Webinar: 2022 Benchmark Report Insights, Part 1

August 26, 2022

For the next part of this webinar go to 2022 Benchmark Report Insights, Part 2

To get a copy of the 2022 Ethics & Compliance Hotline Benchmark Report for yourself, download it here.

Transcript for 2022 Benchmark Report Insights, Part 1

Matt Kelly: Hello, everybody, and thank you for joining us today. So we are here today to talk about ComplianceLine’s 2021 benchmarking report for the ethics and compliance hotline and we’ve got a lot of material to cover including some actual PowerPoint slides, which I’ll pull up in due course, but thank you, everybody. And joining us to walk through all the data that they had compiled and put together are the two co-CEOs and co-founders the Gallo brothers, Gio and Nick. So guys, welcome, and how are you all doing today?

Nick Gallo: Good, man. Glad to be here. Pretty excited to dive into the results of this benchmark report, and always love doing webinars with you, Matt. Love this new EthicsVerse series we’re doing, you are one of my favorite moderators and thought leaders in E&C so, so glad to be here. What’s up, Gio?

Giovanni “Gio” Gallo: And that’s saying something, because Nick is very discerning, Matt, so you really made the top of the list. Yeah, excited to be here, excited to go through this. A lot of people are hungry for this data to figure out where their program sits and where they can or should improve. Hopefully, you’ll see some stuff where you say, “Hey, we’re doing pretty well on that one.” But so excited to jump in. Thank you everyone for joining us today, and I also am very excited to be on this webinar with you, Matt.

Matt: All right. Well now let me see if we can pull up the slides. First, I will share my screen and that should them up. Oh, it looks like I cannot do this. Oh, the host has disabled screen sharing for participants like me.

Nick: All right. Well, as we get that turned on, let’s transfer the hosting over to Matt. In the meantime, like always, on this EthicsVerse webinar, participation is your friend. So jump into the chat, say where you’re from, and, as always, we’ll talk about this more in a second, but we’re gonna be giving away a bunch of prizes today. So the best comments, the best tips are always gonna be, you know, rewarded here. And just…I’m gonna say this on every single one of these webinars, our greatest asset in ethics and compliance is the network that we’re a part of, is the community that we’re a part of. And it only works if you take advantage of it, so use this as a place to make friends, drop your LinkedIn URL in here, accept the invitations, and really lean into this network and this special thing that we’re a part of. Matt, I think it’s been transferred back to you now, so we should be good to dive in here.

Matt: Should be. Let’s see. Can I open this up full screen? Let’s see.

Nick: Yeah, I think hit escape and then go back to slideshow.

Matt: Yeah. All right. So there you go, guys. Let me move it along here. So, all right, we already have kind of gone through the introductions of Nick and Gio and myself as moderator, and I see we’ve got a lot of people who are already popping into the chat. I might as well do my due diligence up front that if you do have questions along the way, you should always feel free to ask them. We’ll try and save some time at the end to get to questions, but if you ask something that is especially good and on point, we’re also happy to take those questions on the fly throughout the hour. So the more questions you do have, and the more points you wanna raise in the chat function, or just submit them in the Q&A feature, the better. And Nick and Gio, I don’t know if you all wanna walk through this first here, but I’ll let you kinda set the pace.

Nick: Yeah. ComplianceLine, you know, we have a suite of corporate integrity products that range from issuing taking case management, credential monitoring, training, specialty solutions, and things like that. So our entire mission is to help make the world a better workplace by providing leaders who care with actionable information to reduce risk in their organization, improve their bottom line, and improve their culture.

So a lot of this that we’re talking about today really drives the speak-up-listen-up culture that I think we’re all trying to build within our organizations. Your relationship with your teammates, the relationship between an organization and its employees is no different than any other relationship. There needs to be a give and take, it needs to be a two-way street, and we in ethics and compliance are the circulatory system of the organization. We touch all these different parts, and to the extent we’re able to provide a means by which the employees that care about leaving the world better, making their world a better place, the extent to which we can give them a means to speak up and we can convey to them that their voice matters. We get a lot of benefits, so we’re gonna be talking about a lot of those things…if you wanna hop to the next slide, Matt, today. And it’s a really exciting actionable piece of the equation that we deal with every single day.

So we have the hotline benchmark report for 2022. There’s a lot of great, actionable tips in there, a lot of great insights. So if you want…if you don’t have a copy of this right now, drop a zero into the chat and someone from our team will be sure to send that directly over to you, and you can even follow along at home if you’re working from home, or if you are working from an office, we’ll send that to you in either case.

So, you know, like I was saying, speak-up-listen-up, you know, speak up is over. So speak-up-listen-up-culture is what the name of the game is, and what we’re gonna be talking about today are not just the takeaways from these different sorts of data points, but also what you can do to sort of assess where you’re at and what you can do to drive those things forward. We have so many conversations about ROI, we have so many conversations about proving our worth, we have so many people that we talk to who seem to feel like, “Man, I’ve been keeping my head down and I’ve been working so hard, and I just haven’t gotten noticed.” Well, what we’re hoping to do here, and not only this EthicsVerse webinar series in total, but in today’s conversation is to provide some ways for you to really kind of actualize, elevate, and make a broader impact in your organization.

All right. So world-famous prizes. As usual world-famous ComplianceLine book giveaway for the best comments, the best questions, so please jump in this chat, share your perspective, share what you’re going through, share the hacks that you’ve learned, and really sow some seeds in this community. As we can increase the thread count of this tapestry of culture that we’re all a part of, the culture gets stronger and stronger. Also, we’re gonna be giving away five free custom benchmark reports to folks that are interested in it. So if you’d like to be part of the custom benchmark report, drop a two in the chat right now, and we’ll be doing a drawing for those. What’s great about these benchmark reports is that we can take some of your data, we can map up against other data points, our own, and other data points in the industry, and really provide a real dialed-in methodology and a PDF that you can print out, you can give to your board, or you can give to your CEO or whoever you report to and get a real dialed-in plan for how you can improve your program. It’s on us to make these improvements, and we wanna help you kind of get there with some of these tools. So with that, Matt…

Gio: Just to clarify, you’re saying don’t just drop a zero or two in the chat, don’t just ask questions. We want people to be saying, “Hey, you know what? This is interesting for me. Here’s how I tackle this challenge. Hey, here’s what I’m working on with my team to figure out.” We want contributions from the participants, right? We got a great…we got hundreds of people on this webinar, we got thousands of points of IQ on here, so jump in and share your ideas and what you’re working on in addition to your question.

