2014 Ethics & Compliance Training Benchmark Report

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Our full 30+ page report contains findings and analysis from a survey administered to 750+ training professionals in Ethics, Compliance, HR, Legal, and Training roles. The report emphasizes three key areas:

1. The State of Ethics and Compliance Training
2. Benchmarking Ethics and Compliance Training
3. Key Training Trends

Learn what top organizations are doing to cover more risk areas, to improve training effectiveness, and measure the success of their programs.

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2014 Ethics & Compliance Training Benchmark Report

  1. 1. +1 866 297 0224 | INFO@NAVEXGLOBAL.COM | WWW.NAVEXGLOBAL.COM Data and Analysis to Enhance Your Training Program’s Effectiveness NAVEX Global’s 2014 Ethics and Compliance Training Benchmark Report July 2014 PREPARED BY: Mary Bennett, R.Ph. Vice President, Advisory Services, NAVEX Global Ingrid Fredeen, J.D, Vice President, Advisory Services, NAVEX Global
  2. 2. © 2014 NAVEX GLOBAL, INC. ALL RIGHTS RESERVED. 2014 NAVEX Global Ethics and Compliance Hotline Benchmark Report 2 TABLE OF CONTENTS I. Introduction II. Survey Respondent Profile III. Executive Summary IV. Key Findings A. The State of Ethics & Compliance Training Today 1. Ethics & Compliance Training Objectives 2. Training Challenges & Barriers 3. Overall Program Outlook 4. Program Gaps Persist • Supervisor Training • Non-Supervisory Employee Training B. Benchmarking Ethics & Compliance Training 1. Training Hours • Number of Hours Per Employee Role • Number of Courses Offered Annually Per Employee Role 2. Training Topics 3. Training Formats C. The Future of Ethics & Compliance Training 1. Overall Training Trends 2. Focusing on Quality and Effectiveness 3. Doing More With Less 4. Measuring Effectiveness V. Conclusion & Key Takeaways VI. About the Authors & NAVEX Global
  3. 3. © 2014 NAVEX GLOBAL, INC. ALL RIGHTS RESERVED. NAVEX Global’s 2014 Ethics and Compliance Training Benchmark Report 3 I. INTRODUCTION In early 2014, NAVEX Global partnered with an independent research agency to survey ethics and compliance professionals with responsibility for administering training across their organizations. The purpose of the survey was to provide the industry with data on an overlooked area of research: benchmarking the top priorities and challenges in disseminating ethics and compliance-focused training. The findings discussed represent responses from more than 750 key decision-makers and individuals responsible for ethics and compliance programs. (See respondent profile in the next section for additional details.) This report provides the most compelling results, providing insights on such questions as: −− How much ethics and compliance-focused training are organizations doing? −− What training methods are being used? −− Are compliance professionals satisfied with their training programs? −− How is program effectiveness being measured? −− How will training programs evolve in the future? How To Use This Report Training accounts for the largest percentage of ethics and compliance program budgets1 , and is one of the key elements of an ethics and compliance program. Learning what your peers are doing is essential in helping you evaluate your program in a broader context. It may also reveal areas where your program may need to grow or evolve. We hope you will find this data useful—and that it will provide both inspiration and motivation to make your ethics and compliance training program even more effective. 1. NAVEX Global Research, 2014 Key Trends for Ethics and Compliance Planning
  4. 4. ©2014 NAVEX GLOBAL ALL RIGHTS RESERVED. 2014 NAVEX Global Ethics and Compliance Hotline Benchmark Report 4 2 1 4 3 6 5 8 7 10 9 Healthcare Providers Energy & Utilities Government Banking & Financial Services Manufacturing Insurance Non Profit Higher Education Healthcare Products Retail & Leisure Decision-Maker Non-Decision Maker No Compliance Training Responsibilities Other Ethics & Compliance Human Resources/Employee Relations Training/Learning and Development Legal Small: <500 Employees Medium: 500-5000 Employees Large: 5000+ Employees Training Decision Maker Status Job Function Company Size Geography of Headquarters Other C-Level Senior Management Non-Management Management Job Function Other Top 10 Industries CANADA USA88% EMEA7% APAC3% LATAM 1% 1% SURVEY RESPONDENT PROFILE 35% 52% 5% 8% 42% 29% 12% 10% 7% 6% 5% 48% 22% 19% 37% 32% 31% 39INDUSTRIES REPRESENTED =763
  5. 5. © 2014 NAVEX GLOBAL, INC. ALL RIGHTS RESERVED. NAVEX Global’s 2014 Ethics and Compliance Training Benchmark Report 5 III. EXECUTIVE SUMMARY Benchmarking your training program is key to understanding your program’s performance, and making improvements. The NAVEX Global 2014 Training Benchmark Survey reveals important trends and insights that will help you critically evaluate your own training program today and make key decisions that will shape the future of your program. Because training programs are a critical part of an effective compliance program, they will continue to be exposed to increased pressure to demonstrate strong results. Survey data revealed the top objectives, pain points and training program strategies for ethics & compliance professionals across many industries. The following key themes emerged: −− Culture Prevailing Over Defensibility as Main Objective: Respondents identified their top objective as “creating a culture of ethics and respect.” This is an important program evolution that signals a broader awareness of the need to help employees understand what it means to act ethically and with integrity—and a realization that desired compliance behaviors often flow from a culture of ethics and integrity. But creating a culture of ethics and respect tends to require greater investment of time and resources than “complying with laws and regulations”—the second most-cited objective. −− Time, Money and Measurement are the Top Challenges: While respondents noted many different program challenges, those that emerged as the most significant were available seat time, budget, and measuring program effectiveness. To meet these challenges, organizations will need to adopt new training approaches and establish performance metrics. −− Significant Concerns and Program Gaps Remain: Most respondents reported, overall, that their employees are getting the training they need. However, when asked more specifically about particular audience groups, respondents revealed significant concerns about the effectiveness of their training efforts. −− Diversification of Training Formats: Respondents are using a wide variety of training formats to reach and engage their key audiences, with six being the average number of formats used in a single curriculum. −− Quality is Key to Training Effectiveness: Respondents believe that high quality training is essential for training that truly engages. As organizations strive to build ethical cultures and change employee behaviors, a focus on quality will become increasingly important. Quality is key to effectiveness, with some instructional formats and approaches receiving higher marks in effectiveness than others. −− The Rise of Short-Form Training: Covering more risk areas with limited training hours and pressured budgets is a significant priority for survey respondents. A growing number are working to accomplish this through short-form training. In general, for most respondents, “good enough” is no longer enough when it comes to the most significant spend of an ethics & compliance budget. As training program goals move beyond compliance and towards focusing on a culture of ethics and respect, more pressure will be placed on using training to drive behavioral change, not only to help build legal defenses. With more ambitious training objectives and a rapidly-evolving industry landscape, compliance professionals need to ensure that their programs are keeping pace with the rate of change. By taking a fresh approach and building training programs that are mapped to risks and audiences, training can become a much more effective tool in protecting an organization’s people, reputation and bottom line.
