker.
The company’s latest Irish SME HR Report shows that 74% of SMEs do not believe they would pass an unannounced inspection by the Workplace Relations Commission. The findings highlight widespread gaps in statutory documentation and a lack of internal compliance checks among firms employing between 20 and 249 people.
“SMEs don’t need more regulation. They need the right processes and systems to stay on top of the basics”
The study, based on a 2025 survey of 400 HR professionals, indicates that many employers remain unsure of their true compliance position. The report points to two core issues that underpin this uncertainty: fragmented records and the absence of mock inspections or internal audits.
Papers, please
Many SMEs do not know whether their documentation is complete or easily accessible, and the research suggests that these weaknesses become more significant when processes have never been tested in advance.
The documentation problem is particularly pronounced. Over half of the SMEs surveyed have incomplete or outdated employee contracts and terms. Almost one in two lack up to date disciplinary or grievance records and a similar proportion have gaps in employee handbooks and policies.
Two in five do not have full leave and absence records or complete payment and payslip information. Even in areas where compliance appears stronger, such as training logs and working time records, more than a quarter of SMEs report missing information.
These gaps affect the day to day visibility that employers have over their compliance position. Without a single source for records, many HR teams struggle to assemble the information that would be required during an inspection.
This issue is compounded by the fact that most SMEs have not rehearsed the inspection process. Only 26% conducted an internal audit or mock inspection in the past year, while more than half did no checks at all.
The operational consequences of this lack of rehearsal are evident in the time it would take businesses to assemble a full evidence pack.
One in four SMEs estimate that they would need four to seven days to gather all necessary documentation and one in ten say the process would take more than a week. These delays can lengthen investigations and create the impression of disorganisation, making it more likely that inspectors pursue additional lines of inquiry.
Low confidence is a predictable result. Just 6% of SMEs feel completely confident that they would pass an unannounced inspection. According to HRLocker, this lack of confidence does not necessarily indicate widespread non compliance. Instead, it reflects the uncertainty created by missing records and untested procedures.
Crystel Robbins Rynne, chief executive of HRLocker, said the findings suggest that many SMEs are closer to compliance than they believe but lack the systems and testing that would allow them to demonstrate it.
She said SMEs often struggle because they are not carrying out internal checks. In her view, better visibility and regular audits would allow employers to understand their risks and respond to inspections far more efficiently.
“The data shows that SMEs are more prepared than they think, but they’re not testing themselves. Without internal audits and clear visibility, leaders are left guessing. With the right tools and guidance, SMEs can move from uncertainty to confidence and protect their organisations from unnecessary risk,” said HRLocker CEO Crystel Robbins Rynne.
“What this research really highlights is that SMEs don’t need more regulation. They need the right processes and systems to stay on top of the basics. Regular internal audits, centralised documentation and digitised record‑keeping make compliance manageable day‑to‑day. When those foundations are in place, organisations can respond faster, reduce uncertainty and be genuinely inspection‑ready,” added Robbins Rynne.
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