Nick: A hundred percent. That’s exactly right, so. Okay. So let’s start talking a little bit about the methodology. The point here is that there’s a lot of data in this data set. So there’s, you know, hundreds of that, you know, over 100,000 reports, over 1000 different organizations, and we map this across four different years. And the only sort of changes that we’ve made to the data is that we’re just excluding people who have less than 10 reports. So we wanna paint a really conservative picture. Our thesis and our theory on this statistical analysis is that a measure of central tendency is only useful to the extent that it drives continuous improvement in our organization. And given the positive skew, I’m gonna kind of nerd out on the stats basis right now, but given the positive skew of virtually all these data sets, the mean, which we present as the number, is always a more conservative number than the median. So we wanna preserve outliers, we don’t wanna smooth the data, and we wanna give a clear picture as possible across industries, across organization sizes, about what kind of number you should be shooting for and what kind of improvements are there to be had with little tweaks to your program.

So this model we’re gonna be coming back to time and time again, and the way we think about issue intake and case management is on the basis of what KPIs are you likely judged by. And, you know, the big headline KPI that we hear from the E&C folks that we talk with and that we help out, if not the biggest, a big one, is how long is it taking us to close our cases? You know, what reports are we getting? How can we get those up, and how can we close our cases faster? And what you’re gonna see is that it’s really a confluence of…can really drive naturally the kind of output or the kind of outcome that we want from this complex system. So we’re gonna talk a lot about intake, we’re gonna talk a lot about employee engagement, and we’re gonna talk a lot about, yeah, systemic follow-up and how those can come together to drive a faster case closure time.

Matt: What do we have here for us?

Gio: So this is a big one. I think Nick might be buffering. So this is one of the biggest drivers that you wanna manage your team around, that you might get evaluated on, that you want to assess. You can assess a bunch of different things that are tied to the health of your intake in case management around this Issue Days Open. So what is this? This is the concept of, “I got something reported. How long did it take me to close out that issue?” Right. Do your investigation, substantiate it, get an answer, close it out.

So if you’re, you know… So broadly, you want this to be low, right? If someone reports what’s gonna drive a good culture for you is not somebody they report and it takes four months for someone to answer it or look at it, right? Where that gets closed quickly, and we’re showing the average here. So if your number is too high, you might wanna look into, “Well, how do I get better at this? Maybe I need to gather information better.” Maybe the information that you’re starting out with is kind of more like a hint than the first step in an investigation. Maybe there’s not a lot of urgency or the proper staffing in your investigations operations, or, you know, similarly, maybe your staff is just overworked.

So, you know, to fix those things, you can implement technology. There are a lot of great ways that your case management system and your case intake, whether it’s on web or mobile or texting or hotline or wherever it is, that that technology can help you get through this process faster. Get it in front of the right people first, give them structured data so that they know how to go through it, and things like that.

You might wanna drive more oversight. Some people are doing a great job. I love the chat, love how you guys are jumping in here saying what you’re doing, what challenges you have. That’s awesome. Other people say, “Hey, you know, I’m struggling with that too,” or how you’re meeting some of those challenges. You might drive some of those special initiatives to say, “Hey, you know what? We wanna just get some more issues reported,” or, “We wanna get a different type of engagement.”

And you also have an opportunity to outsource those investigations, right? If your team’s overloaded or you don’t have that expertise, there are various different ways that you can get an external party who are professionalized in this investigation process to do that data gathering piece, and what you’re at your core is gonna be that thing that only you can do, decide what should happen, interpret the information, and, ultimately, make your culture better. That is the core. And more and more what we’re seeing in the compliance space is people are not just leveraging a lawyer or a consultant and say, “Hey, can you work with this?” They’re leveraging a latticework of vendors and partners who can help them do the things that are further from their core so that your team can do that intelligent work that is, you know, that decision and that analysis.

Matt: You know, I did just wanna say, I love talking about these kind of metrics such as Issues Days Open or Average Case Closure Time, because in one sense, you can’t run a good ethics and compliance function without knowing what those numbers are, but they are also really specific to your company. Like, you really have to think through where is this number coming from? Because it could be driven by any number of factors. And certainly, you flagged case overload or staff overworked. Is it a different sort of issue you’re dealing with now than you were last year? Is it an incomplete intake process, that you’re spending more time chasing down information that maybe a good intake process could have caught up with that information, captured it earlier?

You know, I love understanding what the metric is, but it is so difficult because there’s so many ways you could nudge, say, the Issues Days Open and the Average Case Closure Time, so many different factors that a CCO is really gonna have to sit back and think, “Why exactly is this number what it is for me?” As much as we all like peer benchmarking and we should have it, you know, you could have two very different companies…or very different reasons for similar companies having different numbers. It just really underlines how tricky it can be to analyze all of this information.

Gio: Yeah, it really is. There’s really rich data that you can get in and find some action on. Go ahead, Nick.

Nick: Yeah. I mean the best person, to your point, Matt, to compare yourself to is yourself. That’s really who we’re competing against. And there’s a bunch of different factors that can, you know, contribute to this number. So, you know, looking at where you were in the past, setting a goal for where you wanna be in the future, and trying to diagnose why you’re at where you’re at, and taking frankly, a Pareto approach to…you know, that’s the 80/20 rule, taking a Pareto approach to what it’s gonna take to move that needle in the direction you want is what is foundational to any continuous improvement process. But if we as ethics and compliance professionals are not continuously in a mode of continuous improvement, then we’re just gonna stagnate.

And the world keeps changing. I mean, three years ago, nobody was thinking about work from home. Now, it’s on top of mind for all of us. How do our programs shift and change through this? So, you know, to your point, Matt, none of these things are data points that can tell a whole story. The story is below…you know, is under the hood of the engine so to speak.

The other point which I don’t think we have a slide on here for is you shouldn’t just be looking at your average. You wanna look at your distribution and your case aging across different buckets and see how that might correlate to different categories, right? So divide all of your cases into maybe 3 or 4 different buckets, sort of 0 to 30 days, 30 to 60 days, 60 to 90 days, and really age cases over 90 days. Once you code those, and you should be able to pull that straight from your system if those aren’t naturally falling into those categories, you can pull those into Excel and code those appropriately.

