December 14, 2022
Maximizing your compliance budget in 2023
6 Min Read
The volume and complexity of regulatory change is upping the pressure on compliance professionals. And if volatility in the global economy turns into a recession, ethics and compliance programs risk losing hard-won resources.
As many companies worldwide are scrutinizing budgets, ethics and compliance teams must proactively prepare to prove ROI and impact. Now is also the time to adopt new strategies to maximize your compliance budget, whether it increases, stays flat, or gets squeezed.
If your team’s resources receive cuts or remain flat in 2023, follow these recommendations to prioritize resources for critical activities, do more with less, and continue to achieve key outcomes.
Quantifying compliance ROI
In lean times, asking for a budget increase – or advocating against a reduced budget – is a difficult hill to climb. Ethics and compliance practitioners must quantify the program’s positive returns to senior leadership, including the board of directors. Often, this requires the team to devise innovative strategies to leverage data.
Even though ethical companies consistently outperform the market, you must make a case for your compliance budget based on your business’s actual performance outcomes. With data to back up your compliance ROI, it’s much easier to reveal the state of ethics in the company, identify how problem areas present tangible threats, and prioritize resources to mitigate issues proactively. This requires the ability to demonstrate improved performance, for example, year-over-year growth in quality of issues raised with ethics and compliance teams.
An underlying toxic culture threatens long-term success even when a company is profitable. Consider the compliance stakeholders you’re accountable to — shareholders, customers, employees, supply chain partnerships, and reputational risk may all be at stake.
It’s important to measure your organization’s baseline from a cultural standpoint, which may help identify common behavioral patterns that could result in policy violations. For example: Does the organization have a strong speak-up culture? Do employees feel safe to report fraud, bullying, harassment, or discrimination? These questions can be addressed with data from your helpline and employee engagement surveys. If the data shows a need to shore up culture, what are clear action items the team can take to mitigate that risk? Presenting actionable plans that are appropriately sized for clearly articulated problems are far more likely to get resourced.
Building a strong, data-driven foundation based on recent employee input will help your team advocate for resources that align company culture with ethics and compliance best practices.
How can we use data to create tangible value for people outside the ethics and compliance function? Think outside the box with the metrics you consider, and try to collect both quantitative and qualitative data.
For example, you may measure the number of hotline calls processed each quarter. What if you also measured the severity of each inbound call over time? Or were able to show trends in root cause analyses for investigations or issues? You’ll gain insight into improving or worsening conditions, allowing ethics teams to partner across the organization and secure resources for remediation. This will result in tangible improvements to the working experience for employees, which you can then prove to yield significant downstream benefits and value.
Some teams may be gathering data that could be valuable for the ethics and compliance program. For example, the marketing team may be measuring market perception and customer perception of the brand through Net Promoter Scores (NPS) and social listening – consider comparing NPS and social sentiment over time as you work to improve the ethical health of the organization.
Leveraging your budget for the greatest impact in 2023
In the context of shrinking compliance budgets, teams may rethink some of their current investments. How can you leverage the budget you have to pursue the ideal outcomes and positive ROI for your ethics and compliance program?
For the greatest impact, consider how your team is selling your program internally – adopt the mindset that ethics and compliance teams must act like salespeople and marketers for your program. This shift in approach can help employees become stakeholders in ethics and compliance and advocates for your team.
Greater cross-functional collaboration
Ethics and compliance professionals must often play an enforcement role within their organizations. But leading practitioners, as they work broadly across complex organizations, will recognize opportunities to transition from “the department of no” to a team that supports the business and adds value.
The team should identify bureaucratic roadblocks and challenges as they perform their work – then partner with business teams to implement process improvements. By prioritizing the success of those business teams, you build allies and can expect better collaboration over time. Then, measure the impact of your collaboration so you can show ROI, for example, how many processes or controls were enhanced or embedded into the business that requires monitoring and testing?
Be sure to measure and quantify enhanced collaboration outcomes to demonstrate your impact. Consider measuring the number of creative employee engagement initiatives that were deployed or the amount of time saved through scaling or automation.
Predictive versus reactive approach
Adopting a predictive approach to ethics and compliance requires a thorough understanding of reoccurring issues that need resolution. When organizations are caught in a reactive stance, ethics and compliance practitioners spend the bulk of their time putting out fires – addressing problems as they arise and then moving on to the next issue.
Preventative efforts can target issues at the source. Educate employees using engaging intervention methods, and expect better outcomes from your program without significant additional investment.
Behavioral science is a discipline that integrates well with ethics and compliance operations. Since the team is responsible for informing and engaging employees company-wide on policy, understanding how people learn and consume information is critical.
Strategies incorporating behavioral science best practices into surveys and training will likely yield stronger participation and compliance outcomes.
Annual program review and benchmarking
Your annual program evaluation process can yield critical insights without incurring new costs. A comprehensive compliance program review allows professionals to evaluate and benchmark performance, identify gaps, and develop a priority list for 2023.
Download the Annual Compliance Program Checklist
Now is the ideal time to benchmark your program against regulatory expectations, locate problem areas, and advocate for resource allocation in 2023.
Download the program checklist from OneTrust to efficiently identify the leading responsibilities and activities every ethics and compliance practitioner should measure.