  6. 6. THE STATE OF ETHICS & COMPLIANCE TRAINING TODAY
  7. 7. IV. KEY FINDINGS The State of Ethics & Compliance Training Today © 2014 NAVEX GLOBAL, INC. ALL RIGHTS RESERVED. NAVEX Global’s 2014 Ethics and Compliance Training Benchmark Report 7 1) Ethics & Compliance Training Objectives FINDINGS: Ninety percent of survey respondents cited their top ethics and compliance training objective as “Create a culture of ethics and respect.” This is closely followed by “complying with laws and regulations” (89 percent) and “preventing future issues or misconduct” (82 percent). Top Ethics and Compliance Training Objectives ANALYSIS: Once focused almost exclusively on establishing important legal defenses, the new top priority for compliance training is building an ethical culture. This trend is true even among ethics and compliance and legal job titles that have traditionally been more focused on program defensibility. Increasing Awareness of Training’s Impact on Corporate Culture This is an important change within the field, pointing to an increasing awareness of the impact of strong compliance training curricula on building and sustaining an ethical corporate culture. However, it also points to a major challenge for ethics and compliance professionals. “Check-the-box” training will not help organizations achieve the culture and behavior change goals they are clearly chasing. In fact, outmoded training can backfire by increasing employee cynicism. Bland training programs that are neither relevant nor engaging will not close the gap. High-quality, engaging training must become the norm (not the exception) and must be combined with other elements of a holistic and robust compliance program designed to pursue these important goals. 0 20 40 60 80 100 90% 89% 82% 37% 45% 54% 37% 30% 18% 3% Top Ethics and Compliance Training Objectives Create A Culture Of Ethics & Respect Comply With Laws & Regulations Prevent Future Issues Or Misconduct Meet Audit Or Certification Requirements Address Existing Issues Or Misconduct Improve The Organization’s Reputation Reduce Litigation Establish Strong Legal Defenses Respond To Penalties Or Sanctions Other 94% of decision-makers rate their commitment to creating a as their most important objective for trainingCulture of Ethics and Respect
  8. 8. IV. KEY FINDINGS The State of Ethics & Compliance Training Today © 2014 NAVEX GLOBAL, INC. ALL RIGHTS RESERVED. NAVEX Global’s 2014 Ethics and Compliance Training Benchmark Report 8 2) Training Challenges & Barriers FINDINGS: Over half of respondents (56 percent) cite seat time constraints as a major challenge to ethics and compliance training. A close second are difficulties measuring the effectiveness of programs (54 percent). Top Ethics and Compliance Training Concerns and Challenges ANALYSIS: Dealing with the constraints of time, money and measurement are perpetual difficulties for ethics and compliance professionals. The pressure to increase effectiveness despite these challenges has increased as programs have moved into second and third generation phases, and regulators have become savvier at detecting check-the-box programs. Better Measurement, New Strategies Will Help Alleviate Top Concerns As compliance professionals’ ability to measure program effectiveness improves, decision-makers will be better able to determine if their investments are working—and where additional resources are needed to meet goals. One strategy organizations are increasingly exploring to help overcome time and money obstacles is to employ short-from or “burst learning” training, which allows them to cover additional topics in less time, and at a lower cost, as well as refresh training more frequently. 0 20 40 60 80 100 56% nd Compliance Training Concerns and Challenges 10%35% 54% 6%42% 42% 14%44% 41% 13%46% 31% 15%54% 23% 10%67% 23% 18%59% 19% 24%57% 18% 36%46% 17% 22%62% 16% 57%27% Significant Challenge Moderate Challenge Not A Challenge Limited Hours Available For Training Measuring Effectiveness Not Enough Budget Difficulty Covering All Of The Topics Important To Our Organization Training Content Is Growing Old/Stale Training Not Effective At Changing Attitudes Or Behavior Training Content Is Low Quality/Unengaging Training Content Is Not Relevant To Our Audience Difficulty Tracking And Reporting Training Completion Employees Respond Negatively To Training Limited Applicability Of Training Content Outside The United States Note: Numbers may not add to 100 percent due to rounding.