There’s probably some insights that you’ll be able to gather from that data set. And is it a particular case type? Is it a particular location type that has these age cases? How can we sort of start to fix those things, but none of these problems are gonna take care of themselves, right? We have to do something different and we have to exhibit some agency over our program and over our system in order to get those different results. So I like to touch on that because it’s not just the average, it’s the distribution. Our rule of thumb, the general rule of thumb across the industry, across company sizing, whatever, is you want essentially all your cases, if possible, to be closed below 30 days. That’s gonna be the process, or that’s gonna be a cadence that is going to be… that’s gonna allow you to have a good visibility onto, you know, are we closing our cases fast enough?

So much of our job is, like, sorting through the haystack to find the needles to the extent that we can build an apparatus and build a latticework of processes around a particular problem that we’re trying to solve, that helps us, you know, basically, bring a magnet to that haystack. Then, to Gio’s point from a couple of minutes ago, then we can really be spending our time doing the things that only we can do, and that’s where the magic of E&C can come to bear across our organization. And that’s where we can really start crowdsourcing risk management and really start, you know, mitigating risk at scale.

Matt: So reporting channel use. What do we have here? It looks like we have more and more people using the hotline. I mean, I think that might be an all-time high for 2021. At the same time, I’m not entirely surprised people using the hotline because it’s not like in 2021 we were in offices to go and talk to actual managers in the flesh for most organizations.

Nick: Yeah. And I think what you just touched on there we see a rateable decrease, especially during 2020, on those in-office reports, right? So that went from, you know, kind of a third of reports historically to now, you know, about 15% or about a sixth of reports now, and that was due to exactly what you mentioned, Matt. Gio, what were you gonna say?

Gio: Yeah, I was just gonna note that the presentation of these data show that, you know, this is showing reporting rate per 100 employees. And in our benchmark, that’s kind of averaged around that 3.9 or 4 reports per 100 employees. So that’s a helpful benchmark piece. And then, we split that down into its component pieces. So you’ll see how, you know, web forms have kind of stayed around that 10%, the in-office has gone down over time, and that hotline that has gone up. I think it’s particularly interesting that, you know, a lot of people are back in office or in hybrid or something like that now, and that in-office in-person piece has gone slower. That might be idiosyncratic to, you know, phasing out of this, or it might be that people drove that behavior to use the hotline and use the web form and that learned behavior maybe has some inertia and some stickiness.

Nick: Yeah. That’s spot on. So what you need to think…so a couple of things I like to talk about with respect to reporting channels and with respect to, like, reporting rate, there’s two things that you need to think about. So one is how many reports in theory exist within your organization? What do you think that number is? Do you think it’s 10 per 100 employees? Do you think it’s 50? How does that number change when you think that there could be two people that view the same event? Are those two reports? Is that one report?

I think if you look at any of the studies that are out there about workplace wrongdoing, the reports available in your organization from a theoretical standpoint, if everybody was an upholder, if everyone believed the culture, if everybody was willing to speak up, it’s orders of magnitude higher than even the four reports that our clients are seeing. So I think there’s…you know, we’re not running a three-minute mile and saying, “Man, we can sort of shave off maybe 10 seconds of this and that would be…” We’re running kind of a 20 or 25-minute mile where the natural limit is, you know, orders of magnitude, you know, more, you know, faster, I guess, than what we’re experiencing.

So I’m just saying that there’s a lot of opportunity for us to get more reports out of our workforce. That’s one really important piece of the puzzle. And the other thing to really think about is what is that reporting process like. Like when is the last time you tested your line? How does that feel? Right? If you were a chef kind of starting a restaurant, at some point you might wanna put on a disguise and come into that restaurant and see, “Well, what does this dining experience feel like?” Because that’s what people are gonna actually experience, that same sort of law of marketing where, you know, a bad experience where you’ll tell 10 people, a good experience, you’ll tell 2. Those same kinds of dynamics are at play with respect to the speak-up, you know, experience that your teammates have as they call into your line.

So what does that feel like and what tweaks can you make to that to humanize it more to get better results? Because, you know, like I said, even the clients of ours that are, you know, getting five, six, seven reports, there’s five to six times more reports available in their organization that they’re not getting. So what can you do to get more of those reports on the one hand? And then on the other hand, what can you do to process those faster? So those sometimes can feel like competing things, but I think with the right processes in place, you can achieve both of those sort of paradoxical ends.

Gio: Yeah. Nick, I wanna take this from another angle, you know. A lot of what we look at here and what we hear people talking about is they wanna push this speak-up-listen-up culture, they wanna get engagement, and they wanna hear about more of these issues from their employees.

I’m seeing some great dialogue going on in the chat. Keep the chat live, guys. That’s how you get prizes, so keep it coming. Some dialogue coming about people being worried about opening this up to certain issues or certain populations and getting overwhelmed by reports. So, you know, that’s a real thing. Nick, I don’t know if you have, but I’ve never talked to a compliance officer or a leader who’s just like, “Man, I’m so bored. There’s nothing to do. I’m so overstaffed and I have too much budget,” right? We’re all busy. We got so much stuff to do.

So people are concerned about being overwhelmed by their reports, and I’d like to talk for a minute or two about, you know, how to look at that and maybe how to respond to it. I would kind of seed that conversation with one thing around, you know, as you get those reports, if you improve your system, if you improve your intake, so you can triage those better. If you’re getting a report that you don’t need or that isn’t substantiated or should be routed to somebody else, there are things you can do with your technology, whoever your partner and your vendor is for your hotline and your case management, to help you focus more on the things that matter. But I imagine there are some other concerns in this or other approaches to handling the other side of this, of, “Hey, what would happen if I start getting 50 reports per month or something?” What do you think about that Nick or Matt?

Matt: Well, you know, I just wanted to reemphasize a point for all the listeners that, you know, it is true that getting more reports for whatever pains in the neck it might be logistically, this is a good thing.

Nick: Totally.

Matt: The more people report, the more they are really telling you, “We are engaged in the success of the company. We wanna see this company succeed.” And there are other studies Ethisphere has done a lot on ethics research, you know, that kind of show most employees want to speak up when something is going wrong. And, on the other hand, I have worked at organizations where an employee could not be bothered to speak up if the building were on fire, and I suspect several others have had that experience as well.

