One of the most important elements of a proactive and effective loss prevention program is setting up an anonymous whistleblower hotline. In recent years, the hotline has become a hallmark of most loss prevention teams with varying degrees of success. In fact, in the most recent version of the National Retail Security Survey, which is released annually by the University of Florida, 94.9% of respondents have some form of hotline in place. In this day and age, if you are one of the few remaining companies without a hotline, you are missing out on a goldmine of information from your employees.
A 2002 study sponsored by Ernst & Young, LLP determined that 1 in 5 American workers possesses personal knowledge of workplace fraud and 39% of all workers would be more inclined to report fraud if they had an avenue to remain anonymous. With statistics like these, it is clear that whistleblower hotlines have a definite place in the loss prevention landscape.
A few years ago, one of our current clients was looking to implement a whistleblower program. They were concerned the program would not be effective or there wasn’t a need, because they thought employees would express theft concerns directly to management. To their surprise, within the first year of implementing the program, they received 97 calls to the hotline, which resulted in approximately $137,000 in total theft admissions. From the beginning, they implemented a whistleblower program that works; they continue to see outstanding results today.
Many companies, however, find out the hard way that there is a huge difference between a toll-free number and a successful hotline program.
In the following two-part series blog, we are going to look at four key steps to building a successful whistleblower hotline program.
Success Key #1: Market the Hotline Program
Building a successful whistleblower hotline program begins with marketing. Simply tacking up a couple of posters with the hotline number is not going to drive callers to your line. In fact, without collateral marketing to accompany the posters, you could actually do more harm than good.
Employees do not want to feel like anyone is out to get them, and no one likes the “big brother” approach to loss prevention, so putting up a poster for a new hotline number without talking to your employees about it first is going to cause a questionable reaction by employees and possibly hurt morale.
The first step in any new whistleblower program is sitting down with your employees to discuss the program.
Special care should be taken to explain the Company’s philosophy on fraud and business abuse. More specifically, employees should be assured that the Company believes the vast majority of employees are honest, but that a few employees who choose to take advantage of the Company can have a huge negative impact. The employee communication should also include theft methods and red flags commonly seen in internal thefts from your organization.
Keep in mind that marketing your whistleblower hotline program should not be a one-time event.
Ongoing marketing of the hotline should be part of a larger-scale loss prevention awareness program, and employees should be reminded at least quarterly of the purpose of the hotline and when they should call.
Success Key #2: Stress Confidentiality
One of the quickest ways to guarantee the failure of your whistleblower hotline program is creating a perception that the information received will not be kept confidential. One of the biggest psychological barriers to someone calling your hotline is the fear of retaliation. To overcome this fear, employees must be given the option to maintain absolute anonymity.
Companies who simply set up a voicemail box as a whistleblower hotline typically do not experience much success. An employee who fears retaliation will very rarely leave a voicemail on a hotline when they cannot be certain whether or not caller-id is captured or their voice will be recognized.
A successful whistleblower hotline should be staffed with live operators who are trained in interviewing callers. In addition, these operators must be available 24 hours a day, 7 days a week because most callers that fear retaliation are not going to call the line while at work, during normal business hours.
Providing alternative reporting methods, like an online reporting tool, can also increase the likelihood of communication. Some generations feel more comfortable using the computer than the telephone. Moreover, every time you market your program; either in person or though awareness material, you must stress the confidentiality of the hotline. Failing to mention the confidential nature of the line could result in the timid employee forever deciding never to report their knowledge.
Written by Kevin Griggs, Account Executive