Is regulation a four-letter word?

By Claude Balthazard, Ph.D., C.Psych., CHRL
Vice-President, Regulatory Affairs and Registrar at HRPA

Before 2008, the words regulation, regulator, and regulatory did not appear anywhere at HRPA; after 2008 these words started appearing in all sorts of places—webinars, documents, strategy documents, and annual reports.  How did this come about? and perhaps more importantly why did this come about?

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For many, especially in business, regulation is a four-letter word. It is synonymous with red tape, bureaucratic meddling, and extra costs.  Even Industry Canada, in a 1994 report of the Small Business Working Committee offered the following definition of regulatory burden[1]:

“Regulatory burden is essentially government burden. The burden of government is the intervention and interference of government in the operations of a business. … It is the cost involved in complying with regulatory requirements, collecting taxes and responding to information demands from government. And it is the administrative hurdles, the lack of customer service, the delays, the uncertainties and the frustration involved in dealing with public bureaucracy.”

From this perspective, regulation is at best a necessary evil; and at worst an unnecessary evil[2]—certainly not something one would wish upon oneself. But we chose to become a regulated profession nonetheless. Why?

One of the most straightforward answers to this question comes from an unlikely place—a Harvard Business Review blog post by Roger Martin, who was the Dean of the Rotman School of Management at the University of Toronto at the time[3].

“Many years ago, the consulting firm I worked for got the mandate to do a broad review of health discipline regulation. While one might think that the various medical professions would have lobbied the lead partner on the project to recommend excluding them from any regulatory burden, the exact opposite was the case.”

Martin expresses the business view well—regulation is something to be avoided; but he found that the exact opposite for many professions. He goes on to explain why.

“One after another, wannabe professions — from shiatsu massage therapists to mind-body-spirit healers — traipsed into our offices to argue for why they needed to be regulated. They all longed to be taken seriously and regulation was their ticket… And frankly, if a profession isn’t regulated, we pay almost no attention to it in any event.”

So the idea is that for professions, regulation means legitimacy and being taken seriously, and there really isn’t any substitute. Being regulated is the difference between being a ‘wannabe’ profession and being a real profession.  Given this quid-pro-quo, most fledgling professions wanting to be recognized as legitimate will pursue regulation (how many succeed is another matter, however).

Of course Martin’s analysis is made from the point of view of business, regulation is still a burden but for professions the benefits of being regulated outweigh the costs of being regulated.

There is also the difference between regulation and self-regulation. Self-regulation is a privilege that is accorded to professions.  Professions, because they are professions, are trusted by government to regulate their own profession in the public interest.  Self-regulation means that the government deems a profession and its members to be mature enough to self-regulate.  It also gives the professions more control over their destiny.

If there is going to be regulation, then self-regulation is better than government regulation.

There may also be more than just being taken seriously and being seen to have the maturity to manage one’s affairs as a profession at stake. There is a more cynical view as well.  Some sociologists who study the professions explain the desire for professional regulation as a simple matter of self-interest. Here the benefits of regulation are seen to be the ability to command a better price for professional services through market closure.  In fact the Competition Bureau of Canada continues to have the same concerns (even though the Bureau would itself be seen by business as part of the regulatory burden).  In December 2007, the Competition Bureau of Canada Self-regulated professions: Balancing regulation and competition[4] considered the issue.  This report reviewed the extant literature at the time which did support the conclusion that professions did profit from regulation.

More recently, in the US, the White House released a report Occupational Licensing: A Framework for Policymakers[5]. This report relates that estimates find that unlicensed workers earn 10 to 15 percent lower wages than licensed workers with similar levels of education, training, and experience.

It is interesting to find that business bloggers, sociologists, and even government agencies all see self-gain in the desire of occupations to be regulated.

A different perspective

There is another perspective however. Many writers, in listing the defining characteristics of the professions, include statements such as an ideology that asserts greater commitment to doing good work than to economic gain and to the quality rather than the economic efficiency of work[6],” “The service is for the public good[7],” or “A commitment to duty above self-interest or personal gain.[8]

Regulators share this idea of serving the public good. Indeed, most regulators have protection and promotion of the public interest as their primary object.  The ideology of service of the professions and the public interest mandate of regulators as sympathetic to each other.  That is why many professionals do not see regulation as entirely a burden.  Many professionals see the ‘burdens’ of regulation as another facet of this service ideal, not something to be avoided or minimized.

So we have various reasons why occupations pursue regulation, from legitimacy, to financial self-interest, to a common purpose in serving the public good. As with many endeavors, motivations are often complex and layered.

HRPA and the ‘R’ word

Although HRPA became a regulator back in 1990 with the passage of the Human Resources Professionals Association of Ontario Act, 1990; it took some time for HRPA to think of itself as a regulator.  To be fair, in the 1990 Act, the mention of regulation was somewhat buried.  It did not appear in the objects of the Association, but the section which enables the Board to pass by-laws.  In the 1990 Act, the Board was given the authority to pass by-laws “regulating and governing the conduct of members of the association in the practice of their profession, by prescribing a code of ethics, rules of professional conduct and standards of practice.”

In the 2013 public act which replaced our 1990 Act, the reference to regulation is clearer and up-front.  The first object of the Association now reads: to promote and protect the public interest by governing and regulating the practice of members of the Association and firms in accordance with this Act and the by-laws.”

There can no longer be any doubt—HRPA is a regulator. The interesting twist, however, is that because the Association is comprised of its members, every member of HRPA has become a regulator in a way.  Regulation is not something that the Association does to its members, it is something that the Association does on behalf of its members in fulfilment of a commitment all Associations members have made collectively to promote and protect the public interest.  Seen this way, regulation, regulator, and regulatory are not words to be avoided.

[1] www.ic.gc.ca/eic/site/061.nsf/eng/rd01339.html

[2] Although, after the financial meltdown of 2008, there was a lineup of economists, politicians, and others to praise regulation as the reason why the Canadian banking system weathered the storm so well.

[3] Martin, R. L. (2010, July 1). Management is not a profession — but it can be taught. Harvard Business Review. Retrieved July 16, 2015, from https://hbr.org/2010/07/management-is-not-a-profession.htm

[4] A copy of this report can be downloaded from http://www.competitionbureau.gc.ca/eic/site/cb-bc.nsf/vwapj/Professions-study-final-E.pdf/$FILE/Professions-study-final-E.pdf

[5] White House (July, 2015). Occupational Licensing: A Framework for Policymakers. Washington DC: https://www.whitehouse.gov/sites/default/files/docs/licensing_report_final_nonembargo.pdf.

[6] Freidson, E. (2001). Professionalism: The third logic. Cambridge, UK: Polity Press/Blackwell.

[7] Millerson, G. (1964). The qualifying associations: A study in professionalization. London: Routledge and Kegan Paul.

[8] Schultze, R. (2008).  What does it mean to be a self-governing regulated profession? Journal of Property Tax Assessment and Administration. 4(3), 41-53.

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