You know, it is statistically proven, the more reports a company gets, the more engaged the employees are, actually, the better business outcomes you are gonna see. You will get sued less often. When you do get sued, you’re gonna settle for a fewer amount or lower settlement dollars. You’re going to actually get bad press less often. Somebody out in a business university, a business professor out there, they actually study this. There are databases of bad business headlines. If you get more reports, it doesn’t necessarily mean that your company is a total train wreck, it means that your employees are engaged. So that is gonna be a good thing. How do you handle it administratively? You know, Nick and Gio, you guys could talk about that all day long, but that’s separate from the fact that more reports is a good thing, period.

Nick: I mean, it’s 100% true. I mean, you know, you may get sort of a J curve as there’s more things that you’re inundated with. I mean, look at what happened with #MeToo. There was a ton more #MeToo reports. It’s not like #MeToo has been stamped out, right? It’s that it’s not top of mind anymore. So if we can get more reports, then we can really start to crowdsource risk management, and then we can stop feeling like we’re the goalie with no defenders in a soccer game. That’s how so many ethics and compliance people feel. They don’t have the budget. They can’t show their worth. They get all these shots on goal. They feel like they’re defending them themselves. They feel like, you know, “I’m the only person who cares here.” Well, to your point, Matt, there’s a bunch of people who do care, or at least wanted to care at some point, before they got chewed up and spit out by, you know, the sort of, you know, the grinding machine that is sort of many companies where their mission is fake, where their values are fake and so forth.

But there is a ton of people in our workforce who wanna work in high-integrity organizations. They wanna make a difference in the place. They wanna leave it better. Those people are there, and I think when we can sync up with them and we can give them a voice and give them a means by which to speak up and show them that their voice matters, there’s so much magic that comes, and it translates to Matt’s point and, you know, better outcomes, right? It’s a sign. It’s coincident with more employee engagement. If somebody’s willing to raise their hand, they obviously care about their organization, and then we have some slides later where we get into some of the econ of the employee engagement thing, but all the goodness that comes along with a…all the goodness that comes along with a highly engaged employee, you get the benefit from a risk mitigation perspective.

Matt: So let’s pull up the next slide here. So I don’t know if you have any discussion points you want to talk to here. We just kind of went off on a long riff about the proper use of the hotline, but…

Nick: It was a good riff though. That was a good riff.

Matt: It was a good riff.

Nick: So I just think that, you know, what we’ve seen is that as folks have moved over to us, the added reports end up coming through the hotline. I don’t know if that’s because there’s a new sort of redoubled focus on trying to get more reports from a change like that. I don’t know if it’s the fact that we answer our calls live and we’re not racing people off the phones, I don’t know. But the point is there’s a lot of levers that we can pull if we’re intentional about our programs that are gonna drive more of that speak up that, to Matt’s point, is right below the surface. It’s right there for us to tap into. We just have to drill down to that oil, and you’re gonna get a lot of engagement and a lot of those sort of positive externalities from that more engaged workforce where you have these human sensors helping to crowdsource the risk management.

Matt: Sure.

Nick: So we’ve done this analysis across a bunch of different company sizes, and we see some interesting trends on this. Gio, I don’t know if any jump out to you, but there’s a couple that I think are interesting to point to.

Gio: Yeah. And, you know, I think that, you know, the first point is just that this looks different across different organizations, right? So if you’re at…you know, we’ve seen some people say, you know, “I’m at a 200-person organization.” Well, that’s gonna look different than a 50,000-person organization, right? So, you know, across this, the point we made earlier is that in-office and in-person has gone down. You know. I think people continue to be surprised at the level of engagement, you know, across these different company sizes of the hotline. And, you know, I mean, different people have a different opinion on it, but part of what I say is that if, you know, you’re trying to check on your Amazon package, you want as little interaction as possible, right? Show me the app, tell me where it is, let me know when it’s delivered, and I’ll go on my front porch.

If you’re reporting something that is a risk to the organization or a risk to yourself, you know, you probably need some assurance to even engage in that and also want some different feedback for it, so I think that that’s part of it. You know, I think it’s interesting to see here, Nick. One last point is how this, this has gone up across these different company sizes, but it also kind of jumps around from kind of in the middle at the low end to kind of goes up a little bit as you kind of get into the midsize of these company ranges.

Nick: Yeah. And so, you know, that kind of speaks to what I was gonna touch on. You know, everything except from the 10 to 50,000-person we see like a pretty significant increase in hotline intake from 2019 versus 2021. And I think a lot of that, to Matt’s point…a lot of what was, you know, typically done in person is now being pushed to the phone. And what we also saw, which I think we’ll get to a little bit later, is the mix of people making these reports has changed a lot over time in some pretty significant ways. So, you know, a lot of that is driven from the work-from-home environment. We have a couple of questions that I’d like to kind of get to from the chat, and someone was asking…where is this one? You know, are we seeing a real change in our risks in the real change in what’s being reported in this work-from-home environment? What does that look like to you Gio?

Gio: So it’s hard to, you know… I think the types of things reported are different, right? Like when someone’s in the office with people, they’re gonna have different interactions, you know, bumping into people in the hallway or overhearing a conversation than when they’re all kind of sitting at their home or working on Zoom meetings. So I think the types of issues are changing. I think it’s hard to say from where we are whether the latent risk in those issues is different. I think as we do round tables with our customers and help them figure out how to manage risk, manage their, you know, cases and things like that, we hear different anecdotes around, “Yeah, I got a lot more reports, but they’re harder substantiated,” and stuff like that. If the question is around, like, “Is the risk bigger or smaller?” It’s hard for me to rate from where I’m standing, you know, across this population of thousands of reports.

Nick: Yeah. I think it’s idiosyncratic at some level, for sure. Okay. I think we’re good on this slide. We can go to the next one.

Matt: All right.

Nick: Oh, somebody asked what the traditional comparison is. This is the comparison to the NAVEX benchmark report that comes out every year as well. Okay. Go ahead there, Matt.

Matt: Abandonment rates. Here we are. And so, I was curious how would you characterize this? Because I think it tells something important that, you know, people…I don’t wanna say they don’t have faith in the hotline, because, clearly, they called it, but more that there’s something amiss at the hotline that makes it more hassle to the employee than it is worth. So that is I think an important metric because if the hotline is gonna be a useful tool, it does actually have to work for people. And clearly, there is some sense here among some portion of the population that it’s not because they’re giving up. So what can you tell us about this?

