The Importance of Improving the Quality of Compliance Training

Fewer than half (48 percent) of 207 companies surveyed by Brandon Hall believe they are highly prepared for a compliance audit. This is a challenge because 77 percent of companies overall say they face some sort of external audit at least annually.

Almost half—49 percent—of organizations consider compliance training to be either a priority or critical to their business, according to Brandon Hall Group research. Clearly, compliance is an issue that affects every company, and failure to execute effectively could result in anything from a sternly written letter to the end of the business.

Learning leaders continually are trying to develop ways to make this training more engaging and strategic. Brandon Hall Group’s latest study of compliance training, completed late last year, gathered insights from organizations around their activities surrounding compliance and regulatory training.

The study found that fewer than half (48 percent) of the 207 companies surveyed believe they are highly prepared for a compliance audit. This is a challenge because 77 percent of companies overall say they face some sort of external audit at least annually. That means the difference between those that are being audited and those that are highly prepared is about 60 percent.

For certain industries, the criticality of compliance increases tremendously. In our study, we grouped the following industries together as “highly regulated”:

  • Aerospace
  • Banking/Finance/Insurance
  • Health Care/Pharmaceuticals
  • Manufacturing

Among these companies, 67 percent say that compliance is critically important to their business —almost 40 percent more than respondents as a whole.

The challenge for all companies is to deliver compliance training in a timely, engaging manner that ensures, in many cases, 100 percent successful completion—a benchmark not required in most other learning areas.

Compliance training typically is seen as a necessary evil from a learning and development standpoint. This probably stems from the fact that compliance directives do not originate from a company’s business strategy, per se. Instead, they are standards and regulations from outside the company that force organizations to develop programs that may not be part of the company’s core competencies.

This is reflected in how different learning programs are ranked in terms of importance to overall business strategy. Training on products and services is No. 1, while regulatory compliance is third.

Importance of Learning Programs to Your Organization’s Overall Business Strategy

1. Job-specific technical skills

2. Products and services

3. Regulatory compliance

4. Leadership development

5. Company compliance

6. Job-specific soft skills

For highly regulated industries, however, regulatory compliance ties with job-specific technical skills for the No. 1 spot. These companies, by necessity, have done a better job linking the outcomes of their compliance training to their overall business strategy. The other important factor to keep in mind is how deep into the organization compliance training can reach. While only a fraction of the workforce might ever see any leadership development training, in many cases, 100 percent of employees will need to finish some sort of compliance program.

How to Make Compliance Training More Compelling

A strong commitment to compliance translates into a better, safer workplace where people are better at their jobs. It also can make a company stand out as an employer of choice by creating a better work environment, demonstrating that the employees’ health and well-being are important, or even making the company known for “doing the right thing.”

Some of the key considerations for compliance training include:

  • Governance
  • Delivery
  • Content
  • Being Prepared

Governance

The complexity of compliance requires input and guidance from many different parts of the organization. One way to do this is to have a group that is dedicated to governing compliance. In highly regulated industries, 92 percent have a group or function dedicated to governing compliance, while only 72 percent of the rest of the respondents have formal governance.

This compliance function can manage the constant influx of new and changing regulations, as well as stay on top of the latest trends in how to effectively deliver compliance training. An effective team will have representatives from each function that touches compliance. Some companies may need to rely more heavily on the legal department, while others may need to have more representation from operations.

Both the overall group and the highly regulated group rely on HR to govern compliance more than any other function within the business (the results for both groups were essentially the same). But clearly, HR is not doing it alone. So the key is to put a team in place, and make sure the relevant functions are represented.

Delivery

On average, a company manages nearly half (47 percent) of its total compliance training with a learning management system (LMS). An LMS can be essential in tracking which employees have completed which training, especially for large organizations. Organizations where compliance is more critical tend to rely more heavily on these systems, using an LMS to manage an average of 61 percent of their compliance training.

A quality LMS can manage just about any aspect of compliance training, ensuring an organization is prepared in the event there ever is an audit. In fact, in Brandon Hall Group’s most recent LMS Trends Survey, features to manage compliance and certification were among the top three requirements for a new LMS, second only to ease of use and robust reporting.

Another reason an LMS may be important is that the most common way companies deliver compliance training is through custom e-learning.

Typically, the classroom is king when it comes to learning. Given the complexity and breadth of compliance training, however, it doesn’t make sense to create a classroom experience around each piece. Instead, a blend of the classroom and e-learning tailored to the needs of the organization, as well as simulations, presentations, and videos makes for the most well-rounded approach.

Determining exactly which blend to use depends on the organization’s unique needs, but our data suggest that companies might want to take a second look at the methods they are using. Many training methods that are considered very effective may be underutilized—such as video.

While no company should expect to deliver all of its compliance training via video, perhaps organizations should be thinking of ways to push out more of their training this way. Videos for learning are considered effective across the board, not just for compliance, so it makes sense to devote more energy here.

The same can be said for simulations, virtual classrooms, and mobile performance support. Pushing out quick compliance updates and check-ins via mobile device is considered highly effective by 33 percent of companies, but less than 2 percent use mobile for compliance training.

Content

Where do companies get all the compliance content that is being delivered via these methods? The reality is that they are creating more than half of it themselves. Despite the myriad providers in the market, including training companies and regulatory agencies, more than half of the content being used is developed in-house.

Whether they are buying content off the shelf or having it customized, companies are not relying heavily on third-party providers, especially the regulatory agencies. This seems counterintuitive since these regulators are responsible for many of the very compliance issues these companies face. One would think they would be the go-to source for the training necessary to meet their requirements.

It turns out that companies just don’t find the content from these other sources all that effective. While 74 percent say the content they create themselves is very or extremely effective, only 42 percent say the same for content purchased off the shelf from training providers. The other sources do not fare much better.

The only thing that comes close is customized content from a training provider. What is clear from this is that organizations are somewhat reluctant to reach outside for their compliance content and when they do, they are looking for customized content that meets their unique needs. It also shows that the agencies responsible for many of the regulations that affect companies could stand to do a better job providing training around their regulations.

Being Prepared

It is very likely that an organization in a highly regulated industry will face a compliance audit at some point. In fact, nearly 90 percent of the highly regulated organizations in our survey face an external compliance audit at some point. That number drops to less than 80 percent for companies overall.

Despite facing the inevitability of an audit, fewer than half of companies in the survey consider themselves as highly or very highly prepared for such an audit. However, 67 percent of highly regulated companies in our survey said they are either highly or very highly prepared for an external audit.

This illustrates an ongoing commitment to compliance that makes them ready at all times and not just when an audit is pending.

David Wentworth is senior learning analyst for Brandon Hall Group, a human capital management (HCM) research and advisory services firm that provides insights around key performance areas, including Learning and Development, Talent Management, Leadership Development, Talent Acquisition, and HR/Workforce Management.

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