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What’s the Point of Compliance Training?
17 November 2023
Compliance training is essential for organizations to educate employees on legal and ethical standards, mitigate liabilities, and reinforce organizational values. Despite challenges with costs and impact, solutions like e-learning and LMSs offer effective and engaging ways to deliver this vital compliance training.
Compliance training ensures employees are educated on the laws, regulations, and company policies that apply to their day-to-day job responsibilities. It serves as a means to mitigate risk and foster a culture of integrity and professionalism within an organization.
Compliance training has many benefits, contributing significantly to an organization’s overall well-being by mitigating risks. Conversely, compliance training can present certain challenges, such as keeping training current and engaging and effectively disseminating it across various roles within the organization.
Understanding the significance of compliance training is the first step toward picking the right solution. Providers like Techinnov make online training easy for organizations by creating personalized and professional learning management systems (LMS) that generate high-impact results for both learners and supervisors.
Let’s dive deeper into the importance of compliance training, the challenges managers should be prepared for, and finally, strategies for how managers can make training more efficient.
Why Compliance Training Is Important
A Corporate Nightmare
A healthcare company recently faced severe penalties after reports revealed that its employees consistently violated patient privacy regulations, leading to accidental breaches of sensitive patient data and even resulting in a few incidents of attempted fraud.
An internal audit revealed that employees were not knowledgeable about privacy regulations despite policies in the employee handbook and training material available. Additionally, safeguards in place were ignored and not enforced.
The lack of proper compliance training and inadequate oversight of standards resulted in the healthcare provider losing trust among its patients, suffering damage to their image and reputation, and resulting in costly regulatory action and penalties.
A Critical Investment
The example above is a nightmare for organizations and demonstrates how much is on the line regarding compliance and standards. Organizations simply cannot afford to forego compliance training, and they definitely cannot afford to waste money on poorly executed and ineffective training solutions.
While the employees in the example hold some responsibility, the problem ultimately indicates a broader systematic failure among the organization’s management and structure. This is a failure not just to provide training and policies (the company had both) but to ensure that training is effective and that employees’ skills are tracked and managed.
The Benefits of Compliance Training
Let’s break down exactly why compliance is essential and explore the benefits. This includes:
- Mitigating risks in safety, security, liability and reputational damage
- Proactively communicates organizational standards and culture
Decrease Risks
Breakdowns in compliance and controls put your organization at risk on a number of fronts. Should an incident or damage occur, the consequences can compound quickly. Not only do operations suffer from an event itself, but that event can then snowball into reputational damage and lawsuits.
Decreasing and preventing the likelihood of these events occurring is an organization’s ethical responsibility as much as it is in its own interests to remain profitable.
Workplace hazards
Workplace hazards present a significant risk in many industries, particularly those involving manual labour, chemicals, or specialized machinery. Inadequate compliance training can lead to accidents and injuries, resulting in harm to employees, costly work stoppages, and insurance claims.
For instance, in the manufacturing sector, a well-trained workforce is the frontline defence against operational accidents. Compliance training in safety protocols and equipment use is not just a regulatory formality—it is essential for preserving the health and well-being of employees and ensuring uninterrupted business operations.
Data Security
As organizations have increasingly decentralized and adopted hybrid and remote work environments, data risks from inadequate controls have become a serious concern.
According to a Compliance Risk Study by Accenture, respondents in banking, health and public services, insurance, and software and platforms cited cybersecurity as one of the top compliance challenges they face today.
Compliance training is essential to ensure employees do not expose confidential data and private assets to unauthorized and even malicious sources. The consequences of a data breach can range from financial extortion to class action lawsuits.
Lawsuits
When there are deficiencies in compliance training and controls, your organization can be found liable for hundreds of thousands of dollars in damages — even millions in some cases.
Lawsuits can originate from breakdowns in workplace safety, employees violating codes of conduct on discrimination and harassment, and security failures.
Penalties
Penalties for non-compliance can be severe, ranging from monetary fines to restrictions on business activities and, in extreme cases, complete shutdowns. Regulatory bodies are increasingly imposing stringent penalties to enforce compliance.
For example, violations of environmental regulations can lead to fines that strain financial resources and require extensive remediation efforts, which can further escalate costs and disrupt business.
Brand Damage
Brand Damage is an often underestimated consequence of non-compliance. Consumer and business trust is hard-earned and easily lost. News of non-compliance can spread rapidly, causing lasting damage to a company’s reputation and resulting in lost partnerships and future opportunities.
For example, if a company is found to be non-compliant with labour laws or environmental standards, public perception can shift quickly, leading to a loss of customers and partners and a decline in shareholder values.
Establish Organizational Standards
Compliance training does more than just prevent negative outcomes — it actively contributes to the positive development of an organization by establishing and reinforcing its standards. This alignment is critical for maintaining the quality and consistency of services and products, fostering a positive workplace culture, and reinforcing the brand’s identity.
Quality Control
Your organization must control the quality of services and products to build trust with consumers and shareholders. It also must ensure employees are efficient so as to minimize wasted time and materials. Efficiency begins and is maintained through compliance training.
Training communicates and educates clear guidelines for employees to follow, including regulatory and internal standards. This means employees work according to the law but also to a brand’s expectations of quality and service.