Nick: So I like to draw this analogy. So imagine that you just moved to this town and this new restaurant opens up and you see these ads for this restaurant, and it’s a Michelin-star chef and the restaurant looks amazing and you look up the menu and it’s all locally sourced food, and it’s phenomenal. You’re like, “My gosh, finally, some foodie…” You know, “I’m a foodie. I can’t wait to go to this restaurant.” And you show up and the music is great and you sit down and the tablecloth is beautiful, and you order the Gazpacho and some server comes over wreaking of weed and they dump the Gazpacho in your lap, and then they don’t refill your drink, and the whole dining experience just stinks. How many times are you gonna come back to that place? How about zero? How many people are you gonna tell about that? How about everybody? So we can’t be these high, you know, “Hey, we wanna make our world a better workplace. We wanna make our workplaces better. We wanna give our people a voice. We wanna drive integrity in our organization,” and then have a terrible dining experience for the people that we’re trying to crowdsource risk management from, right?

So what does the process feel like? These are human beings in our workplaces, these are not automatons. These are not people just pulling levers on a kind of production line. These are human beings that are their work, that care about what they’re doing. The least we can do is provide a great dining experience for them, meaning we can treat them like a human being, we can not race them off the phone. We can answer their calls live and things like that.

So that is such a silent killer for most of these programs, because just like a bad dining experience is gonna now be top of mind as you’re, you know, talking to your neighbors and talking to your friends in town, a bad speak-up experience when you put yourselves into their shoes and you empathize with what it takes for somebody who maybe spoke up somewhere else and got fired, or maybe has been driving to work with a knot in their stomach because of some injustice that they’ve seen. The amount of courage that they’ve had to bring forward and that emotional journey that they’re on as they go to speak up, we should at least meet them where they’re at with a humanized experience.

And so, you know, so what this slide means is that, you know, the average sort of abandonment rate for an inbound call center is somewhere between 8 and 16%, that’s kind of the range of average with a 12% sort of middle of the road, mean. A world-class organization is doing something between 5% and 8%. That means 5% and 8% in your speak-up solution, 5% and 8% of those are falling by the wayside. And those are fish on the line that you don’t end up reeling into the boat.

So if you do the math on this, if you’re experiencing a 15%, 20% abandonment rate, those are a ton of reports that you’re missing, let alone the second-degree reports that are… You know, we battle in the gray here, right? There’s gonna be a portion of people that are always gonna speak up. There’s a portion of people that are never gonna speak up. There’s a massive amount in the middle of the bell curve that could speak up if they feel like they’re gonna be listened to, if they’re not scared of being retaliated against, if they know the process is gonna be humanizing and they’re gonna essentially be rewarded at some level for, you know, living out the culture and the values of the organization. That’s where our battleground is.

So if the people who are speaking up are saying negative things about that process, there’s gonna be a ton of potential reports that you’re never gonna get. The least we can do as E&C pros who are trying to drive this speak-up-listen-up culture, the least we can do is make sure that every fish that’s on the line gets reeled into the boat.

Gio: Yeah. I mean, this should be the most frustrating and most actionable part of your process, because they’re…you know, frustrating and actionable if it’s off, if you have a 16%, a 12% abandonment rate, you’re doing all of this work to build a culture, to tell people, “Hey, let us know when you care about this. Let us know when you see something. Speak up,” and then someone’s waiting for 12 minutes to say something and they say, “All right, well, they kept telling me to call and I shouldn’t call.” 

This should be a relatively easy thing for you to solve because there’s not a bunch of persuasion and convincing of a person to believe in you and trust in the system and, you know, not be fearful of retaliation. That’s where a bunch of the work is. This is just a service quality that you get done with your vendor. And, you know, you don’t wanna spend all of this time putting this Ikea furniture together and making sure that all the little pieces are in the right place, right? Doing all this work to get someone to call, and then you get to the end and you say, “That took a while. I’m just gonna throw it out.”

You’ve done all of this work by the time they’re engaging with your hotline. You wanna make sure they make it over that finish line. They don’t quit the marathon on, you know, mile 21 or whatever. So this is something that you should be asking about. You should, you know, make sure is tight with your vendor. Or, you know, if you have an internal hotline, make sure that your team is doing this well. This is a thing that those are all…you know, those are the most actionable things. Those are right across the finish line. You can help drag them over…you know, help them over the finish line and get that information, and it hits this flywheel of culture where they say, “Hey, you know what? They said I should speak up. It was a good experience.” And then we go into the next step of, you know, “I heard back from them,” or, “It was resolved,” or, “It was handled well,” or, “I wasn’t retaliated against,” and that’s how you get this whole thing going because it’s not just a one-to-one relationship. As compliance leaders, as ethics experts, we’re trying to drive a culture and a perception across every mind and heart across the organization, and this is a key one where people are gonna hinge where they got so close and they said, “All right, well, I tried,” it’s obviously fake. If you have a high abandonment rate, you can address that relatively easily and it can unlock a lot.

Matt: You know, if I could just chime in with two related points. Over the years, I’ve heard numerous FBI law enforcement types talk about investigations. They often talk about people who come to them with a tip and then it kind of disappears. Their rule of thumb is that you usually have two chances to interact with the whistleblower. They’ll call first, and then they will call back a second time, “Did you hear me?” And if you don’t get back to them after two chances, they’re like, “Well, I guess they’re not interested. I’m out.” And then Lord knows where they’re gonna go at their tip.

So you have about two chances to nail this down and build a relationship with a whistleblower or an informant, or whatever you want to call them. But the other thing that I was thinking about as I was listening to you both, is compliance officers have to remember, if you have a fragment of report, that’s gonna be a real pain in the neck because you can’t unknow that, “All right, well, somebody in the middle east division called up to say they have a big bribery thing, but then they hung up after waiting eight minutes.” You still have some sense that, “All right, maybe there’s something out there,” and you will now spend a lot more than eight minutes trying to get to the bottom of was that real or not. So there is a high incentive to avoid these fragmentary glimpses of something that are just gonna drive you crazy because of an abandoned issue.

Nick: True. And I’m not naming names here, I’m not throwing stones, but I know that there are some providers that those fragmented cases are not winding up in the investigator’s lap. So sometimes the phone cuts out. What are you gonna do with that? Well, are you gonna delete that and just say, “Well, I didn’t have the full case,” and that’s it? Or are you gonna at least give them something? Some fragment of a needle is still better than no needle at all. But it’s a complex thing, you know. And what I wanna kind of also inject here is that… I’m sorry, somebody said something great here. I just wanna share with the group. They said, “There’s no right number of reports per 100. Your benchmark should be against the industry, but more importantly, against your own company quarter after quarter, month after month, year after year. Benchmarking against yourself gives you a true sense of what’s happening.”

