6. What is the Middle Market?
● Annual revenue of $10 million - $1 billion
● Represent 3% (200,000) of all businesses in the US
○ 33% of total private sector GDP
○ 33% of all jobs in the US
Source: The National Center for the Middle Market. (n.d.). 3Q 2016 Middle Market Indicator Infographic.
Retrieved from http://www.middlemarketcenter.org/infographics/3q-2016-middle-market-indicator-infographic.
8. Middle Market Trends
Within the next nine months:
● Revenue Growth Steady
○ 4.9% growth
● Employment Growth Strong
○ 4% growth
● Investment Popular
○ 64% will invest capital
Source: The National Center for the Middle Market. (n.d.). 3Q 2016 Middle Market Indicator Infographic.
Retrieved from http://www.middlemarketcenter.org/infographics/3q-2016-middle-market-indicator-infographic.
10. Case Study: Zenefits
Source: Bort, J. (2016, Mar. 11). LIES, BOOZE, AND BILLIONS: How one of the fastest-growing startups in Silicon Valley history raised $580 million then spiraled out of
control. Business Insider. Retrieved from http://www.businessinsider.com/the-inside-story-of-zenefits-2016-3.
Facts (before March 2016):
● Fast-growth company - raised $580
million in funding
● Aggressive sales tactics, goals
● Hired a ton of employees quickly
● Alleged party atmosphere
● Investigated by state regulators, CEO
and Head of Sales stepped down, 17%
workforce fired, morale tanked.
11. Data Security - Trends in Compliance
86% of middle market executives say cybersecurity is important, yet:
● 45% have up-to-date cybersecurity strategies and reviewed at least once a year.
● 30% of managers do not regularly report cybersecurity risks to top executives.
● More than 25% do not have a documented response plan.
Source: Stewart, T.A. (2017, Jan. 4). The Next Cybersecurity Battleground: Middle Market Companies. The Huffington Post. Retrieved from
http://www.huffingtonpost.com/entry/the-next-cybersecurity-battleground-middle-market_us_586d07cae4b04d7df167d888.
12. Data Security - Trends in Compliance
Reasons for poor data security protection:
● Resources
● Denial
● Waste of Money
13. Data Security - Compliance Risks
Insider Negligence is the #1 cause of data breaches
○ Ponemon
○ Society of Corporate Compliance and Ethics
Lack of resources is no excuse
● Federal Trade Commission (LabMD, Inc.)
● Consumer Financial Protection Bureau (Dwolla, Inc.)
● Class actions
Source: Day, C. (2016, Aug. 16). Mid the (Data Security) Gap. LawRoom Blog. Retrieved from
http://blog.lawroom.com/data-security/mind-the-data-security-gap/?_sft_category=data-security&sort_order=date+desc.
14. Data Security - Compliance Risks
“Cybersecurity is everybody’s job and mistakes by
employees, contractors, and vendors – using weak
passwords, opening attachments from an unfamiliar
source, misconfigured settings - lead to the
overwhelming majority of successful attacks.”{ }Stewart, T.A. (2017, Jan. 4). The Next Cybersecurity Battleground: Middle Market Companies. The Huffington Post. Retrieved from
http://www.huffingtonpost.com/entry/the-next-cybersecurity-battleground-middle-market_us_586d07cae4b04d7df167d888.
15. Poll Question #1
Have you asked someone in your company about its data
security in the past year?
16. Hiring - Trends in Compliance
Gig Economy
○ “Independent contractors,” freelancers, temporary workers.
○ Technology as infrastructure.
Job seekers are optimistic about finding jobs.
Millennials
● Gallup reported that millennials could make up as much as 75% of the workforce by
2025. (The current number is 38%).
17. Hiring - Compliance Risks
Misclassification*
● Exempt vs. Non-Exempt
● Independent Contractor* (research difference) vs. Employee
Effects
● Class Action Lawsuits
● Regulatory Investigations
● Bad for Morale
*Source: Pinsof, J. (2016). A New Take on an Old Problem: Employee Misclassification in the Modern Gig-Economy. 22 Mich. Telecomm. & Tech. L.
Rev. 341. Retrieved from http://repository.law.umich.edu/mttlr/vol22/iss2/6.
18. Poll Question #2
Who determines whether your employees are classified correctly?
19. Culture - Trends in Compliance
“Research shows that companies that focus on creating
happy, healthier, motivating, and appreciative
workplaces are onto something profound.”
Source: Sturt, D. & Nordstrom, T. (2016, Jul. 21). Does Your Workplace Help You? Or Is It
Actually Derailing Your Potential?. Forbes. Retrieved from
http://www.forbes.com/sites/davidsturt/2016/07/21/does-your-workplace-help-you-or-is-it-act
ually-derailing-your-potential/#782bc51d5fb3.
{ }
20. Culture - Trends in Compliance
Employee survey results show:
● 75% do not feel engaged at work
○ Gallup reported in late August of 2016 that only 29% of millennials feel engaged at work
Talent Planning
● 40% of middle market companies give themselves a “C” or lower for the talent planning efforts.
○ Succession planning, staffing, development, talent review, performance management.
Source: (2016, Dec. 21). Many Middle Market Businesses Not Investing in Talent Properly, New Report Finds. PR Newswire. Retrieved from
http://www.prnewswire.com/news-releases/many-middle-market-businesses-not-investing-in-talent-properly-new-report-finds-300382372.html.
21. Culture - Compliance Risks
Unethical Actions
● Policies not followed
● Individual pressure vs. organizational values
● Precursor to illegal actions
Starting off on the wrong foot
22. What About Sexual Harassment and
Discrimination?
● Happens at all sizes of companies, in all industries.
● Sex, race, and transgender social issues.
● Everyone should train, period.
24. Training - Why It
Matters to Middle
Market
Growing Pains
● Where’s the focus of your managers?
Risk from Under Compliance is Greater
● Simply put, lawsuits hurt more
Provides Benefits that Normal
Communications Cannot
● Understanding vs. Learning
Reduce Risk of Liability
● What level of risk is appropriate?
Right Thing to Do
25. Training - Effectiveness
Ineffective
● Abstract summaries of law and policy
● No behavioral modelling
● No context provided to management
○ “We have to do this…”
● Training as a cure-all
Effective
● Adapted for the adult learner
○ Tone and practical application
● Mix of behavior modelling and
compliance
● Case-based learning
26. Training - Topics
Data Security
Wage and Hour
➔ Exempt Employees
Culture
➔ Diversity
➔ Hiring
➔ Ethics
27. About EverFi
● 20 years in business
● 10 attorneys on staff to help ensure ongoing course compliance and
proactive updates
● 20 instructional designers
● 6 mm employees and students will train with us in 2016
● 3300 corporations and universities rely on us today for compliance training
● Raised 61 million in funding (Amazon founder - Jeff Bezos, Twitter
co-founder - Evan Williams, Google EC - Eric Schmidt)