  9. 9. IV. KEY FINDINGS The State of Ethics & Compliance Training Today © 2014 NAVEX GLOBAL, INC. ALL RIGHTS RESERVED. NAVEX Global’s 2014 Ethics and Compliance Training Benchmark Report 9 3) Overall Program Outlook FINDINGS: When asked about their outlook for their organization’s training program, 75 percent of respondents either “agreed” or “strongly agreed” that “each employee receives the ethics and compliance training they need to safeguard our people, reputation and bottom line.” Ethics & Compliance Training Program Outlook Each employee in our organization receives the ethics and compliance training they need to safeguard our people, reputation and bottom line. ANALYSIS: The overwhelming majority of respondents appear to believe that their programs are on the right track. However, additional data collected in our survey (see next section) suggests a startling disconnect between how training professionals feel about their programs in general, and concerns about training adequacy for specific audiences. A Critical Eye and Commitment to Continuous Improvement are Crucial for Achieving Program Effectiveness The existence of this gap suggests that organizations should not find comfort in their overall impression of their program. Instead, they must be more critical of individual program elements and be willing to challenge their own organizational norms when it comes to training. They must also be willing to continuously improve programs. For organizations that have internally developed training or have not changed training formats for many years, an outside advisor should periodically review training programs. Organizations should also pay close attention to the areas of moderate concern, which predominantly relate to poor quality courses and ineffective methods. Unless these concerns are addressed, efforts to achieve important training goals will be ineffective. Each employee in our organization receives the training they need to safeguard our people, reputation an Agree Neutral Disagree 0 10 20 30 40 50 60 70 80 75% 12% 13% Ethics and Compliance Training Program Outlook Strongly Agree Somewhat Agree Strongly Disagree Somewhat Disagree
  10. 10. IV. KEY FINDINGS The State of Ethics & Compliance Training Today © 2014 NAVEX GLOBAL, INC. ALL RIGHTS RESERVED. NAVEX Global’s 2014 Ethics and Compliance Training Benchmark Report 10 4) Program Gaps Persist FINDINGS: When asked to provide details about the effectiveness of training specific audiences, respondents revealed some startling concerns that contradict their otherwise positive attitudes about the effectiveness of their training programs overall. Fifty-four percent of respondents say they are concerned that their supervisors are not receiving adequate training, and nearly 30 percent of respondents have the same concerns related to the amount of training they are providing to non-supervisory employees. When we drill down into the concerns of specific stakeholders, we find additional insight. Supervisor Training Respondents said that, despite the training program in place, it is either a “major” or “significant” concern that supervisors are at risk of: −− Not receiving adequate training so they understand how to avoid missteps (54 percent) −− Mishandling or downplaying complaints or reports from employees (46 percent) −− Demonstrating attitudes or conduct not reflective of our commitment to ethics and compliance (38 percent) Areas of moderate concern represent significant warning signs that only reinforce the importance of focusing on managers in the next several training cycles. Top Ethics and Compliance Conduct Risks for Supervisors Respondents were asked to rate their level of concern about the following risks facing the supervisors in their organizations: Not receiving adequate training to help avoid missteps Mishandling or downplaying complaints or reports from employees Exhibiting attitudes or conduct that undermines our commitment to ethics and compliance Exerting or giving in to pressure to compromise standards to achieve business results Retaliation (mistreating or taking action against an employee after a report is made) Ethics and compliance is not strongly backed by senior leaders Discriminatory hiring, firing or performance management decisions 0 20 40 60 80 100 Significant Concern Moderate Concern Not A Concern 46% 54% 38% 35% 33% 27% 27% 41% 41% 50% 50% 48% 40% 52% 13% 6% 12% 16% 19% 32% 20% Not Receiving Adequate Training To Help Avoid Missteps Mishandling Or Downplaying Complaints Or Reports From Employees Exhibiting Attitudes Or Conduct That Undermine Our Commitment To Ethics And Compliance Exerting Or Giving In To Pressure To Compromise Standards To Achieve Business Results Retaliation (Mistreating Or Taking Action Against An Employee After A Report Is Made) Ethics And Compliance Not Strongly Backed By Senior Leaders Discriminatory Hiring, Firing Or Performance Management Decisions Note: Numbers may not add to 100 percent due to rounding.
  11. 11. IV. KEY FINDINGS The State of Ethics & Compliance Training Today © 2014 NAVEX GLOBAL, INC. ALL RIGHTS RESERVED. NAVEX Global’s 2014 Ethics and Compliance Training Benchmark Report 11 4) Program Gaps Persist (continued) Non-Supervisory Employee Training Sixty-two percent of respondents are satisfied with the training they provide to non-supervisory employees—regardless of whether they deliver a lot of training or very little. However, 29 percent of respondents are concerned about the amount of training they provide to non-supervisory employees. Non-Supervisory Employee Training Levels ANALYSIS: Supervisors and managers are the daily interface with the employees who form the foundation of an organization. In today’s highly complex and heavily regulated business environment, arming managers with the skills they need to navigate the ethics and compliance challenges they will inevitably face is critical. As the numbers reveal, there is significant concern about whether managers are equipped to properly support the culture—and whether they will inappropriately downplay complaints. Organizations must quickly identify manager training gaps and focus on addressing them in the coming training cycle. Organizations must also evaluate the training they are providing to non-supervisory employees. Employees on the frontlines are often the first to see many forms of misconduct. It is crucial that they understand the behavior that aligns with the organization’s standards, can recognize misconduct and know how to report violations. Educated Employees are the Foundation of a Strong Ethics and Compliance Program Poorly and inadequately trained employees will undermine an organization’s attempts to achieve the most important goals of the training program: creating a culture of ethics and respect and complying with laws and regulations. By evaluating the content of their training, ensuring that the messaging is appropriate, and making choices that maximize budget and protect precious seat time, organizations can more effectively reach all employees without negatively impacting budgets or available training time. 12% 50% 25% 2% 11% Other We Provide Very Little Training To Employees Adequate Training Provided Inadequate Training Provided We Offer Very Little Training To Employees We Provide Significant Training to Employees We Can’t Afford To Provide Training To Non-Supervisory Employees
  12. 12. BENCHMARKING ETHICS & COMPLIANCE TRAINING
  13. 13. © 2014 NAVEX GLOBAL, INC. ALL RIGHTS RESERVED. NAVEX Global’s 2014 Ethics and Compliance Training Benchmark Report 13 IV. KEY FINDINGS Benchmarking Ethics & Compliance Training 1) Training Hours Number of Hours Per Employee Role FINDINGS: On average, organizations provide employee groups six hours of compliance training annually, and 76 percent of organizations are deploying five or fewer hours of training annually. Board members and third parties receive even less training than employees. However, a look at median values reveals that most organizations offer even fewer training hours than the averages suggest. The median organization deploys just two to three hours of training to employee groups annually, with board members receiving one hour and third parties receiving no training. Hours of Training Delivered Annually: Employee Groups 0 10 20 30 40 50 60 70 Hours of Training Delivered Annually O Hours 1 - 5 Hours 6 - 10 Hours 11 - 25 Hours 25 Plus Hours Senior Leaders (n=525) Middle Managers (n=530) 0 10 20 30 40 50 60 70 O Hours 1 - 5 Hours 6 - 10 Hours 11 - 25 Hours 25 Plus Hours Employee Groups 0 10 O Hours 1 - 5 Hours 6 - 10 Hours 11 - 25 Hours 25 Plus Hours Non-Ma 8% 68% 13% 7% 4% 5% 68% 14% 9% 4% 7 7 5% 1 12 middle 80% range = 1 - 12 Hours 5.83 Average 1 15 middle 80% range = 1 - 15 Hours 6.32 Average 1 5.98 Average 2.0 Median 3.0 Median 3.0 Median 0 10 20 30 40 50 60 70 Hours of Training Delivered Annually O Hours 1 - 5 Hours 6 - 10 Hours 11 - 25 Hours 25 Plus Hours Senior Leaders (n=525) Middle Managers (n=530) 0 10 20 30 40 50 60 70 O Hours 1 - 5 Hours 6 - 10 Hours 11 - 25 Hours 25 Plus Hours Employee Groups O H 1 - 5 6 - 1 11 - 25 P 8% 68% 13% 7% 4% 5% 68% 14% 9% 4% 1 12 middle 80% range = 1 - 12 Hours 5.83 Average 1 15 middle 80% range = 1 - 15 Hours 6.32 Average 1 3.0 Median 3.0 Median Middle Managers (n=530) 0 10 20 30 40 50 60 70 0 10 20 30 40 50 60 70 O Hours 1 - 5 Hours 6 - 10 Hours 11 - 25 Hours 25 Plus Hours Non-Managers (n=532) 5% 68% 14% 9% 4% 7% 69% 12% 7% 5% 15 middle 80% range = 1 - 15 Hours 6.32 Average 1 15 middle 80% range = 1 - 15 Hours 5.98 Average 2.0 Median On average, small organizations deliver three more hours of training annually than large organizations to each employee group.
