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Initial Takeaways from the 2021 Ethics and Compliance Hotline Benchmark Report

Now that the 2021 Ethics and Compliance Hotline Benchmark Report has been released, it is time to dig into the meat of the numbers and to put these metrics to use for your compliance program.

Haven’t had a chance to review our 2021 Ethics and Compliance Hotline Benchmark Report yet? Download it here!

Benchmarks Are a Key Part of Compliance Monitoring

It is essential for an effective program, as defined by the Federal Sentencing Guidelines, to utilize some form of monitoring as a routine self-assessment action. It is during this action that compliance officers will gain the most use from the Ethics and Compliance Benchmark Report. It’s time for the ruler to be pulled out, measurements taken, and compared with those set by the benchmark.

Reporting Rate of Ethics Hotline Increases

Despite the ravages of global pandemic, a surge of social unrest, a chaotic US presidential election, and murder hornets, the world of corporate compliance has weathered the storm. In times of chaos and change, it would be easy to throw away an organization’s values for the sake of keeping the ship stable and the benchmark numbers show that employees only grew more confident in their compliance and ethics hotlines, webforms, and other intake methods. The previous year’s benchmark indicated there was a reporting rate of 4.0 annual reports per 100 employees, but for 2021 this metric rose to 4.1 reports.

Compliance Hotlines and Web Reporting Rise in Use

With so many staff members made to work from home during the pandemic, it should come as no surprise that in-office/in-person reporting declined from 28% of total cases in 2019 to 19% in 2020. To make up for the loss, hotline use increased by 7% and web reporting rose by 1%.

Workplaces Investigations Taking Slightly Longer

The benchmark found that the case closure rate for reports in 2020 averaged at 25 days, which was up by 2 days since 2019. This increase is understandable given the difficulty in conducting investigations for compliance officers stuck working from home. Fortunately such impediments must have been resolvable given that the case closure increase was relatively small. In the larger breakdown of the numbers, 79.21% of cases were closed in under 30 days. And 10% took 31 to 60 days with a little over 10% taking more than 61 days. Monitoring one’s issue closure time is crucial for keeping regulatory and legal risks from getting out of control.

Decline in Anonymous Reporting of Concerns

Report anonymity is an important piece of data for companies to evaluate the level of trust reporters feel for their superiors. If you receive a high number of anonymous reports, this could signal a low level of trust. However, even in the most ethical workplaces, some issues will only be reported anonymously; therefore, having more than 60% of reports being anonymous is the threshold for concern. In 2020, the anonymous reporting rate dropped to 32.03%, whereas in 2019 it was 35.63%.

Energy Industry has Highest Rate of Anonymous Reporting

The by-sector breakdown shows some interesting insights into anonymous reporting across multiple industries. The healthcare and financial sectors saw a healthy 30.68% and 33.25% anonymity rate respectively, with the tech and telecom industries right behind. The energy sector had the highest rate of anonymity at 50.13% of reports; however, it should be noted this is a significant decline from the unhealthy 63% rate it held in 2019.

Compliance Investigations End in Fewer Substantiated Reports

In 2019, workplace investigations revealed 64.22% of reported concerns were accurate and in 2018 that number was 63.22%. This suddenly dropped in 2020 to 57.15%. It is hard to say the reason, but it is most likely the 8% decline was attributable to the drop of in-office/in-person intake. It will take another year to determine if this drop will continue into 2021.

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