So you can start to look at your numbers, and if it’s a large enough company, you should see the similar kind of seasonality, you should be able to tie those back to initiatives and, you know, marketing campaigns that you’re doing to drive those things forward. But benchmarking against yourself is supercritical, but also….you know, and then separately, back to the abandonment rate thing, look at are you seeing any cases that are partially completed with a note that says the call was abandoned, the call cut off, whatever? If you’re not seeing any of those, the chances are that there are some getting caught up in the system, some getting caught up in that intake process that you’re not getting any inclination about. So it’s an important thing to look at, because to your point, Matt, we wanna get that full thing. But if we only have two chances with folks, that may be the second time that they called, so we have to try to get everything that we can.

Matt: Yeah.

Nick: Okay. This is everyone’s favorite. Gio, why don’t you walk us through this one?

Gio: Yeah. So this is anonymity, right? So this is a little bit complex because, you know, on different sides…. So this is did someone report anonymously, right? So, in some senses, depending on where you are on this spectrum of health in your organization, you might want as many anonymous reports as you can get, right? Like if you have a pretty low reporting rate, you might get more people reporting anonymously because, you know, if you can’t report with your name, well, at least report it to me anonymously so I can do something with it. And then, as you get healthier and healthier, you wanna see that anonymity rate go down as people say, “Hey, you know what? This is actually a secure process.” Actually, I know a bunch of friends who reported something and didn’t get retaliated against. So not only am I gonna report anonymously, I’m gonna also step it up and report and give my name so that they can ask questions back to me and we can talk about it and I can find out what happens.

So you might be on either side of that crest of this anonymity piece, but either way, it’s something that you gotta ask yourself and say, “Okay, how many anonymous reports am I getting? And of those anonymous reports, you know, how many of those…” You know, you can compare that against substantiation and stuff. So if you’re not getting enough reports and you’re not getting many anonymous reports, then you can probably get your total anonymous rate up by driving some of these fixes of a culture of trust, rewarding those who speak up, and educate your workforce on the purpose and function of the hotline or your other reporting methods online, et cetera.

So, you know, this can be a tool and you can say, “Hey, my total reporting rate’s low and my anonymity rate is low.” If you’re in that case, you should probably push them both up. If you have a pretty good reporting rate and a high anonymity rate, then some of these things might drive people to report and identify themselves. Either way, as you move through this maturity curve and as you progress to a more actualized, speak-up-listen-up culture, you should be moving toward getting more reports and getting more of those identified. And like we’ve been talking about, if people are afraid of retaliating and if they don’t feel like you have this speak-up-listen-up culture, or, you know, the close cousin to retaliation is this is a comment box over a fire in a barrel, and I’m gonna say something about this and nothing’s gonna happen. Those are things that are gonna draw you toward that less mature cycle.

And, as you push these things through communication, through the experience of your callers, through that word of mouth, right? Like, someone who has a bad experience at a restaurant, at a tire shop, or whatever, they’re gonna tell seven times more people than someone who has a good experience at one of those places. As you get those negative experiences out of the way, you can drive a better culture that, you know, you wanna get to a place ideally where you have a good amount of reports and a bunch of those people feel safe giving you their name, you know. I would say, Nick, I don’t know if you disagree with this, but I would say that, you know, if you have a bunch of reports and you’re not getting in any anonymous reports, you should wonder if those people who are really scared are just not engaging at all. Because, like we were saying earlier, everyone’s on the spectrum of, “I would never say anything,” to, “I’m an open book.” And you wanna try to acquire engagement from different segments of that spectrum.

Nick:Yeah. I think I would agree. Matt, if you go to the next slide, I think this is kind of a framework that Gio was sort of alluding to. So in the bottom left-hand corner here, we have a really low reporting rate of less than 2%. We’re getting less than 2 reports per a 100 people in a really high anonymous rate of something over 50% or over 60%. If you’re in that state, we wanna move to the top right corner, right? We wanna have a higher reporting rate, because a higher reporting rate… Again, maybe there’s 40 reports per 100 employees. If we can get sort of somewhere closer to 8 to 10, four times better than where we’re at in the bottom left, that’s gonna be better.

But along the same way, you know, again, you can’t look at any of these… Very few of these data points you can look at in isolation and say, “Okay, I’m good to go.” So looking at this across two different sort of…two different data points that sort of can tell a more…give you more dimension to the story and, ultimately, more weight to the conclusion that you might arrive at is comparing that to, you know, the anonymous rate relative to the reporting rate. So moving to that top right corner is better. Look, if we have a high reporting rate and everyone’s willing to raise their hand and say, “Yeah, I saw that. Yeah, I’m proud to speak up about it.” That’s gonna be an indication of that positive culture that’s gonna lead to those better outcomes, the Ethisphere, 25% premium on public companies that are “most ethical.” Some of the stuff that Matt alluded to as well.

So how do we start to do this? So I think a lot of what we’re trying to do here is not just give you a bunch of numbers, but we’re actually trying to give you some actionable steps you could take to drive this thing forward. And so in recent “Ethics-verse” webinars that we’ve done together, we’ve talked a lot about, you know, how do we drive this crowdsourcing of risk management. Well, we’re really doing a persuasion path and we’re really trying to affect the hearts and minds of the human beings in our company. So you can do that through storytelling. You can celebrate whistleblowers, whether anonymized or from external sources. You can bring those things forward in your communications, in your trainings, educating people on the purpose of the line and educating them on what this process looks like, what steps are in place to preserve their safety, preserve their anonymity. Something that we found, which we’re trying to get some good data on over this next year…hopefully in our next benchmark report, we’ll be able to have this dialed in, but how many reports start out as anonymous, and then due to our humanized process of treating them like a human being, not racing them off the phone, end up converting to identified? There are some people… I mean, we talk about it all the time on our internal Slack channel of, you know, all these people end up converting because they’re being talked to like a human being. That’s an important number of that gray…you know, those folks that are in the gray. If you can make them feel different in that intake process where they’re able to real-time overcome a fear of being identified or not, that’s a great indication that your program, your communication, your E&C efforts are starting to work.