  14. 14. © 2014 NAVEX GLOBAL, INC. ALL RIGHTS RESERVED. NAVEX Global’s 2014 Ethics and Compliance Training Benchmark Report 14 IV. KEY FINDINGS Benchmarking Ethics & Compliance Training 1) Training Hours (continued) Hours of Training Delivered Annually: Non-Employee Groups Hours of Training Delivered Annually Non-Employee Groups 0 10 20 30 40 50 60 70 O Hours 1 - 5 Hours 6 - 10 Hours 11 - 25 Hours 25 Plus Hours Board of Directors (n=457) Third Parties (n=415) 0 10 20 30 40 50 60 70 O Hours 1 - 5 Hours 6 - 10 Hours 11 - 25 Hours 25 Plus Hours 30% 57% 59% 6% 3% 2% 36% 4% 1% 2% 3.04 Average 0 6 middle 80% range = 0 - 6 hours 2.07 Average 0 4 middle 80% range = 0 - 4 hours 0.0 Median 1.0 Median
  15. 15. © 2014 NAVEX GLOBAL, INC. ALL RIGHTS RESERVED. NAVEX Global’s 2014 Ethics and Compliance Training Benchmark Report 15 IV. KEY FINDINGS Benchmarking Ethics & Compliance Training 1) Training Hours (continued) Number of Courses Offered Annually Per Employee Role FINDINGS: The majority of respondents’ organizations are training on one-to-five topics with approximately 96 percent of respondent organizations offering fewer than ten courses per year. Training Courses Offered Annually: Employee Groups 0 20 40 60 80 Training Courses Offered Annually O Courses 1 - 5 Courses 6 - 10 Courses 11 - 15 Courses 16 or More Courses Senior Leaders (n=455) Middle Managers (n=528) 0 20 40 60 80 O Courses 1 - 5 Courses 6 - 10 Courses 11 - 15 Courses 16 or More Courses Employee Groups O Courses 1 - 5 Courses 6 - 10 Courses 11 - 15 Courses 16 or More Course N 9% 76% 12% 2% 2% 6% 76% 15% 3% 1% 1 7 2.0 Median middle 80% range = 1 - 7 courses 3.35 Average 1 8 3.0 Median middle 80% range = 1 - 8 courses 3.63 Average 1 2 M 0 20 40 60 80 Training Courses Offered Annually O Courses 1 - 5 Courses 6 - 10 Courses 11 - 15 Courses 16 or More Courses Senior Leaders (n=455) Middle Managers (n=528) 0 20 40 60 80 O Courses 1 - 5 Courses 6 - 10 Courses 11 - 15 Courses 16 or More Courses Employee Groups O Courses 1 - 5 Course 6 - 10 Cours 11 - 15 Cou 16 or More 9% 76% 12% 2% 2% 6% 76% 15% 3% 1% 1 7 2.0 Median middle 80% range = 1 - 7 courses 3.35 Average 1 8 3.0 Median middle 80% range = 1 - 8 courses 3.63 Average 1 Middle Managers (n=528) 0 20 40 60 80 s urses 0 20 40 60 80 O Courses 1 - 5 Courses 6 - 10 Courses 11 - 15 Courses 16 or More Courses Non-Managers (n=529) 6% 76% 15% 3% 1% 8% 76% 12% 3% 1% 8 3.0 Median middle 80% range = 1 - 8 courses 3.63 Average 1 6 2.0 Median middle 80% range = 1 - 6 courses 3.27 Average
  16. 16. © 2014 NAVEX GLOBAL, INC. ALL RIGHTS RESERVED. NAVEX Global’s 2014 Ethics and Compliance Training Benchmark Report 16 IV. KEY FINDINGS Benchmarking Ethics & Compliance Training 1) Training Hours (continued) Training Courses Offered Annually: Non-Employee Groups ANALYSIS: Organizations are deploying very few courses on an annual basis. Organizations are less focused on access to large libraries of outdated courses, and more focused on taking a risk-based approach to training. Need for Curriculum Mapping Increasing Curriculum mapping1 will become increasingly important to help organizations plan their programs, ensure a proper rotation of training content to all learners over a multi-year period, and enable them to more effectively allocate their training funds. Board Members and Third Parties Remain Underserved Two audiences that are underserved by training, despite the significant role they play and risk they can create, are board members and third parties. It is crucial for the board of directors to understand their role in compliance program oversight and in setting “tone at the top.” Equally important is an organization’s entire ecosystem of partners and suppliers and their role in contributing to a culture of compliance. Training of third parties helps prevent third-party misconduct, and helps establish key defenses when violations occur. 0 20 40 60 80 Training Courses Offered Annually O Courses 1 - 5 Courses 6 - 10 Courses 11 - 15 Courses 16 or More Courses Board of Directors (n=455) Third Parties (n=405) 0 20 40 60 80 O Courses 1 - 5 Courses 6 - 10 Courses 11 - 15 Courses 25 or More Courses Non-Employee Groups 33% 55% 61% 5% 1% 0% 41% 3% 1% 0% 1.15 Average 0 3 0.0 Median middle 80% range = 0 - 3 courses 1.77 Average 0 4 middle 80% range = 0 - 3 courses 1.0 Median 1. Curriculum Mapping is the process of aligning training with audience roles and organizational risks.
