NAVEX Global’s 2019 Hotline Benchmark Report

Michael Volkov
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The Volkov Law Group

NAVEX Global’s Hotline benchmark report (here) is an excellent annual report which helps companies to understand how well their hotline and incident management system is operating.  The survey is based on over 1 million reports from 2,738 customers. The NAVEX report also is based on all types of reporting avenues, including hotlines and web-based systems.

Interestingly, NAVEX noted that overall reporting rates remained consistent with 2016 and 2017 levels.  Given the increased focus on reporting and the increase concern surrounding sexual misconduct, I expected reporting rates to increase in this year’s report. 

To increase reporting levels, companies should consider a variety of strategies, including new communications and messaging programs to underscore the importance of reporting concerns.  Also, to minimize the role that fear of retaliation may create in reducing reporting, companies should re-emphasize their policy and commitment to prevent any form of retaliation against employees who report their concerns.

The NAVEX Global report underscored the benefits of expanding an incident reporting system to include sources of concerns beyond hotline and web-based reporting.  Specifically, companies that include other sources achieved 64 percent more reports than organizations that limit reporting to hotlines and web-based reporting.  Reports from these other sources were substantiated at a much higher rate (59 percent) than hotlines and web-based systems. NAVEX noted that reporting surrounding harassment and discrimination increased.  Over the last three years, employee reporting of such concerns has increased, and it is expected that the next year will also see an increase.  As noted by NAVEX, between 2016 and 2018, reports of harassment increased by 18 percent, and between 2017 and 2018, reports of harassment increased by 8.5 percent.  This trend reflects the rise of the #MeToo movement.

NAVEX also observed that the rates of follow-up communications by anonymous reporters fell significantly from 32 to 20 percent.  This trend reflects a curious drop in commitment by anonymous reports to continue communications after the initial report.  Only 10 percent of follow up communications involved additional information relating to the complaint (e.g. additional witness, further explanation of allegation).

NAVEX reported that the average case closure time fell to a median of 40 days, which was an improvement over last year’s report.  This is a positive development but still represents an opportunity for improvement.  This figure includes “routine” human resource matters.  Ideally, for routine matters, a 30-day time period for case closures should be a target.

The subject matter of employee reports is divided into five categories: (1) accounting, auditing, and financial reporting; (2) business integrity; (3) HR, diversity, and workplace respect; (4) environmental, health and safety; and (5) misuse, misappropriation of corporate assets.

Over the last nine years, the percentage distribution of complaints among the five categories has been roughly the same, with the vast majority (approximately 70 percent) of all reports falling into the HR, diversity and workplace respect category.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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