Online Compliance Training

Online training is a mainstay of compliance training today. Companies recognize that there is no longer a good excuse for failing to train all at-risk employees on the compliance and ethics risks they face. But for some, the next decision has become, do I make my own online training, or do I use training that is available on a turnkey basis? At first there is a superficial appeal to creating your own ' I can do it myself, maybe save a few dollars, and have exactly what I want. But like many first impressions in compliance, there are more challenges here than first meet the eye.

Here is a checklist of things to consider in deciding whether to make your own training or to use an existing turnkey system.

Cost

The logic for a do-it-yourself training project is seductive. If you use a turnkey system, you see the line item in the budget. Of course you already know that online training is less expensive and more cost-effective than trying to train all your employees through personal training. But, looking at the numbers in the online provider's proposal you may be tempted to think, 'do it yourself must be cheaper, right?' The problem with this simple analysis is it misses the real costs. In an online turnkey training system there is a set cost for a known product. The provider does the work, and makes the training happen. For homegrown training the costs are deceptive, and usually substantially underestimated.

Assume, for example, that the company has decided to do as many courses as could have been purchased from a turnkey provider. There are first the direct out-of-pocket costs of creating new training in-house: perhaps courseware to design the courses (assume, although this may be naive, that you will not need to make modifications to the software or pay for upgrades). You need subject matter expertise in all the areas you will be covering. Maybe your legal department is large enough to have all of this talent, or maybe you will need outside counsel. You will want counsel who are well known in their field, since you may need to defend your program some day in court or with a prosecutor. If you are serious about effective training you may then realize at this early stage that online training is unlike other forms of training; you will also need to hire experts in effective online training (remember that bad training techniques in live training are even worse when employed online). You also begin to realize these cannot be one-time costs. To keep the training current, you will need to go through this process on an ongoing basis, as the laws and standards in online training develop further (assuming your experts will always be available for updating). These out-of-pocket costs can be substantial, but they are just the costs that appear on paper.

The true costs of reinventing online training start with the hidden resource costs. The time of a company's in-house staff and experts may appear to be free, but it is not. And in developing training that will go to thousands of employees there may be no end of meetings, reviews and second-guessing of the training. These costs add up, but are often accepted because they do not show up in a line item budget.

An even bigger cost is that of having training that is ineffective. Putting together an effective online training program takes far more experience, expertise and skill than those just starting out ever realize. A top turnkey provider has teams of people who have been doing just this work for years. The fact that a good provider's courses appear seamless and effortless hides the fact that the formula used has drawn on years of experience in compliance training. Do-it-yourself training is highly unlikely to meet this standard of effectiveness. Instead, the company may pour thousands and even tens of thousands of employee hours into sub-optimal training. Enormous amounts of employee time have been wasted through training errors.

Another overlooked and dangerous cost of home-grown training is the opportunity cost for the compliance program. While the compliance staff and the legal subject matter experts are re-inventing the online training wheel and participating in endless meetings to discuss story lines, differences in opinion on what the law means, and whether it is really necessary to inform employees about which section of the Sherman Act is applicable, consider what parts of your compliance program are not getting done. By contrast, while a turnkey online training company is training your 20,000 employees today, you can be setting up the compliance infrastructure in your overseas operations, conducting a compliance deep dive in your procurement organization (see The Measurement Challenge (Part I): Introducing the Deep Dive. 17 Ethikos 7 (May/June 2004), or giving a compliance presentation to your senior sales staff. The cost of failing to address the rest of your program because you were bogged down in learning the ins and outs of online training can be enormous, because key portions of the program are delayed for this development project.

Customization

One advantage of home-built training is that it can be fine-tuned to the details of your company. Employees may respond better to more specific training, based upon the company's actual products and organization. If your company is one that can stay 'on the same page,' this is one reason to consider building your own system.

However, the hunt for exact matching can be surprisingly elusive and even counterproductive. This is so because within the same company you will find enormous variety. One subsidiary's or division's idea of customization is another unit's turn-off. Lessons tailored to one company product line may be objectionable to another line. Examples drawn from sales may have no appeal to maintenance. The list goes on. What matters is not whether the training was grown in a company's own backyard, but whether it is effective ' whether or not the training stood the test of time in the field. While turnkey systems may not be as company-specific, they are customizable enough to meet that test, especially systems that enable you to begin each training session with a message from your CEO and connect employees online to your compliance policies.