  17. 17. © 2014 NAVEX GLOBAL, INC. ALL RIGHTS RESERVED. NAVEX Global’s 2014 Ethics and Compliance Training Benchmark Report 17 IV. KEY FINDINGS Benchmarking Ethics & Compliance Training 2) Training Topics FINDINGS: Overall, “Ethics and Code of Conduct” training was the clear frontrunner for training topics, with “Workplace Harassment” a close second and “Conflicts of Interest” a distant third. When broken out by job role, ethics, compliance and legal professionals prioritize “Ethics and Code of Conduct,” “Conflicts of Interest” and “Gifts and Gratuities” training, while HR and learning and development professionals place a greater emphasis on “Workplace Harassment,” “Discrimination” and “Diversity & Inclusion” training (See next page). Training Topic Priorities for the Next Two to Three Years 0 10 20 30 40 50 60 70 80 90 Training Topic Priorities for the Next Two to Three Years 79% 68% 66% 60% 58% 56% 48% 41% 41% 37% 37% 35% 29% 27% 26% 22% 16% 85% 13% 19% Ethics & Code Of Conduct Workplace Harassment Conflicts Of Interest Confidential Information Discrimination Gifts & Gratuities Reporting & Retaliation Data Privacy Social Media Bribery & Corruption HIPAA Diversity & Inclusion Cyber Security Antitrust & Competition Law Wage & Hour Laws Third Party Compliance Insider Trading Trade Sanctions & Compliance Money Laundering Other
  18. 18. © 2014 NAVEX GLOBAL, INC. ALL RIGHTS RESERVED. NAVEX Global’s 2014 Ethics and Compliance Training Benchmark Report 18 IV. KEY FINDINGS Benchmarking Ethics & Compliance Training 2) Training Topics (continued) Priorities for the Next Two to Three Years: By Job Function 0 HR, Learning and Development or Training (n=197) 0 25 50 75 100 91% 78% 74% 63% 57% 55% 44% 43% 38% 38% 38% 34% 29% 25% 18% 17% 14% 12% 9% 7% Workplace Harassment * Ethics & Code of Conduct * Discrimination * Confidential Information Conflict of Interest * Reporting & Retaliation Diversity & Inclusion * Gifts & Gratuities * Social Media HIPAA Wage & Hour Laws * Data Privacy * Cyber Security * Bribery & Corruption * Other Third Party Compliance * Antitrust & Competition Law * Insider Trading * Trade Sanctions & Compliance * Money Laundering* HR, Learning and Development or Training (n=197) 63% 57% 55% 44% 43% 38% 38% 38% 34% 29% 25% 18% 0 25 50 75 100 Ethics, Compliance, and Legal (n=289) arning and Development or Training (n=197) 25 50 75 100 90% 79% 72% 70% 70% 60% 60% 52% 51% 44% 38% 37% 37% 37% 31% 29% 21% 20% 19% 15% 91% 78% 74% 63% 57% 55% 44% 43% 38% 38% 38% 34% 29% 25% 18% 17% 14% 12% % Ethics & Code of Conduct * Conflict of Interest * Workplace Harassment * Gifts & Gratuities * Confidential Information Data Privacy * Reporting & Retaliation Bribery & Corruption * Discrimination * Social Media Cyber Security * Antitrust & Competition Law * Third Party Compliance * HIPAA Diversity & Inclusion * Insider Trading * Trade Sanctions & Compliance * Other Wage & Hour Laws * Money Laundering* Ethics, Compliance, and Legal (n=289) or Training (n=197) 91% 78% * Indicates significant difference among groups
  19. 19. © 2014 NAVEX GLOBAL, INC. ALL RIGHTS RESERVED. NAVEX Global’s 2014 Ethics and Compliance Training Benchmark Report 19 IV. KEY FINDINGS Benchmarking Ethics & Compliance Training 2) Training Topics (continued) ANALYSIS: Because an organization’s code of conduct continues to act as a foundational compliance element, it is no surprise that it is the most frequently trained topic, with harassment a very close second. These two cornerstone courses are deployed to the widest audiences and should be a representation of an organization’s commitment to compliance, integrity and respect. Investing appropriately in these titles will help create a strong foundation for an effective training program. Aligning Training Topics to Risk Profiles and Legal Requirements To maximize program effectiveness within finite budgets and competing priorities, it is best to align training topics with an organization’s risk profile and legal requirements. This will help ensure that training as a control is in place to address the highest risks and that all legal training mandates are met. Increased Focus Needed on Communication and Privacy-Related Conduct That said, several areas that pose significant legal and reputational risk for most organizations ranked surprisingly low. Regulatory and enforcement pressure has made privacy and technology security paramount concerns for today’s businesses. But despite this focus, only 48 percent of organizations plan to provide data privacy training, and only 35 percent plan to provide cyber security training. Likewise, despite the benefits of providing employees with social media training, only 41 percent plan to provide such training in the next two to three years. When evaluating organizational risk and building a training plan it is important to take into consideration regulatory and enforcement trends, as well as trends in how employees communicate.
