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Gartner Says the Pandemic Has Reduced Compliance Reporting 30%

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A Gartner analysis found that compliance reporting has plummeted since the pandemic, but that doesn’t necessarily mean less misconduct is actually occurring.

The rate of compliance reporting has dropped by 30 percent from before the pandemic, according to Gartner. Research indicates employees are both less likely to observe misconduct — and less likely to report it when they see it.

“The increase in remote and hybrid working practices has reduced the amount of misconduct and the potential to observe it,” said Chris Audet, senior director of research in the Gartner Legal, Risk & Compliance practice. “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 behavior are on the rise.”

Misconduct is certainly still occurring since the pandemic, albeit in changing ways, but compliance officers are hearing about it 30 percent less often than before, as shown in the graphic below.

SOURCE: Gartner June 2022

“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,” Audet said. “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.”

Changing landscape for misconduct

Overall, remote employees observe 11 percent less misconduct than their in-office peers. This is partly driven by a large decline in observed misconduct around travel, gifts and entertainment, as opportunities for misconduct in these areas are significantly lower. Yet, types of misconduct that compliance programs typically have a very low tolerance for are holding steady — or are on the rise.

“Bullying, intimidation and unwanted behavior are up 7 percent for remote workers; misuse of time and company assets is up 3 percent,” Audet said. “Sexual harassment is relatively steady at just 1 percent lower for remote employees since the pandemic.”

Moreover, new forms of misconduct are quickly emerging in virtual environments, such as inappropriate video chat backgrounds and poor online behavior. 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,” Audet said. “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, according to Audet, 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” Audet said. “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.”

 


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