Compliance reporting has dropped 30% since onset of COVID-19, says Gartner

21 June 2022 By Jerome Doraisamy

According to Gartner, the rate of compliance reporting has dropped by 30 per cent from its pre-pandemic levels, meaning that employees are both less likely to observe misconduct and less likely to report it when observed.

Technological research and consulting firm Gartner said that, in the 2018-19 financial year, 25 per cent of employees would observe misconduct and 41 per cent of them would report it. In 2020-21, however, 20 per cent observed misconduct, but only 36 per cent would report it.

Overall, the firm noted, compliance is learning about 30 per cent fewer incidents of misconduct.

In an organisation with 1,000 employees, it hypothesised, that equals 31 fewer incidents of misconduct, but also the extent to which it is coming to light.

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“The increase in remote and hybrid working practices has reduced the amount of misconduct and the potential to observe it,” said Gartner senior director of research for legal, risk and compliance Chris Audet.

“However, what we see in the data is more complex: misconduct such as gifts and entertainment, and travel abuse is falling, but things such as intimidation and unwanted behaviour are on the rise.”

Misconduct is certainly still occurring since the pandemic, “albeit in changing ways”, the firm mused.

“Since the pandemic, employees are a lot less likely to speak up if they sense something is wrong, whether or not the frequency of misconduct is higher or lower,” Mr Audet noted.

“A culture where employees don’t think others are reporting misconduct has negative implications for the business. Employees are less likely to see their company as ethical, less likely to think the company cares about them, and less likely to be engaged in their jobs.”

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There is, of course, a changing landscape for misconduct.

Overall, Gartner reported, remote employees observe 11 per cent less misconduct than their in-office peers.

This is partly driven by a large fall in observed misconduct around travel, gifts and entertainment as opportunities for misconduct in these areas are significantly lower, it went on, however, types of misconduct that compliance typically has a very low tolerance for are holding steady or on the rise.

“Bullying, intimidation and unwanted behavior are up 7 per cent for remote workers; misuse of time and company assets is up 3 per cent,” Mr Audet outlined.

“Sexual harassment is relatively steady at just 1 per cent lower for remote employees since the pandemic.”

Furthermore, new forms of misconduct are “quickly emerging” in a virtual environment, such as inappropriate video backgrounds or online behaviour, Gartner added.

As a result, compliance leaders will need to start thinking differently to reverse the trend.

“Compliance is generally great at putting measures in place that drive compliance reporting in an office setting,” Mr Audet argued.

“For example, nearly all compliance leaders have created multiple reporting channels to boost ease of reporting, and four-fifths have standalone anti-bullying or anti-retaliation policies.”

What some compliance leaders are missing, he submitted, is that remote workers “have a fundamentally different relationship with their employers, in which it’s much easier for apathy to creep in because for many people the business is at arm’s length”.

“For remote workers, when they close their laptop, they aren’t at work anymore: office life isn’t really part of their daily social equation, they aren’t as embedded in the compliance culture,” Mr Audet explained.

“In many situations remote employees are going to tell themselves reporting isn’t the right thing to do purely in terms of self-interest. They are making a cost-benefit calculation and can envisage speaking up working out badly for them.”

Compliance reporting has dropped 30% since onset of COVID-19, says Gartner
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