- New research has uncovered a link between hotline reporting systems and better business performance, according to NAVEX Global. The tie suggests that a strong culture in which people speak up about wrong-doing improves business' regulatory compliance. Researchers studied 3 million internal report records from 5,000 public companies.
- The research showed that internal hotline-reporting is tied to higher profits and productivity measured by return on assets; fewer lawsuits against companies and lower settlement costs when they are sued; and fewer outside whistleblower reports to authorities such as regulatory agencies.
- According to researchers, results disproved the assumption that internal whistleblowers are an indication of a troubled corporate culture. Welch said researchers found that high internal whistleblowing activity was a sign of a healthier work environment because reporting allows management to spot and address problems before they become costly.
A whistleblower can be thought of as HR's trusted "eyes and ears," instead of a nuisance employee with an axe to grind. Business leaders dread having an employee go public with a complaint they feel should have been handled internally — and quietly. But workers often feel they have no choice but to go public when their complaints to HR, a supervisor or manager are ignored. Rank-and-file employees on the front line often are in the best position to spot safety or health risks and sexual harassment, theft, bullying and other misconduct.
Brad Cave, partner at Holland & Hart, told HR Dive in a 2017 interview that employers can shift from a defensive mindset about whistleblowers to one that encourages a culture of improvement and welcomes employees' critical feedback. To start, managers should be trained to not retaliate against whistleblowers.
Employers also can make it easier for workers to report incidents and conditions by establishing a hotline they can use to report misconduct without fear of retaliation, just as the study suggested. Employers also can encourage reporting by formally recognizing workers (if they approve) whose observations prevented problems, such as safety violations or health risks, from escalating or becoming disasters.