Gio: Yeah. And I just wanna pick up something from the chat. We got a lot of bonus points. I hope you brought a lot of bonus points today, Nick, because people are really engaging a lot in this. Somebody was asking about what do you do to reward people who speak up? Right? Because that’s a powerful way to reinforce behavior is by rewarding the good type of behavior. So there are a bunch of different things you can do. I wanted to highlight that Su, you know, shared a great thing to our whole community here, where they have a program where they nominate an employee for doing the right thing and they help support other staff or customers. You know, right now at ComplianceLine, we just got a new phase of employee satisfaction feedback, and we put up all the compliments that employees give each other about that. It’s one of my favorite things about being in the office here is seeing that way that people socially recognize each other and reinforce good behavior, doing that type of thing as a compliance team.

And it might be, you know, giving them a mug or giving them some swag or putting them on the newsletter or something like that. That social proof has a really strong way to create bonds within this thing that we call culture within this thing of, “This is how we do it here,” and recognizing people. And, you know, if you want to, you can do it anonymously and just say, “Hey, we had someone in marketing who brought up this thing and we found this risk, and then, you know, we took care of it. Just, you know, an anonymous person or, you know, we’re not gonna tell you their name. We appreciate you doing that.” You can do that kind of safe from a distance, or if it’s in your culture or allowed within the type of issue you can say, “Hey, you know, we wanna really recognize Andy. She spoke up and she did this. And because of that, her whole team is safer and better taken care of,” and things like that. I think that’s a great way to reinforce this behavior. You have to socialize it and you have to pull yourself out of this compliance 1.0 environment where, “Hey, well let’s just keep everything buttoned up and not let anybody know what’s going on because all we gotta do is keep the boss out of jail.” You gotta pull out of that into this compliance 3.0 environment where you gotta talk about some things and you gotta air some things out and you gotta follow up with people and let them know that you know they’re human and people care about what’s going on with this stuff. Thank you, Sue, for jumping in on that.

Nick: Yeah. I love that, Sue. And, you know, whether it’s creating an informal ethics ambassador program, whether it’s using your newsletter or giving talking points to other leaders in the organization to start working it in and providing anecdotal evidence of how whistleblowers and how people who speak up are treated, whether it’s adding a webpage, you know, to your ethics portal that shows here are all the ideas that have come and all the things that we’ve been able to, you know, rectify and fix as a result of people within the organization speaking up, you have to do seven things seven ways. You have to do a hundred things a hundred different ways. We have to try to attack this through a bunch of different angles because we’re dealing with the hearts and minds of people to Gio’s point, and using that social proof is such a critical tool to drive the behaviors that we want.

I just wanna share this one thing. I saw the most compelling ad for Yeti. You know Yeti, the coolers and like the thermoses, I saw the most compelling ad from their, like, director of marketing and it was a video. It was like a TikTok that somebody took off a Yeti that they had pulled off of a boat fire. The whole outside of the thing was melted and they opened it up and all the beers and, like, drinks are in there with the ice still. That is a social proof that’s way more compelling than some corporate thing that they put together, you know, that Yeti Corporate put together, right? So how can you leverage that kind of a thing inside your organization, whether it’s getting somebody who spoke up to do a segment on a TikTok for your internal sort of E&C program, right? So you have somebody who was a whistleblower inside the organization talk about that process versus the CEO who everyone knows, at some level, they’re gonna say what they have to say, right? What’s somebody that you work with who’s had a similar experience? How can I draw that social proof to be even more compelling and more persuasive to drive that behavior change that we’re really going for? This is not an ad for Yeti, by the way, please understand that.

Gio: Well…

Matt: Let’s talk a little bit about the workforce itself here related to anonymous reporting, because one thing that I had thought of as I was reading through the report earlier was, well, number one, the Great Resignation is out there. It becomes easier for employees to feel like, “Sure, I’ll put my name to this because what’s gonna happen? You’re gonna fire me? Oh no, I’ll get another job.” And that is still the case today that. Even despite any fears of recession, the labor market remains very, very tight, but also I do think that there is a generational shift here that I am firmly in Gen X and I think that we might have been more reticent to speak up, especially around say #MeToo issues 30 years ago when I just entered the workforce than say millennials or Gen Z who are more unafraid to express their mind on a lot of ethical issues. So it seems like there’s a couple of different big social factors in the workforce that are driving internal reporting activity as well.

Gio: I think there are a couple of things. Like, our culture is changing, right? Like we’ve gone through this shift in the zeitgeist of we’ve been through #MeToo and we’ve seen…you know, we’ve seen things actually get better for people, or we’ve seen people standing shoulder to shoulder across generations saying, “We won’t stand for this.” So some of this is broadly, you know, across our culture, regardless of what generation you’re in. But, you know, it’s compelling and it’s hard to ignore how coincident this is with the rise in Gen X. So Nick, why don’t you talk about the generational piece of this?

Nick: Well, I just think it’s such an opportunity, right? Like, all the stuff that we get energized by as E&C folks is top of mind for the largest, you know, work or the largest generation to come through our workforce in like two or three generations. So it’s ours to take advantage of. And to Matt’s point, there’s all these sort of economic factors at play, labor mobility is at an all-time high. The cost to switch jobs is at an all-time low. There’s a super tight labor market, so there’s a shift in power toward, you know, employees away from organizations, and you have this massive generation, the biggest one since the baby boomers coming through that are socially minded, that the top layer of their sort of Maslow pyramid of, like, desires is not money. They don’t believe that they’re gonna be millionaires. They believe in justice. They believe in integrity. They wanna drive those things and be part of those kinds of things to a greater degree than generations prior. So it’s on us to take advantage of that opportunity, especially again, so much of our job in E&C is persuasion and so much of our job is showing our value within our organizations.

What a beautiful opportunity we have with this tailwind of generational shift, with what we’re seeing across the economy and the great resignation, and taking advantage of this thing, this retaliation thing. So let’s dive into what this graph is showing us, and then I think we can pull out some interesting things here. So the bar chart going across is the proportion of the workforce comprised of millennials and Gen Zs, which is gonna be over 80% in the next, you know, call it five years. What we’re also charting is SEC whistle-blowing tips. So we’ve seen these skyrocket and these have been… and these have correlated to Matt’s point with the proportional shift in the workforce. Is this because they all grew up with Facebook sharing pictures of their meals and having sort of a voice on social media? Is it that? Is it that they were all raised with, you know, everybody gets a trophy? I don’t know. I don’t really care. It doesn’t matter the why. The what is the fact that they’re right there to start to actualize and turn on from a risk sensor perspective. And then we chart this also against this ECI report. So ECI, the Ethics and Compliance Initiative puts out a study every couple of years, and those most recent one showed a pretty significant uptick in the actual retaliation people who spoke up experience. So that’s explicit and implicit, but the point is it’s four out of five people who actually spoke up were experiencing retaliation.

