Compliance is the process of making sure the employees at your organization are trained on the policies, standards, state and federal laws that apply to the business. Employee compliance violations can take a serious toll on your organization. In this blog, we will discuss the risks of non-compliance and how your organization can work to minimize these risks with comprehensive training programs.
Financial Costs and Legal Consequences
Although research shows that employee compliance training is the biggest priority for learning and development, Brandon Hall Group reports that only 40% of organizations are prepared for compliance audits. The apparent gap here can cause enormous financial burdens for an organization. Fines, penalties, and settlement costs due to employee compliance violations can cost an organization millions of dollars, forcing some into bankruptcy. For example, a HIPPA compliance violation fine can cost up to $50,000 per violation, and up to $1,500,000 per violation category, per year. And this is only a small part of an organization’s potential compliance requirements. Compliance violations can also impact stock prices and sales. When an executive steps down from their position due to violations, allegations, or criminal charges, stock prices and sales are almost guaranteed to tumble.
Compliance violations don’t go unnoticed. Allegations and lawsuits against companies can be found at the top of the headlines and can severely damage their reputation and employer brand. Widely publicized scandals cause customers and clients to lose trust in the company and products or services. It can also make it difficult for the employer to attract top talent. A damaged reputation ultimately affects the organization’s bottom line.
How to Combat Employee Compliance Violations
Organizations need an organized and systemic approach to employee compliance training. Not only does your compliance program need to be content rich, but it also needs to be engaging. User experience should be a top priority when designing training assets. The more engaging it is, the more likely your learners will retain the information.
With advancements in HR technology, systems like Expectancy make it easy to automatically assign training modules to employees, track progress, comprehension and completion rates. It is important to regularly assess the effectiveness of a training program through the comprehensive analytics provided. This makes it easy for administrators to spot content gaps and potential risk areas. Policies and laws are always changing, which means it is also essential for your organization to choose a training platform that will allow you to make changes quickly. Systems like Expectancy make it easy to inform learners of these changes and schedule annual recertifications.
Communicating the importance of employee compliance training is vital. Make sure your learners know that your compliance program is not just about ensuring the company doesn’t lose money over violations, but that the program will help make the organization safer and healthier for everyone.
When an organization has a robust compliance training program, employees are more likely to recognize and report non-compliance. Compliant employees protect your organization’s image and have a positive influence on the organization’s goals. If an organization does face a lawsuit, having evidence of a comprehensive employee compliance training program will help the case in court. According to the Rutgers School of Law, “an organization that has made a robust effort to prevent and detect violations of the law by its employees and others acting for it will be treated less harshly than one that was indifferent to complying with the law.”
Although training programs may seem costly to implement, it can end up saving your organization. The risks of employee compliance violations cannot be ignored!