Reducing non-compliance through effective behavioral change

By seeking to better understand the human behaviors at play behind these incidents and taking behaviorally-informed steps to mitigate them, companies can foster an enterprise-wide culture in which compliance becomes second nature.

Generally speaking, the fewer barriers there are to compliance, the easier it will be for workers to follow the rules. Alongside lack of (or hard to access) information, unclear processes are a major culprit when it comes to non-compliance. Openly discussing the reasons behind rules and how they benefit everyone can increase acceptance, fostering a deeper understanding and a shift towards a culture of compliance driven by purpose, not authority.

Many traditional compliance programs, consisting of handbooks, training sessions and reminder systems, are based on outdated perceptions of how humans behave and why – and fall short in influencing actual behavior.

Employee training was a $101.8 billion expenditure for US businesses in 2023. Traditional training is usually conducted in large groups, within specific time blocks, led by an instructor and evaluated before participants actually have time to apply anything they have learned. Ineffective training is not only a waste of money, it also fails to meet regulatory expectations – ​for example​, the US Department of Justice (DOJ) ​requires​ companies to assess “The extent to which the training has an impact on employee behavior or operations”.

Research shows that we tend to learn better at our own pace, in our own time and “by doing” – rather than by listening or reading. Training programs informed by behavioral science include personalized learning paths, practical application of concepts, frequent feedback loops, and reinforcement strategies to ensure behavioral change. They also ensure that information is organized and easily accessible. By creating a repository that centralizes all relevant compliance workflows and policies, companies can considerably reduce the chances of employees unknowingly committing breaches.

Generally speaking, the fewer barriers there are to compliance, the easier it will be for workers to follow the rules. Alongside lack of (or hard to access) information, unclear processes are a major culprit when it comes to non-compliance. Openly discussing the reasons behind rules and how they benefit everyone can increase acceptance, fostering a deeper understanding and a shift towards a culture of compliance driven by purpose, not authority.

A “culture of compliance” refers to an environment in which adhering to regulations and internal policies is deeply integrated into the daily operations and mindset of all members. Rather than following the rules out of fear of consequences, employees do so because they genuinely believe in doing the right thing, with compliance seen as a collective responsibility. Compliance culture fosters a mindset in which transparency, integrity and accountability are valued, rather than a regulatory requirement.

Enabling significant, organization-wide change is easier said than done. Senior leadership must be prepared to lead by example, with middle management ensuring that outlined procedures are then adhered to throughout the organization. To make the organization’s expectations in terms of behavior clear, comprehensive training programs that cover the standards and regulations should be made available and tailored to different roles and responsibilities. Employees should feel comfortable speaking up about concerns, with clear channels for reporting issues and avenues for open discussions, suggestions and feedback. Further behaviorally informed steps towards implementing a culture of compliance can include:

• Simplifying processes: Well-designed processes are more likely to be followed. Taking a moment to review and identify potential friction points or complexities can really pay off.
• ​​Incorporating “nudges”: A “nudge” is a subtle intervention designed to influence people’s decisions without restricting their choices, leveraging indirect suggestions and positive reinforcements to guide behavior in a predictable way.​

​​Providing real-time feedback: Real-time feedback enables employees to correct non-compliant actions on the spot, fosters engagement and promotes general awareness of compliance issues. ​However, these strategies must be grounded in an understanding of the organization’s cultural dynamics. Each company is different, and approaches must be carefully tailored to specific requirements. Successful compliance programs aim not only to reduce barriers to compliance while fostering transparency, they are also regularly evaluated and reviewed.

Contrary to what many think, culture is not unmeasurable – an organization’s compliance culture can be evaluated. Doing so and then acting on the findings strengthens a company’s position in the case of an investigation process: monitoring and review are actively advised by the Bribery Act in the UK, Sapin II in France and the Foreign Corrupt Practices Act (FCPA) in the US, which stated that the “DOJ and SEC evaluate whether companies regularly review and improve their compliance programs … [and] will give meaningful credit to thoughtful efforts”.

However, organizational culture is a web of different factors, and measuring it is indeed complex. Organizations should start by identifying the “red flags” of a weak compliance culture, which include a lack of trust in management, discrepancies between words and actions, minimal leadership engagement and unaddressed misconduct. These signs, however, only indicate issues within an organization’s compliance culture, without pin-pointing their origin. There are several methods that can help measure culture more accurately:

• Analyzing retention rates: Examine turnover for patterns related to demographics, responsibilities or seniority that may indicate systemic issues or dissatisfaction.
• Implementing employee surveys: Regular surveys can help measure employee sentiment over time, with questions about experiences with unethical behavior or pressure to compromise ethical standards.
• Measuring Employer Net Promoter Scores: eNPS can serve as an indicator of a healthy compliance environment by helping to gauge overall employee engagement and loyalty.
• Reviewing whistleblower data: Internal reports can help identify trends, such as repeated concerns or mentions of retaliation, in order to assess the organization-wide response to compliance issues.

A mix of qualitative and quantitative approaches is recommended. Exit interviews can be compared with retention rate data, for example, to solicit information about misconduct the employee could have observed, or to understand what drove them to leave. In addition, an effective compliance monitoring plan should encompass short, long, and medium term objectives, the gathering of as much data as possible and meticulous documentation of compliance activities. Workflow automation, using software such as the EQS Compliance Cockpit, can help streamline and simplify data collection, identify trends and document compliance efforts, all while reducing the risk of human error and helping compliance officers measure the efficiency of their programs.