Small businesses are hit hard when it comes to the regulatory environment, especially now that the cost of compliance has risen above inflation. Research has found that the compliance bill for companies with fewer than nine employees, at £164 per employee, is nearly seven times higher than the cost for companies with 50 or more staff. Advisory costs, external supplier costs and time spent understanding new regulations feature heavily in this burden.
This year will bring with it new regulations, not least the European Commission’s Digital Single Market and the resulting requirements for businesses. The Digital Single Market should reduce regulatory complexity, but it will also call for businesses to make some changes to comply with, for example, the EU General Data Protection regulation. It will initially apply just to businesses with over 250 employees, but over time, the new data protection regulations will affect all sizes of business and will govern the security and management of employees’ and customers’ personal data.
There is one way, however, that small businesses can prepare for its impact and that of further regulatory change, and that is by creating a sustainable culture of integrity. Creating this culture and empowering staff helps foster a culture of responsibility which enables best practice, minimises risk and drives compliance. There is also evidence that it improves financial performance: research from CEB found that those companies it surveyed with the highest integrity ratings were more financially successful. Employees need to understand how their actions impact on the success of the business, and of achieving compliance.
Here are a few steps to help you create a culture of integrity across your business:
Implement clear policies, processes and procedures
Implementing policies, processes and procedures and adopting best practice will help your organisation drive improvements and efficiencies. From something as straightforward as adopting a clear-desk policy, to adopting new, transparent accounting practices, policies and processes will drive improvements across the board. It will also mean your organisation is risk-aware and well-positioned to cope with regulatory change.
Create a code of ethics
A clearly-defined code of ethics provides a framework for a business with strong values, which attracts and retains talent and drives performance: people want to work for, and do business with, organisations they trust and respect. The media reports examples of businesses that have suffered security breaches or experienced fraudulent behaviour, on a regular basis. These companies have a long way to go to rebuild customer trust and reputation. A code of ethics provides guidance on decision-making and sets expectations for behaviour and practices.
Encourage accountability and ownership
Understanding how behaviours impact on customers is crucial in creating a culture of integrity and driving compliance. Customer-facing staff will be well aware of this, but for back-office staff it may not be so easy to understand how and why their behaviours affect customers. Facilitate interaction with your customers across all functions in your business, whether allowing time for customer visits or conversations, or inviting customers to your office to talk about how your organisation drives their results. Encourage ownership wherever and whenever you can – when they have an issue, customers want ‘owning’, and fast resolution of their problem. Empowered staff fix issues without having to source management approval. Recognise and reward these behaviours.
Educate, engage and empower
Making employees aware of risk, and the responsibility they have in minimising this risk, plays a critical part in creating a culture of integrity. Training and education is key across a diversity of different learning environments, from management briefings and face-to-face training sessions to online learning and webinars. Creating a culture of integrity begins at the recruitment stage, and is maintained throughout the employee’s journey with you, so taking time to drive employee engagement pays off.
Communicate, and encourage a response
Creating policies and procedures, of course, doesn’t mean a lot unless they are communicated using a diversity of channels, perhaps across an Intranet if your organisation has one, or in the form of meetings, posters, emails and across digital networks, with the same message across every channel. And remember that communication works both ways: make sure staff can respond, raise issues and identify risk in a confidential environment. Share examples of best practice from across the company, so staff can identify with the behaviours required within a culture of integrity.
Focus on best-practice security, especially if your business encourages BYOD
Bring Your Own Device is now a standard state of play: in fact, analysts Gartner predict that by 2017, 50% of employers will require employees to supply their own device for work purposes2. Many staff prefer to use their own tablets, laptops and smartphones both in the office and at home, and businesses can use this to their advantage: it reduces spend on IT, it enables staff to select their own fit-for-purpose applications and tools, it enables mobility and it’s motivating and respectful. But there’s no getting away from the security threat it presents: unsecured applications pose a risk to a corporate network, leaving it vulnerable to attack; there is a risk of devices being lost or stolen, putting corporate data at risk; and there are concerns about data leakage across mobile platforms. Auditing and informing staff, and creating security-focused policies and procedures needn’t require a huge investment of time, and will mean that employees are versed in security best-practice.
Equip staff with tools that drive compliance
Even well-intentioned staff will be disheartened if they don’t have access to the right technology and tools. This needn’t require major capital investment: cloud platforms, for example, enable cost-effective, secure sharing of digital documents. Hardware such as document inserters can be leased, rather than purchased outright, and those based on file-based processing have the highest standards of security built-in for maximum document integrity.
Integrity matters. It matters to employees, customers, prospects, suppliers and stakeholders. A change of culture will take time, but leadership engagement will help. Time taken to drive a culture of integrity is time well-spent.
By Ryan Higginson, Vice President, Global Inside Sales for Pitney Bowes