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The benefits of effective workplace ethics and compliance training

*This blog post was updated on February 16, 2022 to incorporate new data and company services. 

A company’s ethical standards are a major part of its identity, and one of the factors upon which customers will base buying decisions. A company that does not give proper priority to its ethical stance on important matters will suffer in the marketplace. For this reason, developing effective ethics and compliance training in the workplace is one of the most important corporate undertakings—and LRN has the data to prove it. 

The importance of ethics and compliance training 

The 2022 Ethics & Compliance Program Effectiveness Report confirms what our research has demonstrated year over year: putting values at the heart of ethics and compliance programs is the key to making them more effective. The report identifies striking differences between “high-impact” and “low-impact” E&C programs—in the role values play, the importance placed on E&C considerations in decision-making, and the support E&C receives from leadership.  

  • The data show that high-impact programs are 50% more focused on values than low-impact programs.  
  • High-impact programs also do a better job—by 36 percentage points on average—at making ethical behavior a significant factor in the employee life cycle of hiring, performance evaluation, promotion, and bonus decisions.  
  • These programs also have more stature, resources, leadership support, and impact on business decisions than low-impact programs, with an average gap of 27 percentage points. 

The LRN Benchmark of Ethical Culture report, a multi-year research effort with data drawn from nearly 8,000 employees across 17 industries and 14 countries, builds on this further with conclusive proof that ethical cultures—a byproduct of effective E&C programs—don’t just protect corporate reputations, they also propel the bottom line. Companies with the strongest ethical cultures outperform—by approximately 40%—across all measures of business performance, including levels of customer satisfaction, employee loyalty, innovation, adaptability, and growth. 

Why ongoing ethics and compliance training in the workplace matters 

Regulations on compliance, which often cover ethical practice, change at a bewildering pace. Even professionals in the field find it hard to keep track of the law. It is hardly surprising that the ordinary member of a workforce, no matter how well-intentioned, may not be familiar with the laws that apply to their industry. And yet non-compliance may carry heavy penalties.   

Nowadays, most companies include workplace ethics training in their onboarding and training of new hires. But it is important to familiarize all members with the ethical stance of your company—including advice and instructions on reporting unethical behavior—no matter their tenure. Even experienced workers can learn something new with more frequent and digestible ethics and compliance training, whether they’re watching a video about workplace conduct or taking part in a short classroom exercise or lecture. 

How effective E&C training impacts public perception 

According to the 2022 Edelman Trust Barometer, business remains the most trusted institution in wider society. That said, there is a growing expectation of businesses to do more in order to gain public trust. Organizations that take care to foster ethical cultures are the ones that will likely go far in fostering trust as well. According to a 2021 PwC survey, when there was trust in a business 49% of people increased their purchases—and 33% even paid a premium for trust. In addition, 73% of business leaders concurred that trust helps a lot when building customer loyalty. Between 48% and 58% of business leaders said that trust also helps in critical areas such as reputation, revenue growth, and brand. 

Emphasizing prevention and positivity in the workplace 

To avoid falling foul of compliance laws, organizations must ensure that every member of their workforce is not only aware of relevant laws and regulations, but also adheres to them. That does not mean that employees must be experts in every aspect of regulatory compliance. However, the organization as a whole is under a legal obligation to know the existing regulations and remain abreast of developments in the field of ethics and compliance. 

Experts in workplace safety and well-being are also emphasizing the importance of courtesy and consideration, which helps prevent non-compliant situations and even boosts workplace productivity. Without effective E&C training, unchecked misconduct such as bullying, harassment, or discrimination can cause team members to be less efficient, more accident-prone, and exhibit increased levels of absenteeism. 

But the best ethics and compliance training does not focus solely on prevention and the legal aspects of workplace compliance. Effective training also focuses on the benefits of a friendly and safe working environment, where employees are treated well and feel able to speak up if they have a concern. Leveraging the power of the positive, as LRN Director of Thought Leadership and Best Practices Susan Divers writes, can significantly build trust and drive ethical behavior. 

The key takeaway 

Leading with values in company ethics and compliance programs is the key to making them more effective internally and externally. To learn more about the data behind E&C program effectiveness and behind building an ethical corporate culture, check out these resources.