  20. 20. © 2014 NAVEX GLOBAL, INC. ALL RIGHTS RESERVED. NAVEX Global’s 2014 Ethics and Compliance Training Benchmark Report 20 IV. KEY FINDINGS Benchmarking Ethics & Compliance Training 3) Training Formats FINDINGS: Online training is the most frequently-used form of training for survey respondents, with live training a close second. E-mail—whether it is used to deliver links to training, training files, or training and awareness messages and reminders—is the third most frequently-used communication format. Beyond the top three, organizations are using a wide variety of formats, from posters and wallet cards to newsletters and webinars. Communication Formats Used in Ethics and Compliance Training & Awareness ance Training and Awareness 71% 68% 57% 48% 47% 45% 45% 36% 33% 31% 29% 26% 15% 11% 7% 6% 2% 0 25 50 75 Online Training Live Training Email Policy Distribution or Certification Systems Print Resources: Handbooks/Brochures/ Documents/Memos Intranet Posters Informal Meetings Newsletters Webinars Manager Discussion Materials Short Training Vignettes Wallet Cards Digital Resources: E-Books/Microsites or Digital Guides Social Media Direct Mail Other
  21. 21. © 2014 NAVEX GLOBAL, INC. ALL RIGHTS RESERVED. NAVEX Global’s 2014 Ethics and Compliance Training Benchmark Report 21 IV. KEY FINDINGS Benchmarking Ethics & Compliance Training 3) Training Formats (continued) ANALYSIS: On average, respondents used six different communication formats for training and awareness. Utilizing a wide variety of formats to reach learners is most effective especially if the selected formats are designed to advance key program goals and deployed per a well thought out plan. Live Training and Blended Learning Trends Live training was once the training staple. While it still plays a central role in the overall training program mix, survey responses indicate that online training has surpassed live training as the most-frequently-used training format. For many organizations, blended learning (using both live and online training) has emerged as an effective way to train the highest-risk employees. For instance, organizations often provide high-level bribery and corruption training to all learners online, and provide additional live training to those who deal with government officials. Social Media Slow to Enter the Ethics & Compliance Mix Despite the prevalence of social media in the lives of all employees, and the influence it has over how we learn and communicate, only seven percent of organizations are currently using social media as a training tool. Innovative ethics and compliance programs have started to embrace social media as a training mechanism, harnessing its power and simplicity as a low cost communication tool. By utilizing private chat functionality and communication tools, organizations are able to generate discussion and provide an opportunity for employees to interact in new and meaningful ways. Policy Management Systems On the Rise Technology has influenced more than just traditional training methods; nearly half of the respondents are using a policy management system to support training and awareness efforts. Policy management software systems help organizations distribute policies, procedures and regulatory requirements and collect employee attestation records. Compliance professionals are moving away from manual, paper-based distribution approaches, and toward automated, measurable systems that better support program effectiveness and efficiency.
  22. 22. THE FUTURE OF ETHICS & COMPLIANCE TRAINING
  23. 23. © 2014 NAVEX GLOBAL, INC. ALL RIGHTS RESERVED. NAVEX Global’s 2014 Ethics and Compliance Training Benchmark Report 23 IV. KEY FINDINGS The Future of Ethics & Compliance Training 1) Overall Training Trends FINDINGS: The number one trend ethics and compliance professionals are currently applying—or will be looking to apply in the next year—is “adding course titles to cover more risk areas.” The second is improving measurement of training effectiveness, and the third is bolstering middle manager training. Ethics & Compliance Training Trends What training trends are you currently applying, or do you plan to apply in the next year? 0 25 50 75 ining Trends 54% 46% 45% 32% 35% 44% 30% 25% 21% 6% 16% 11% 5% ently applying, or do you plan to apply in the next year? Adding Course Titles (To Cover More Risk Areas) Measuring Training Effectiveness Additional Emphasis On Middle Manager Training Using Shorter Courses Or Short Learning Vignettes (3-7 Minutes) Training Executives And Board Members Collaborative Learning (Peer-To-Peer, Or Group Discussion And Problem-Solving) Leveraging Modular Content Deploying Training On Mobile Devices Training Third Parties Curriculum Mapping Gamification Reducing The Number Of Course Titles Other
  24. 24. © 2014 NAVEX GLOBAL, INC. ALL RIGHTS RESERVED. NAVEX Global’s 2014 Ethics and Compliance Training Benchmark Report 24 IV. KEY FINDINGS The Future of Ethics & Compliance Training 1) Overall Training Trends (continued) ANALYSIS: More than half of respondents plan to increase the number of risk areas covered by their training programs. This should not be surprising, considering the relatively small number of courses currently being deployed by the vast majority of programs. However, given the constraints of seat time and budget, adding courses will mean getting creative with both the methods they utilize and the length of the training they provide. One way that organizations can cover additional topics while not adding significantly to seat time is by deploying short- form training. And, according to the survey results, 44 percent of survey respondents are offering shorter courses—or plan to in the next year. Program Effectiveness Measurement Becoming a Business Necessity Measuring training effectiveness is the second most common training trend. Most organizations today struggle with measurement (see more in the “Measuring Effectiveness” section of this report), but demonstrating a compliance program’s effectiveness is becoming a business necessity—not only to understand where there are opportunities to improve the program, but to justify the program’s budget. Establishing what “effectiveness” means, determining how to measure it and then collecting and reporting on the data are the challenges that lay ahead for forward-thinking compliance professionals. Increasing Focus on Middle Managers In light of the concerns that respondents have about managers and their skills for handling complaints and supporting the culture, it is good to see that 45 percent of organizations plan to focus on deploying additional training specifically to middle managers. Often the first in the organization to be confronted with ethics and compliance challenges, middle managers remain key in the effort to build and sustain a culture of respect and integrity.