So what this tells me is that there’s probably a retaliation problem in your organization, unless you think, well, four out of five people getting retaliated against isn’t that big of a deal. Anybody, I talk to, one person getting retaliated against is against the sort of ethos of the type of workplace that they’re trying to create. So there’s probably some level of retaliation going on in your organization. And if you recognize that E&C is the circulatory system that touches every organ in the company, and you recognize the opportunity that it is to have a campaign that fights against retaliation that’s probably going on to some degree in your organization, that now creates an opportunity for E&C to really show their value, you know, in the face of the great resignation by giving people a voice and giving them an opportunity to see that the mission on the, you know, vision and values page on the website and the values on the wall are something more than just aspirational fake marketing, they’re something that’s actually real.

So giving people a voice is like the thing. Fighting against retaliation, if you don’t think it’s going on in your organization, I’m not really sure what to tell you. It probably is. And if you’re not taking advantage of this Great Resignation, the generational shift, the fact that retaliation is likely even perceived to be a problem in your organization, you’re leaving efficacy on the table, you’re leaving the impact that you could be having, you’re letting it kind of slip through your fingers.

Gio: Yeah. And I would just add to that, that even if you hear that and you say, “No, Nick,” you know, “I’ve checked and there’s definitely no retaliation going on, right. I follow up on each of these things and I track employees that reported something and make sure that they’re not fired within nine months or whatever.” Even if you think that you’ve tracked it all, the issue with your culture of trust and listen up is the perception of it. And you’re always having new people join your organization where everyone might tell them, “Hey, you know what? We’re good on that, that doesn’t happen here.” And they say, “You know what? At my past two places, I saw this happen four times across two places, so I’m just not gonna trust it. That perception, that worry, that concern that it might be there is really the thing that’s keeping people from speaking up, and that’s what you have to fight on an ongoing basis as people read a story about it, as they, you know, come into your organization from somewhere else and you have to be constantly working against that force because there’s a natural force in our culture for people to hear about that stuff, wonder about it, be worried about it, et cetera, and it’s on us to make them feel comfortable about it.

Nick: Well, and look at the employee churn. I know we’re like at time and there’s gonna be a second part to this, Matt. If you wanna jump to slide 37, then we can show people some of the upcoming ethics versus programming that’s coming. But in the meantime, like, the cost of the great resignation has not splashed across the shores of our organizations yet. What I mean is there’s tribal knowledge that has left our organizations, there’s people that have gotten chewed up and spit out or jumped over the fence into what they think are greener pastures that are carrying some organizational baggage with them. So if you think that, you know, everybody coming in is coming in with a clean slate and no baggage, you’re wrong. So the people that have learned. So, it’s both an opportunity and a threat, right?

You don’t know what baggage people are coming in, but they’re also coming in with the opportunity to, like, reprogram them, so to speak, and provide to them a different framework for how your company is different, how your culture is different, how the foundation of integrity that you’re working to reinforce is actually real. It’s a massive opportunity for us to separate, and we’re gonna see a massive separation between organizations that just engage in this E&C, they pay it lip service, they kind of greenwash their way through it, and those who actually see the opportunity in it and those who can pull their…you know, those E&C folks essentially who can pull their chair up to the grown folks’ table and really make their presence known and make their impact known. So great programming coming up… Go ahead, Matt. Sorry.

Matt: Well, I was just gonna say, we are at the end of the hour, so for everybody who is listening, A, there’s a lot more information we didn’t get to, but, B, there is, as you can see, this part two that will be coming up, I think, on July 21st, if my memory serves correctly, where we can go back to continue the rest of this. But we have a lot more material that we will be getting at. But Nick and Gio, if you just want to give any other closing thoughts here, and then we can continue it in two weeks.

Nick: Yeah. You know, my closing thoughts are I love the game that we’re in, I love the ethics and compliance community, and the impact that we can have on our organizations and the people and their behaviors within them. So this is like the tip of the spear to me. This is the way that we can really turn on the crowdsourcing of risk management and turn on risk management at scale which so many of us really struggle with, and it’s really simple. We just have to humanize the process. We just have to be a little bit intentional about what we’re putting into place and really using both our marketing prowess, right, and using the technology that we have at hand to make small tweaks. Remember, everything in life happens little by little and all at once. Nothing grows on that straight line, so you have a lot of the building blocks right now to really 10X your impact in your organization by making some small tweaks and some subtle rethinks to how you’ve been doing things.

Gio: Yeah. I would just add to that, that, you know, I hope that these things that we’re talking about are encouraging to you. I don’t want anyone to feel like they’re in a place where they’re off some of these benchmarks and, “Hey, this must be terrible.” We’re always tasked with the hard job to move our organizations forward, to make them safer, more trusting, stronger culture, and build this culture of speak up. So wherever you find you are in that journey then, you know, I hope that this gives you, you know, a sense of where you are, a sense of where you could get to, and some actionable steps to move forward.

And ,you know, you should have gotten those throughout the chats. Some people were dropping some great ideas. And finally, make sure before you close out of this, you check the chat. There are a bunch of people putting their LinkedIn up so that people can connect with them. And like Nick started out saying, the biggest strength we have is the strength of each other in our community to help us figure these things out. We have a big job to do, but it’s an important job and this Ethics & Compliance community is just stacked with people with a strong mind and a huge heart. So use those people around you, check people’s LinkedIn, connect with them, and you know, find some of that support and those ideas in that momentum, because we can all make our organizations better. Thanks for joining us today.

Nick: A round of applause for Matt, another great webinar, another great EthicsVerse.

Gio: Amazing.

Nick: You ushered us through it, man, once again, thanks so much.

Matt: It was all you guys, and it was all of the listeners too. So thank you everybody for joining us and I hope you’ll be back in two weeks for part two.

Nick: See you guys.

Gio: Thanks, everybody.

Nick: Bye-bye.

ComplianceLine is now Ethico!