The Real Cost of Outdated Policies (and How to Avoid Risk)

With regulations constantly changing and companies updating their culture often, a dusty employee handbook can do more than simply bore a new hire; it can quietly cost your organization money, efficiency, and trust. In a recent webinar, Sharlyn Lauby, “The HR Bartender,” SHRM-SCP, and President of ITM Group Inc., laid out a powerful case for policy maintenance and provided a five-step framework that any organization can adopt to keep its policies current, effective, and aligned with company culture.

“Outdated policies can cost companies in many different ways,” said Lauby. “The cost to the organization can vary depending upon the company, the industry that you’re in, and where you’re located.” Learn the risks your organization could face, plus how to avoid them through a regular policy review process, in this guide.

Why Updating Your Internal Policies Matters

Lauby underscored four core risks of stale policies: legal liability, security vulnerabilities, operational inefficiencies, and erosion of employee trust.

Legal risks are often the most obvious. Policies that don’t reflect current laws or regulations can expose companies to fines, penalties, regulator investigations or audits, or lawsuits.

However, security and data protection also loom large. “With some policies, we could place the organization in a security risk. It is possible that the organization exposes customer data or employee data,” Lauby warned.

Then there are the operational and cultural impacts. A policy that no longer aligns with how work actually gets done can slow processes and frustrate teams. “One of the things that policies do is they let employees know that we care,” Lauby said. She suggests that when an employee comes across an outdated policy, they might think, “If the company doesn’t care enough to update this policy, what else don’t they care about?” This can lead employees to feel apathetic or even unsafe in the workplace.

A Five-Step Framework for Policy Maintenance

Lauby shared a five-step framework that balances practicality with strategic foresight. Follow these steps when planning your policy review process.

1. Decide the Who

Start by determining who should own and execute the policy update. While in-house teams may have the context and save costs, external experts bring speed, consistency, and specialized knowledge.

“Just because I can do something doesn’t mean that I should,” Lauby explains. “[Organizations] need to ask themselves . . . ‘is this a best use of our time?'”

Often, a hybrid approach with some policies handled internally and others outsourced strikes the best balance.

2. Decide the When

Policy reviews can be triggered by:

• Seasonal events (e.g., hurricane preparedness)
• New laws or repealed regulations
• Investigations or audit outcomes
• Cultural evolution or changes in workforce expectations

While these are generally reactive, you can also plan proactive audits of your internal policies at regular intervals (e.g., annually, every five years, when a new senior leader is hired, etc.).

3. Revise the Policy

This is more than wordsmithing. Ask the tough question: Do we still need this policy? If yes, clarify whether you’re revising the policy itself or just the associated procedures.

Lauby emphasized bringing in subject matter experts and reviewing competitive and geographic benchmarks to ensure your policy matches best practices. “Everything doesn’t need to be a policy,” she said. “Really sitting down as an organization and saying . . . ‘Why are we creating a policy?’ is important.”

4. Communicate the Changes

Policy changes are only effective if they’re understood, which means clear, consistent communication with employees. Lauby encouraged using multiple channels (e.g., emails, meetings, town halls, one-on-ones) to ensure comprehension and retention.

“One-and-done might not cut it,” she cautioned. She also suggested syncing communication with other company activities—such as updating their personal information with HR or picking up a check on payday—for better reach and engagement, especially if you want employees to sign off on receiving the policy update.

5. Hold People Accountable

Without enforcement, policies become optional. While accountability doesn’t have to be punitive, it must be consistent and clear, Lauby explained.

“If we create a policy or a procedure and no one follows it,” you’ve wasted time and resources, and put both your organization and employees at risk. “There need to be consequence sto not following the policy or procedure. I’m by no way implying that . . . you get written up or you get fired or anything like that, but we do need to say, ‘you will be held accountable’,” Lauby said.

Gaining Leadership Buy-In

For those overwhelmed by the scope of policy maintenance, Lauby suggested starting with leadership buy-in before any updates are needed. Use times of relative calm to pitch a structured approach and build consensus. “Don’t wait until policy needs to be updated,” she advised. “Put the steps in place now and get comfortable with it so we’re not learning a new process and revising policies at the same time.”

A simple checklist or documented process can empower others in the organization to take action when needed, creating consistency across departments and teams.

How Case IQ Helps

Staying on top of compliance and misconduct investigations doesn’t have to be overwhelming. Case IQ’s configurable forms and fields let you add and update your company policies in your case management system. This ensures team members never forget to include a vital piece of information on a form or to follow a certain step; it’s built right into your workflow!

Our new AI-powered Summarization Copilot also makes writing final investigation reports easy. It compiles all relevant information from the case file into the format of your choosing, taking your current internal policies (and regulatory requirements, for certain case types) into account.

Want to take control of your case management process?

Book a call with a Case IQ expert today and learn how we can help streamline your workflows so you can investigate with confidence.