Fine-tuning customization can take place when your live trainers make small-group presentations to your highest-risk people. This is when you should do the research on what issues are important in that work group. But if your compliance experts are busy chasing their own tails trying for that elusive company-wide 'customization,' they will never have time for the real customization that matters. Online cannot replace this small-group training for your highest risk employees.

Safety

There are areas where it may make sense to experiment and try one's wings in learning a new area. Assuring that your company complies with federal criminal law is not one of those areas. Turnkey online systems have been tested in the marketplace with hundreds of thousands of employees. They are developed and backed-up by nationally known and recognized compliance experts. There will be no allegations by a suspicious prosecutor that your training contained a hidden message or an 'eye-wink' that something improper was really ok. You will not face sexual harassment charges because the avant-garde approach your HR person insisted on in the EEO training course offended employees in one of your work units. You will not be challenged on why your training omitted some issue that everyone else in other companies has been trained on because it was in all the turnkey systems. When you are deploying training to thousands of employees, you want to be sure you will feel comfortable explaining everything in it (or not in it) to skeptical outsiders.

Quality of the Courses

Compliance training has often suffered from a misunderstanding of what makes training effective. Many still think that all you need for training, whether in-person or online, is to find a lawyer who knows the law in the area in question, and just turn him or her loose on the sales and marketing people. Of course, any salesperson who has sat (or dozed) through such sessions will immediately set you straight on just how ineffective those can be.

The effectiveness of compliance training on the Web really draws on three different quality elements:

• Quality of the subject matter content;
• Quality of the training techniques used on the Web; and
• Quality of the technology.

If you miss any one of these the whole project can be a waste or even worse, discredit your program.

There are many examples of mistakes that are common to neophytes in compliance training; one that perhaps best illustrates the dangers is the use of questions. Good online training will include questions to test employees' understanding and make sure they are really engaged. But if you have not lived with this process, you may have no idea just how difficult a balance this is. An effective question must be tough enough that the answers cannot be guessed; easy questions will be insulting to employees and help give the whole program a bad image. Yet, if it is too difficult, employees will not be able to answer and may walk away from the training confused and frustrated. The ability to write questions at this level is a relatively rare skill that takes a great deal of practice. Even for a top online provider it still takes the professional expertise of a team of experienced staff members to formulate questions that work.

Speed and Delay

One of the great benefits of online turnkey training is the marvelous economies of scale that the Web provides. A good online provider can train any number of employees the minute you want them trained. No long development cycle, no drawn out review or testing processes. There is no waiting for the IT department to move on your project. In your company, your own tech people may or may not have this as a priority. For a turnkey provider, this is its priority. Many managers have found turnkey systems are the expressway around these roadblocks of company life. Moreover, the turnkey provider's capacity is enormous, so having another 10,000 employees go online is all in a day's work. Timely training is key here. In the time it takes you to invent your own training, how many employees will have been exposed to serious compliance risks without the necessary training?

Assessing and Covering Risks

A good turnkey provider follows the compliance risk developments and works with large numbers of companies in assessing risks. They draw on that experience to help assure that you have fully accounted for all the compliance risks affecting your industry.

What does your company do about the smaller groups of employees who have compliance risks that do not reach into the thousands of employees? Will it be cost-effective for your company to gear up its whole team of compliance personnel to develop courses for 500 or 100 or even 50 employees? Or will these employees and their risks just be orphaned? A turnkey provider already has the training they need. Whether you have 50,000 employees facing a risk, or just 50, the turnkey provider simply adds them to the mix and they are included.

Conclusion

To be effective, a compliance program must fit the needs of each company. But there is no benefit in re-inventing tools that already have a proven track record. And it's unlikely you'll end up with the cost savings you project. Whatever you decide, be sure you go into this considering all the real costs and benefits that are part of effective online training.

Joe Murphy, a partner in Compliance Systems Legal Group, and Vice Chairman of Integrity Interactive Corporation, has worked in the organizational compliance area for over 25 years. He can be reached at [email protected].