  25. 25. © 2014 NAVEX GLOBAL, INC. ALL RIGHTS RESERVED. NAVEX Global’s 2014 Ethics and Compliance Training Benchmark Report 25 IV. KEY FINDINGS The Future of Ethics & Compliance Training 2) Focusing on Quality and Effectiveness FINDINGS: Quality matters. Nearly all (92 percent) of the survey respondents agree that quality of an online training course is critical to ensuring that training is effective. Maximizing effectiveness is critical for making the most of limited training hours and budgets—and truly impacting behavior and culture. For effectiveness, respondents lean primarily on high-quality video-based training. Training Course Quality’s Impact On Effectiveness The quality of an eLearning course makes a significant difference in training effectiveness. Agree Neutral Disagree 0 10 20 30 40 50 60 70 80 90 100 Training Course Quality’s Impact On Effectiveness 92% 7% 1% The quality of an e-learning course makes a significant difference in training effectiveness. Strongly Agree Somewhat Agree Strongly Disagree
  26. 26. © 2014 NAVEX GLOBAL, INC. ALL RIGHTS RESERVED. NAVEX Global’s 2014 Ethics and Compliance Training Benchmark Report 26 IV. KEY FINDINGS The Future of Ethics & Compliance Training 2) Focusing on Quality and Effectiveness (continued) When evaluating online training courses for quality, the top two purchase criteria underscore the importance of quality. The first is the look and feel of the course: does it employ engaging and interactive content? The second is closely related—how often are courses refreshed? In other words, is it contemporary? Does it include the most relevant examples or do course references and content seem dated? Instructional Media Format Preferences Which type of instructional media is most effective for the following objectives? Animation Video-Based Training 0 10 20 30 40 50 60 Video-Based Training Slide with Audio No Preference 44% 22% 7% 28% 20% 44% 9% 26% 27% 14% 10% 50% 29% 44% 7% 19% 37% 33% 9% 21% Video to Animation Preference Ratio 2x 2.2x 1.9x 1.5x 1.15x Establishes Credibility With Learners Training Is Taken Seriously And Considered Important To The Job Favorable Judgment From A Judge, Jury, Prosecutors Or Regulators In A Defense Teaching Behavioral Principles In A Manner That Changes Attitudes And Behavior Learning Retention Note: Numbers may not add to 100 percent due to rounding.
  27. 27. © 2014 NAVEX GLOBAL, INC. ALL RIGHTS RESERVED. NAVEX Global’s 2014 Ethics and Compliance Training Benchmark Report 27 IV. KEY FINDINGS The Future of Ethics & Compliance Training 2) Focusing on Quality and Effectiveness (continued) eLearning Provider Selection Criteria ANALYSIS: While “quality” may be a subjective term, respondents made it clear that they know it when they see it. High-quality online training is seen as superior when it is credible, fresh and relevant. Furthermore, respondents believe video-based training is the best form of instructional media for establishing a training program’s credibility, engaging employees, teaching behavioral principles and helping trainees retain information. High-Quality Video-Based Training Helps Meet Increasingly Sophisticated Audience Expectations In all these areas, respondents ranked video-based training above animation-based training and slideshows with audio. This preference for video may be due to increasing consumer sophistication and expectations for all media. These findings are in agreement with NAVEX Global’s experience as far as what training programs and formats have been most effective for our clients. 0 20 40 60 80 100 Significant Importance Moderate Importance Not Important 88% 80% 77% 68% 67% 66% 64% 62% 60% 42% 37% 81% 10% 17% 20% 27% 29% 31% 32% 30% 32% 44% 33% 16% 2% 3% 3% 5% 5% 3% 5% 8% 8% 15% 30% 3% Look And Feel Of The Training Experience, Engaging And Interactive Content How Often Courses In The Library Are Refreshed And Updated; Age Of Content Customization Options Reputation Of Vendor And Service Modular (Content Modules Can Be Swapped In Or Out) Availability Of Training Course Content In Both Long And Short Formats Credentials Of Course Content Creators Endorsement Of Respected Regulatory Bodies, Associations, Or Legal Entities Training Provider Learning Management System (LMS) Total Number Of Course Titles In The Library Mobile Enabled How Content Translated Into Other Languages Is Presented Note: Numbers may not add to 100 percent due to rounding.
  28. 28. © 2014 NAVEX GLOBAL, INC. ALL RIGHTS RESERVED. NAVEX Global’s 2014 Ethics and Compliance Training Benchmark Report 28 IV. KEY FINDINGS The Future of Ethics & Compliance Training 3) Doing More With Less Covering more risk areas with limited hours and budgets is a priority for survey respondents. To address this, compliance professionals are adding course titles—and the titles they’re adding are increasingly short-form learning courses (three to seven minutes in duration) that focus training on a specific issue or critical update. Thus, organizations are adding risk coverage without adding significant training time. Sixty-one percent of respondents believe short-form training is effective at covering more risks; 49 percent believe short-form training is an effective substitute for full-length courses in lower risk areas. Effectiveness of Short-Form or “Burst Learning” Training 0 20 40 60 80 100 76% hort-Form or “Burst” Learning Training 5%19% 73% 4%23% 68% 5%27% 63% 6%31% 61% 8%31% 59% 10%31% 57% 7%36% 55% 9%36% 49% 15%36% 48% 17%35% 42% 12%46% Effective Neutral Not Effective of all respondents are or will be using short-form training in the next 2-3 years Raising Awareness Reinforcing Foundational Training Adding Variety To Instructional Methods Covering Trending Topics Covering A Greater Number Of Risk Areas Reducing Time Employees Spend In Training Encouraging Employees To Report Misconduct Internally Generating Employee About Certain Topics Substituting For Full Length Courses In Lower Risk Areas Distributing Policies Signaling Greater Sophistication And Rigor In Training & Awareness Programs Note: Numbers may not add to 100 percent due to rounding. 44%
  29. 29. © 2014 NAVEX GLOBAL, INC. ALL RIGHTS RESERVED. NAVEX Global’s 2014 Ethics and Compliance Training Benchmark Report 29 IV. KEY FINDINGS The Future of Ethics & Compliance Training 3) Doing More With Less (continued) ANALYSIS: As noted earlier in the report, the number one training challenge cited by respondents is limited time available for training. Short-form training is being used by organizations to combat challenges they face in their training programs; 61 percent say it can help them cover more risk areas and 49 percent say short-form training can be used to replace some full-length courses. Short-Form Learning Effective Format for Raising Awareness, Diversifying Training Mix and Reinforcing Key Messages In general, respondents found that the short-form training format is most effective when used to raise awareness (76 percent), reinforce training lessons (73 percent) and generally diversify the mix of training methods (68 percent). Periodically reinforcing important lessons about key compliance risk areas is not only a best practice, but is also recognized by enforcement agencies as an important element of an effective training program. Due to its cost-effectiveness and lessened impact on seat time, short-form training is becoming a key training method.
