The Latest on Internal Reporting Stats

Navex has released its 2023 benchmark report on internal reporting programs, with reporting rates rising to an all-time high — but also some intriguing findings about a jump in the number of anonymous reports and the importance of offering multiple reporting channels to employees. 

The report came out last week, crunching the data on more than 1.5 million reports received by 3,430 organizations in 2022. Navex, a kingpin player in hotline services, has published the report every year for more than a decade and it’s always full of interesting metrics. So if you’re a compliance officer looking for data to help you understand what “normal” reporting activity is, this report is well-worth your time.

(Disclosure: Navex pays me to write guest posts on its blog and to work on other projects from time to time. The company did not pay me to work on the benchmarking report or to write this post; nor did anyone there even see this post in advance.)

So what were the most interesting findings for 2023? We can flag a few items.

• Reporting levels hit an all-time high. The median reporting volume per 100 employees was 1.47 in 2022, up from 1.26 the year before and the highest rate ever since Navex began publishing the report in 2009.
• Rates of anonymous reporting jumped sharply. Anonymous reports accounted for 50 percent of all internal reports in 2021, an all-time low reflecting a long, slow downward trend. In 2022, however, anonymous reports jumped back up to 56 percent of all reports.
• Most complaints relate to HR or workplace respect issues. The median organization had 54 percent of its reports fall under the “HR, Diversity & Workplace Respect” category, up from 50 percent in 2021. The data also shows that the frequency of harassment, discrimination, retaliation, and substance abuse reports all rose in 2022 all increased — a telling signal about the overall health of workplace cultures.
• Intake channels matter. Companies that track reports across multiple intake channels (phone, in-person, email, web submissions) had a median reporting volume (2.08 per 100 employees) nearly double those that only tracked reporting by web submission and hotline (1.08 per 100 employees). That said, each reporting channel had its idiosyncrasies. For example, web submissions were more likely to be anonymous, and also more likely to be substantiated. 

The Navex report has much more data and analysis (75 pages’ worth), including a detailed breakdown of complaints across 24 categories. 

Compliance Points to Ponder

First, compliance officers should consider what this report says about your intake system. Clearly having more intake channels is good; more possible ways to report correlates with more reports received. That’s what the compliance program wants: reports. They are the fuel that drives the ethics and compliance engine, and ultimately better corporate performance.

That said, you also need to be cognizant of those channel-specific quirks, so you can tailor your intake and investigation procedures accordingly. For example, employees still like to talk to live people via the hotline, but hotline calls have a lower substantiation rate than reports that come over the web. So you’d want to train your hotline reps to ask better questions that elicit better answers; but prepare for more forensic work for web submissions since you might never hear from those folks again.

(That discrepancy in substantiation rates between hotline and web feels right, by the way. People are more likely to call the hotline in a sudden burst of anger and determination; those who submit via the web can take their time to compile a thorough report.) 

Second, consider what these findings say about workplace culture and the relationship between compliance and the HR department. HR and workplace civility issues have always been a large share of internal complaints — but even though harassment and discrimination aren’t compliance issues per se (they’re more the domain of HR), those problems can still have a terrible effect on corporate culture. They can also lead to consent decrees with regulators that end up placing significant burdens on the compliance function. So workplace civility issues very much are a concern for the compliance officer. 

For example, if your company has lots of complaints about workplace culture — what’s driving those complaints? What are the root causes? Do you have poor policies around, say, diversity in hiring and promotion, or in incentive compensation? Do you have poor training for new middle managers? Oblivious senior managers, not emphasizing the right ethical priorities? 

Those questions might lead to a long conversation with HR, and perhaps even some contentious debate. But the alternative is to let a bad culture fester, and that does neither function any good.