Online training is a mainstay of compliance training today. Companies recognize that there is no longer a good excuse for failing to train all at-risk employees on the compliance and ethics risks they face. But for some, the next decision has become, do I make my own online training, or do I use training that is available on a turnkey basis? At first there is a superficial appeal to creating your own ' I can do it myself, maybe save a few dollars, and have exactly what I want. But like many first impressions in compliance, there are more challenges here than first meet the eye.

Here is a checklist of things to consider in deciding whether to make your own training or to use an existing turnkey system.

Cost

The logic for a do-it-yourself training project is seductive. If you use a turnkey system, you see the line item in the budget. Of course you already know that online training is less expensive and more cost-effective than trying to train all your employees through personal training. But, looking at the numbers in the online provider's proposal you may be tempted to think, 'do it yourself must be cheaper, right?' The problem with this simple analysis is it misses the real costs. In an online turnkey training system there is a set cost for a known product. The provider does the work, and makes the training happen. For homegrown training the costs are deceptive, and usually substantially underestimated.

Assume, for example, that the company has decided to do as many courses as could have been purchased from a turnkey provider. There are first the direct out-of-pocket costs of creating new training in-house: perhaps courseware to design the courses (assume, although this may be naive, that you will not need to make modifications to the software or pay for upgrades). You need subject matter expertise in all the areas you will be covering. Maybe your legal department is large enough to have all of this talent, or maybe you will need outside counsel. You will want counsel who are well known in their field, since you may need to defend your program some day in court or with a prosecutor. If you are serious about effective training you may then realize at this early stage that online training is unlike other forms of training; you will also need to hire experts in effective online training (remember that bad training techniques in live training are even worse when employed online). You also begin to realize these cannot be one-time costs. To keep the training current, you will need to go through this process on an ongoing basis, as the laws and standards in online training develop further (assuming your experts will always be available for updating). These out-of-pocket costs can be substantial, but they are just the costs that appear on paper.

The true costs of reinventing online training start with the hidden resource costs. The time of a company's in-house staff and experts may appear to be free, but it is not. And in developing training that will go to thousands of employees there may be no end of meetings, reviews and second-guessing of the training. These costs add up, but are often accepted because they do not show up in a line item budget.

An even bigger cost is that of having training that is ineffective. Putting together an effective online training program takes far more experience, expertise and skill than those just starting out ever realize. A top turnkey provider has teams of people who have been doing just this work for years. The fact that a good provider's courses appear seamless and effortless hides the fact that the formula used has drawn on years of experience in compliance training. Do-it-yourself training is highly unlikely to meet this standard of effectiveness. Instead, the company may pour thousands and even tens of thousands of employee hours into sub-optimal training. Enormous amounts of employee time have been wasted through training errors.

Another overlooked and dangerous cost of home-grown training is the opportunity cost for the compliance program. While the compliance staff and the legal subject matter experts are re-inventing the online training wheel and participating in endless meetings to discuss story lines, differences in opinion on what the law means, and whether it is really necessary to inform employees about which section of the Sherman Act is applicable, consider what parts of your compliance program are not getting done. By contrast, while a turnkey online training company is training your 20,000 employees today, you can be setting up the compliance infrastructure in your overseas operations, conducting a compliance deep dive in your procurement organization (see The Measurement Challenge (Part I): Introducing the Deep Dive. 17 Ethikos 7 (May/June 2004), or giving a compliance presentation to your senior sales staff. The cost of failing to address the rest of your program because you were bogged down in learning the ins and outs of online training can be enormous, because key portions of the program are delayed for this development project.

Customization

One advantage of home-built training is that it can be fine-tuned to the details of your company. Employees may respond better to more specific training, based upon the company's actual products and organization. If your company is one that can stay 'on the same page,' this is one reason to consider building your own system.

However, the hunt for exact matching can be surprisingly elusive and even counterproductive. This is so because within the same company you will find enormous variety. One subsidiary's or division's idea of customization is another unit's turn-off. Lessons tailored to one company product line may be objectionable to another line. Examples drawn from sales may have no appeal to maintenance. The list goes on. What matters is not whether the training was grown in a company's own backyard, but whether it is effective ' whether or not the training stood the test of time in the field. While turnkey systems may not be as company-specific, they are customizable enough to meet that test, especially systems that enable you to begin each training session with a message from your CEO and connect employees online to your compliance policies.

