Compliance is a necessity for any organization. It helps keep your business and your employees running in a safe, respectful, and ethical manner. But unfortunately, compliance is not always easy to enforce. All your sensitivity training and policy-related memos will go unheeded if there’s no accountability — which is why many companies opt to use an ethics hotline.
Should Your Company Have an Ethics Hotline?
An ethics hotline is a designated point of contact (usually a phone line) where your workers can alert management when they witness noncompliance. Whether they’ve experienced sexual harassment, witnessed unethical business practices, or anything in between, the ethics hotline can give them an outlet to alert the higher-ups in the organization.
This type of hotline can be useful…but do you really need one?
Simply put: absolutely!
An ethics hotline is the ideal way for employees to safely and anonymously report noncompliance and other misconduct in the workplace. Even instituting a hotline — thereby indicating that you’ll investigate misconduct — can deter potential bad actors within your office.
Here are just a few of the benefits and ethics hotline can bring to your company.
Encourages Speak-Up Culture
Managers, HR directors, and other top-level professionals cannot be everywhere at once. Therefore, there’s no way to know what’s happening at every level of your organization — particularly not in the moments when your back is turned.
But do you know who can see what workers do on a regular basis? Their colleagues. This means that co-workers in a workplace are more likely to spot non-compliance between one another. A hotline empowers these employees to speak up, as they know that someone higher on the company ladder will hear what they have to say.
In addition to the “speak-up culture” that ethics hotlines create, they can be an effective deterrent for some would-be bad actors. When people know that their co-workers might report them — and that they have the proper recourse to do so — they are less likely to behave poorly in the office.
That said, it is important to note that ethics hotlines do not completely eliminate workplace misconduct. A study from the Association of Certified Fraud Examiners reports that 63% of companies who experience instances of fraud have ethics hotlines. But despite this high figure, these organizations still consider their hotlines valuable; after all, without them, they may not have noticed the fraud until much later.
Provides Key Insights
Your company has a variety of compliance standards for employees to meet. These can include safety standards, industry standards (for example, HIPAA regulations for the medical field), and your specific corporate culture.
If you want your company to run effectively, it is vital that your employees comply with all these standards. But which standards should you emphasize with your team? An ethics hotline can give you valuable insights into which compliance standards and behaviors simply aren’t “sticking” with your employees. This can help you set up more effective training programs or post helpful “reminder” signage around the office.
Avoids Legal Issues or Lost Business
In the United States, over 42% of all lost retail inventory is lost to employee theft. More shocking still, nearly one-third of U.S. business bankruptcies are due to employee fraud! The impact of this type of misconduct can be devastating — but an ethics hotline can help organizations stop fraudsters quickly.
Additionally, ethics hotlines can be instrumental in avoiding issues surrounding employee safety in the workplace. An ethics hotline shows that the company is doing its due diligence to protect its workers, and it provides clear evidence regarding claims made by employees to the hotline. This can help defend your company from a variety of costly lawsuits.
Gets Rid of Fear of Retaliation
What would you do if you spotted non-compliance in the workplace…but the perpetrator was your direct manager? It would be nearly impossible to report that bad behavior to the culprit. Even going to another manager might be a risk, as it could result in your own manager firing you. This scenario is a common one in today’s offices, and it discourages many workers from speaking out against non-compliance.
An ethics hotline eliminates this fear of retaliation. The hotlines are anonymous and typically run outside business hours, giving employees the freedom to make their reports at their own convenience. In this way, you can empower your employees and weed out non-compliance from your organization.
Promotes an Image of an Ethical Culture
Every company wants to have a glowing reputation. A company’s reputation can shape how they work with others in the industry, who apply to work for them, and even who chooses to patronize the business — which, of course, impacts the bottom line. How can an organization boost its reputation with all these target markets? By proving to be an ethical and upstanding workplace.
Using an ethics hotline shows everyone that you care about the well-being of your employees, as well as the industry standards your business should uphold. This will automatically make you look better to the public, which can help boost your business in every sphere from sales to recruitment.
Should You Partner with a Third-Party Hotline Provider?
As you can see, an ethics hotline is a great tool to help promote compliance within your workplace. However, this tool is most effective when it’s NOT a part of your organization itself. Many companies use third-party providers for their ethics hotlines — and here are a few reasons why:
It Provides Anonymity
If your company tasks HR or management with handling ethics complaints, you’re going to run into one big problem: a lack of anonymity. Even if your ethics team promises to keep anything they hear confidential, employees may still feel too uncomfortable to speak to someone they see each day. A third-party hotline offers complete anonymity, like your employees and the hotline operators will likely never be in a room together.
A Live Person Picks Up
One of the most frustrating things about “old-school” reporting methods is the lack of follow-up. An employee can send a memo to HR or to their manager about something they witnessed, but there’s no guarantee that the recipient will follow-up on the memo — or even read it. With a third-party hotline, your employees have a designated group of people hired to hear their complaints. This allows employees to feel heard AND guarantees that no reports get lost in the shuffle.
It Provides Help with Case Management
Managers, HR professionals, and business owners have a lot on their plates. Handling compliance issues can feel like another exhausting task — but it is a very important one. Third-party hotline providers can help professionals through the process of investigating misconduct by managing the case and offering support throughout the process. This ensures that bad actors are held accountable and your company continues to promote compliance.
An ethics hotline can change the way your company operates for the better — and a third-party hotline can help make that change quick and easy.
Giovanni Gallo is the Co-CEO of ComplianceLine, where his team strives to make the world a better workplace with compliance hotline services, sanction, and license monitoring, and workforce eLearning software and services.
Growing up as the son of a Cuban refugee in an entrepreneurial family taught Gio how servanthood and deep care for employees can make a thriving business a platform for positive change in the world. He built on that through experience with startups and multinational organizations so ComplianceLine’s solutions can empower caring leaders to build strong cultures for the betterment of every employee and their community.
When he’s not working, Gio’s wrangling his two young kids, riding his motorcycle, and supporting education, families, and the homeless in the Charlotte community.