  30. 30. © 2014 NAVEX GLOBAL, INC. ALL RIGHTS RESERVED. NAVEX Global’s 2014 Ethics and Compliance Training Benchmark Report 30 IV. KEY FINDINGS The Future of Ethics & Compliance Training 4) Measuring Effectiveness FINDINGS: The top three effectiveness measures in place in respondents’ organizations today are: (1) Training completion rates, (2) unsolicited feedback from employees, managers or senior leaders and (3) results of learning retention quizzes. Almost three quarters of companies (72 percent)—regardless of organization size—measure training effectiveness using completion rates. Approaches Used to Measure Training Effectiveness 72% 57% 55% 44% 48% 43% 42% 42% 1% 26% 20% 14% 0 20 40 60 80 Training Completion Rates Unsolicited Feedback From Employees, Managers, Or Senior Leaders Learner Retention Quizzes (Knowledge Of Concepts, Laws, Policies, Skills) Changes In Behavior (Misconduct Observed, Reported, Or Substantiated) Surveys Report Data From Hotline, Ethics Office, Or Hr(Report Rate, Types Of Reports, Anonymity, Categories) Changes In Attitudes Learner Reaction/Response Business Metrics/Results (Lawsuits, Investigation Duration, Turnover, Etc.) We Do Not Formally Measure Training Effectiveness Brand Reputation/Trust (Behavior Of Customers, Partners, Media, Analysts) Other
  31. 31. © 2014 NAVEX GLOBAL, INC. ALL RIGHTS RESERVED. NAVEX Global’s 2014 Ethics and Compliance Training Benchmark Report 31 IV. KEY FINDINGS The Future of Ethics & Compliance Training 4) Measuring Effectiveness (continued) ANALYSIS: Measuring effectiveness is one of the key trends that compliance professionals will be focused on over the coming year. However, the results of the survey demonstrate that organizations have significant work to do to create real effectiveness measures. The most-frequently used method—cited by nearly three quarters of all respondents—is measuring completion rates. While this approach is common, it only measures successful training deployment, not effectiveness. Defining Key Performance Indicators Crucial for Success To improve effectiveness measurement, organizations will need to establish key performance indicators (KPIs) for training programs. In conjunction with senior leaders, compliance professionals must define success and effectiveness, determine what tools they will use to measure against KPIs, and decide what portion of their budget they are willing to allocate to the measurement process. The measures chosen should be driven by an organization’s goals for their training program. Such goals may be eliciting positive reactions or driving changes in learning, behaviors, results or ROI. Each goal will likely require a specific measurement method. Some of the tools that can be very important in the measurement process include pre-and post-training analysis through surveys, focus groups and changes in helpline and litigation data.
  32. 32. © 2014 NAVEX GLOBAL, INC. ALL RIGHTS RESERVED. NAVEX Global’s 2014 Ethics and Compliance Training Benchmark Report 32 V. CONCLUSION & KEY TAKEAWAYS Conclusion The state of ethics and compliance training is rapidly evolving. Compliance professionals are broadening the focus of their programs beyond just establishing key legal defenses; program effectiveness now also depends on compliance professionals’ ability to create a culture of respect and prevent future misconduct. Reaching these goals will require organizations to rethink and innovate the way they are training their employees. Compliance professionals will need to be increasingly focused on prioritizing and addressing top risk areas, and using short-form training to cover more risk areas even in the midst of limited training hours and pressured budgets. And, as they look to the future, leaders must be increasingly focused on laying the groundwork today to measure the effectiveness of their training investment tomorrow. A balanced, thoughtful ethics and compliance training program is no longer optional—it is a cornerstone for organizations that are committed to building an ethical culture, and protecting their people, reputation and bottom line. Key Takeaways To maximize training program effectiveness, compliance professionals should take the following steps: −− Focus on foundational training. The top two courses an organization deploys should be code of conduct training and harassment training, as these two courses address the biggest risks and set the standard of appropriate workplace behavior. The training delivered by these courses should be of top-notch quality. −− Thoughtfully match training to address key risk areas. No training program can tackle every risk area every year. Effective programs make data-driven decisions, planning out training curriculums and utilizing an array of training methods to drive home key messages. −− Insist on high quality training. Because the average organization only deploys a few courses a year, the quality of each course is more critical than ever in achieving ethics and compliance training effectiveness. −− Ensure training is relevant for each of your key audiences. Programs don’t just serve one audience, and each audience poses special risks to each organization. Ensure that your training speaks to each of their needs—with special emphasis on board members, middle management and third parties. −− Develop a plan to measure training effectiveness. Don’t simply let completion rates and anecdotal comments serve as program success determinants. Establish KPIs, allocate appropriate budget and put the processes in place today to measure the effectiveness of the training you deploy. −− Leverage short-form training. To cover more topics, manage seat time, add variety, raise awareness and reinforce critical training, utilize short-form training in your compliance training program. −− Incorporate a variety of training formats. Even if online training is the most frequently-used method for deployment, programs should use a variety of communication formats to reinforce training messages. Consider diversifying your training and awareness formats to include: live training, awareness materials, policy distribution systems, printed materials, intranets, etc. All are viable options and can be quite cost-effective when measured against the benefits of increased message retention.
  33. 33. © 2014 NAVEX GLOBAL, INC. ALL RIGHTS RESERVED. NAVEX Global’s 2014 Ethics and Compliance Training Benchmark Report 33 VI. ABOUT THE AUTHORS & NAVEX GLOBAL Mary Bennett, R.Ph., is vice president of advisory services and a pharmacist by training. She previously served as vice president in the Compliance and Integrity office at Caremark, where she implemented the requirements of one of the first government agreements in healthcare. Mary works across all industries for the advisory services team, creating and facilitating award-winning training programs, conducting large and small program assessments, developing compliance communications and helping clients develop best practice programs from the ground up. Ingrid Fredeen, J.D., vice president of advisory services, has been specializing in ethics and legal compliance training for nearly 10 years. She has been the principal design and content developer for NAVEX Global’s online training course initiatives utilizing her 18 years of specialization in employment law and legal compliance. Prior to joining NAVEX Global, Ingrid worked both as a litigator with Littler Mendelson, the world’s largest employment law firm, and as in-house corporate counsel for General Mills, Inc. a premier Fortune 500 food manufacturing company. ABOUT NAVEX GLOBAL NAVEX Global helps protect your people, reputation and bottom line through a comprehensive suite of ethics and compliance software, content and services. The trusted global expert for more than 8,000 clients in 200+ countries, our solutions are informed by the largest ethics and compliance community in the world. More information can be found at www.navexglobal.com

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