Compliance is a legal necessity and critical for a company’s longevity. Regulations, industry standards, and best practices are constantly changing, making continuous compliance training necessary.
Continuous Compliance Training In Action
Here are areas where continuous compliance training helps:
Risk Mitigation
Responsible parties may be subject to substantial legal penalties, financial losses, and even imprisonment for non-compliance. Continuous training ensures that all employees, especially those in decision-making roles, know the latest requirements.
Failing to keep up with industry standards can result in operational hiccups, including license revocations or shutdowns mandated by the local or federal government. Training helps prevent such disruptions, ensuring the company meets the latest regulations.
In 2010, British Petroleum’s Deepwater Horizon oil rig explosion resulted in one of the worst environmental disasters in history. Upon investigation, BP had to re-evaluate its safety and environmental training.
The disaster — which the company could have prevented with continuous compliance training — caused BP to shut down the oil rig for repairs, pay millions of dollars in damages, and lose income for the duration of the repairs.
Following the disaster, the company invested heavily in training to ensure such an incident would not reoccur. They focused on rigorous safety standards, environmental protection, and crisis response training.
Protecting Corporate Reputation
Investors, partners, and other stakeholders are more likely to trust companies with an established compliance culture. Such trust can translate into sustained investments, fruitful partnerships, and business growth.
Any non-compliance can tarnish an organization’s public image. Companies that practice continuous compliance training can prevent such incidents and enjoy a more favorable public perception.
For example, in 2016, Wells Fargo faced a scandal where employees created millions of unauthorized bank accounts. This malpractice resulted from an aggressive sales culture without effective compliance oversight.
However, aside from the financial losses, the biggest effect was on the company’s reputation. Prospective clients hesitated to open an account with Wells Fargo, and some existing clients switched to another bank after the scandal.
The company invested in comprehensive compliance training programs, reshaped its corporate culture, implemented rigorous checks and balances. These practices ensured that employees at all levels understood the importance of ethical behavior and knew the regulations and standards guiding their roles.
Enhancing Employee Skill Sets
Continuous compliance training gives employees confidence in their daily tasks and decision-making processes. Such training often overlaps with areas like ethical decision-making, best practices, and soft skills. This builds a company culture centered around development and enhances the overall skill set of the workforce.
In 2018, a Starbucks in Philadelphia had an incident involving two black men who were arrested. The men were victims of racial profiling and discrimination, as employees reported them to the police for not ordering anything from the store. They began sensitivity training to demonstrate how important it is for employees to enhance their soft skills.
Starbucks closed over 8,000 U.S. stores to conduct racial-bias education to prevent discrimination. This showed the company’s commitment to continuous training, ensuring its staff understood and practiced the principles of diversity, inclusion, and equity.
Financial Benefits
Organizations can save substantial amounts that might otherwise be paid as fines or penalties by remaining compliant. Well-trained employees can lead to streamlined operations, less time correcting mistakes, and reduced resource wastage. For example, non-compliance with the General Data Protection Regulation can cost up to 4% of a company’s global revenue.
Experts predict cybercrime will cost companies worldwide $10.5 trillion by the end of 2025, mostly due to more sophisticated phishing attacks and malware. Continuous compliance training can help ensure companies do not incur any losses because of cyber-attacks.
Boosting Customer and Client Trust
Customers and clients prefer organizations that adhere to industry standards and regulations, as this adherence often signals quality, reliability, and integrity. Continuous compliance demonstrates a company’s commitment and consistency, which can foster long-term relationships with customers and ensure recurring revenue streams.
Volkswagen admitted in 2015 to cheating on air quality tests using software installed in up to 11 million cars worldwide to deceive emission testing mechanisms. This caused the company’s shares to drop by around 40% in the two weeks after the scandal.
In response, Volkswagen introduced continuous compliance training, focusing on ethical decision-making, adherence to environmental regulations, and building a culture of transparency and integrity.
An Investment In The Company’s Future
Continuous compliance training is not just a tick-the-box exercise for modern organizations but a strategic move that offers multiple benefits. It fortifies organizations against risks, enhances their public image, empowers employees, and fosters trust among clients and stakeholders. Given their advantages, the costs associated with such training are a worthy investment.