Fine-tuning customization can take place when your live trainers make small-group presentations to your highest-risk people. This is when you should do the research on what issues are important in that work group. But if your compliance experts are busy chasing their own tails trying for that elusive company-wide 'customization,' they will never have time for the real customization that matters. Online cannot replace this small-group training for your highest risk employees.

Safety

There are areas where it may make sense to experiment and try one's wings in learning a new area. Assuring that your company complies with federal criminal law is not one of those areas. Turnkey online systems have been tested in the marketplace with hundreds of thousands of employees. They are developed and backed-up by nationally known and recognized compliance experts. There will be no allegations by a suspicious prosecutor that your training contained a hidden message or an 'eye-wink' that something improper was really ok. You will not face sexual harassment charges because the avant-garde approach your HR person insisted on in the EEO training course offended employees in one of your work units. You will not be challenged on why your training omitted some issue that everyone else in other companies has been trained on because it was in all the turnkey systems. When you are deploying training to thousands of employees, you want to be sure you will feel comfortable explaining everything in it (or not in it) to skeptical outsiders.

Quality of the Courses

Compliance training has often suffered from a misunderstanding of what makes training effective. Many still think that all you need for training, whether in-person or online, is to find a lawyer who knows the law in the area in question, and just turn him or her loose on the sales and marketing people. Of course, any salesperson who has sat (or dozed) through such sessions will immediately set you straight on just how ineffective those can be.

The effectiveness of compliance training on the Web really draws on three different quality elements:

• Quality of the subject matter content;
• Quality of the training techniques used on the Web; and
• Quality of the technology.

If you miss any one of these the whole project can be a waste or even worse, discredit your program.

There are many examples of mistakes that are common to neophytes in compliance training; one that perhaps best illustrates the dangers is the use of questions. Good online training will include questions to test employees' understanding and make sure they are really engaged. But if you have not lived with this process, you may have no idea just how difficult a balance this is. An effective question must be tough enough that the answers cannot be guessed; easy questions will be insulting to employees and help give the whole program a bad image. Yet, if it is too difficult, employees will not be able to answer and may walk away from the training confused and frustrated. The ability to write questions at this level is a relatively rare skill that takes a great deal of practice. Even for a top online provider it still takes the professional expertise of a team of experienced staff members to formulate questions that work.

Speed and Delay

One of the great benefits of online turnkey training is the marvelous economies of scale that the Web provides. A good online provider can train any number of employees the minute you want them trained. No long development cycle, no drawn out review or testing processes. There is no waiting for the IT department to move on your project. In your company, your own tech people may or may not have this as a priority. For a turnkey provider, this is its priority. Many managers have found turnkey systems are the expressway around these roadblocks of company life. Moreover, the turnkey provider's capacity is enormous, so having another 10,000 employees go online is all in a day's work. Timely training is key here. In the time it takes you to invent your own training, how many employees will have been exposed to serious compliance risks without the necessary training?

Assessing and Covering Risks

A good turnkey provider follows the compliance risk developments and works with large numbers of companies in assessing risks. They draw on that experience to help assure that you have fully accounted for all the compliance risks affecting your industry.

What does your company do about the smaller groups of employees who have compliance risks that do not reach into the thousands of employees? Will it be cost-effective for your company to gear up its whole team of compliance personnel to develop courses for 500 or 100 or even 50 employees? Or will these employees and their risks just be orphaned? A turnkey provider already has the training they need. Whether you have 50,000 employees facing a risk, or just 50, the turnkey provider simply adds them to the mix and they are included.

Conclusion

To be effective, a compliance program must fit the needs of each company. But there is no benefit in re-inventing tools that already have a proven track record. And it's unlikely you'll end up with the cost savings you project. Whatever you decide, be sure you go into this considering all the real costs and benefits that are part of effective online training.

Joe Murphy, a partner in Compliance Systems Legal Group, and Vice Chairman of Integrity Interactive Corporation, has worked in the organizational compliance area for over 25 years. He can be reached at [email protected].