From e-learning tools to compliance blogs, organizations must utilize a variety of tools to ensure their compliance. This can be costly, but unsurprisingly, non-compliance is even costlier. Whether it is in terms of data management, sexual harassment, or discrimination, among others, the failure to comply can result in steep costs for the business, apart from the fact that it can hurt its reputation. With that, in this post, well talk more about the costs of non-compliance, although, we have to admit that it is hard to put a price tag on it.
In one report from the Ponemon Institute, it has been noted that non-compliance costs businesses up to $14.8 million. Is represents an increase of 45% compared to the value in 2011. Year after year, the cost becomes higher, which puts pressure on organizations to do what it takes to master compliance.
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It Results in Hefty Fines
Effective compliance programs are important for the business to operate within the requirements of the law. For instance, there are laws about data management. If the business fails to follow these laws, it can mean having to pay hefty penalties. The good news is that you can avoid these expenses if you just exert effort in training your people and making compliance a part of the workplace culture.
It Disrupts Business Operations
In an article from FMP Global, the author reports that the biggest cost associated with non-compliance is from business disruption and not from fines or penalties. If an investigation proves that a business is indeed non-compliant, the concerned authorities can suspend the existing permits. This paralyzes business operations, resulting in a loss of profit. This can take a long time to address depending on the extent of the problem.
It Hurts Business Reputation
When your customers learn that your business is non-compliant, this affects the way they perceive your company. The public perception can end up being negative depending on what you fail to comply with. In the end, this can hurt the bottom line. So, if you want to build a solid reputation, make sure to emphasize compliance in your business operations.
It Makes Employees Leave
From wage issues to workplace safety, different aspects of compliance will affect the happiness and satisfaction of the employees. Non-compliance can make employees leave the company. This means that there is a risk of losing a valuable asset. This can negatively affect the performance of the business and can drag its profitability. If you want to keep your organizations most valuable asset, make sure that you comply in all aspects of your business operations.
Non-compliance is costly for the business. It can mean hefty penalties, business disruption, and a tainted business image, among other things that will make your profitability suffer.
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