Fostering Workplace Culture
A well-executed compliance training program will develop a positive workplace culture. Training instills corporate values and vision, creating a sense of shared responsibility, purpose, and mutual respect among employees.
For instance, a company providing ongoing anti-harassment and diversity training as part of its compliance program helps create an inclusive environment where all employees feel valued and empowered. This kind of culture attracts and retains talent by promoting a safe and respectful workplace.
Reinforce Brand Identity
Compliance training reinforces a company’s brand identity. When an employee “buys in” and understands the ethos of the brand’s core values and public commitments, a synergy is created.
For example, a sustainable clothing brand may train its employees in environmental compliance and ethical sourcing practices. This training reinforces the brand’s identity as eco-conscious.
Alignment between employee actions and brand messaging strengthens brand credibility and authenticity in the eyes of consumers, which is vital for long-term brand loyalty.
What to Know About Compliance Training
If compliance training were easy, every organization would take full advantage of it. However, while invaluable, it comes with its own set of challenges that organizations must navigate.
As most supervisors likely understand, compliance training is time-consuming, expensive, confusing, and difficult to get employees excited about.
Time-consuming
Implementing a comprehensive compliance training program often requires a significant time investment both by managers and employees. Employees must be removed from their daily tasks to complete training modules. Those modules must also stay current with changing laws and regulations, which can consume more time in development and updates.
Expensive
As mentioned, compliance training comes with costs and maintenance — especially if starting from scratch. However, neglecting compliance is much more expensive.
According to a 2017 study by Fortra, while compliance is expensive, non-compliance is roughly three times more costly. Per Fortra, in 2017, the average cost of compliance activities for multinational organizations was more than $5 million, while the average cost for organizations that experience non-compliance problems was nearly $15 million.
Clarity
Legal language and the nuances of regulations can be complex and make it challenging to create clear and understandable training materials. If training is not presented in an accessible way, it can lead to misunderstandings, lost impact, and even more non-compliance.
For instance, if a company releases a new data protection training module filled with legal jargon, employees may need clarification about how to apply the rules in their day-to-day work.
Employee engagement
Engaging employees in compliance training is often difficult. Many employees default to viewing compliance training as a check-the-box necessity and, ultimately, a waste of time. When training is poorly designed and fails to engage employees efficiently, it does not produce the desired results.
Employees taking compliance training on workplace harassment might retain less information sitting through a lecture on the subject than =if they were provided a straightforward training module with a questionnaire.
More often, effective compliance training depends more on presentation strategy than on employees’ aptitude.
Launching An Online Compliance Training Program
Compliance training through an online learning management system (LMS) saves time and money, opens new opportunities for efficiency, and allows managers to track performance easily.
Time and Cost Savings
E-learning platforms significantly reduce the time and expenses involved by allowing employees to complete training at their own pace and eliminating the need for physical training spaces and printed materials. It also makes publishing training material faster and easier to update when required. For example, an e-learning module can be updated quickly and rolled out immediately to all employees globally.
Improved Efficiency
Employees are more likely to engage with interactive content that can apply directly to their job roles.
E-learning can incorporate interactive elements, such as real-time assessments, that ensure comprehension of complex regulations in an engaging format and with immediate feedback.
Online training platforms are also revolutionizing employee engagement with compliance through AI, machine learning, and gamification. These tools can transform mundane compliance topics into engaging and personalized training experiences.
Track and Improve Compliance
An LMS provides real-time data tracking and performance statistics to manage and supervise the training process easily. Modular data can create a feedback loop for trainers to improve and sharpen training content continually.
Partner with Techinnov
Techinnov helps organizations build, design, and manage professional online learning management systems, tailored to streamline compliance training. Our innovative approach equips training teams with real-time tracking and insightful, data-driven improvements.
Transform your compliance training into an engaging and efficient experience. Take the first step towards a smarter learning strategy with Techinnov today.
Frequently Asked Questions
What is Compliance Training?
Compliance training educates employees on relevant laws, regulations, and company policies to ensure their activities align with legal and ethical standards. It covers topics like workplace safety, data privacy, and anti-discrimination, aiming to mitigate risk and maintain organizational integrity.
Transform your compliance training into an engaging and efficient experience. Take the first step towards a smarter learning strategy with Techinnov today.
How do you make compliance training effective?
To make compliance training effective, tailor it to the specific roles and needs within the organization, use engaging and interactive formats, and ensure the material is clear and up-to-date. Incorporating real-life scenarios and regularly assessing its impact through feedback and tests are also crucial to maintaining its relevance and effectiveness.
Transform your compliance training into an engaging and efficient experience. Take the first step towards a smarter learning strategy with Techinnov today.
How can I improve my compliance?
To improve compliance, consider adopting e-learning platforms that offer customized, interactive training modules tailored to your specific compliance needs. These platforms enable efficient tracking and assessment of employee progress, ensuring that training is more engaging and effectively addresses your organization’s unique compliance challenges.
How do you create an effective compliance program?
To create an effective compliance program, leverage e-learning to develop customized, interactive training modules that are easily accessible and tailored to your organization’s specific compliance needs. Utilize the analytics and tracking features of e-learning platforms to monitor engagement and understanding and regularly update the content to reflect current regulations and best practices.
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