Team expertise, opinion and industry articles
Achieve Significant Cost Savings through Whistleblowing
Implemented correctly, employee concern and feedback systems provide cost savings through reducing internal theft and fraud as well as improvements in morale that lead to increased productivity.
The key to achieving cost savings through employee feedback programs is developing the right corporate culture and aligning the whistleblowing system to a code of conduct/ethics. This is achieved through confidence gained by employees through the organisation´s commitment to the feedback system.
Fraud and corruption are part of the corporate environment. The 2008 KPMG Fraud Survey of Australian and New Zealand organisations showed that between February 2006 and January 2008, the total cost of fraud reported was $301.1 million, with an average cost for each organisation of $1.5 million.
Twenty-six respondents reported single frauds in excess of $200,000 each. There were seven organisations where the cost of fraud exceeded $3 million. Mitigating such losses results in cost savings.
A similar US study showed the median annual loss suffered by North American organisations with fewer than 100 employees was US$190,000 (AUD 231,000), with the most common occupational frauds involving employees fraudulently writing company cheques, skimming revenues, and processing fraudulent invoices.
The survey reported that of all frauds investigated, 22% were identified by employees, 23% by external third parties and 2% through anonymous letters or calls. Whistleblowing accounts for a total of 47% of all frauds uncovered in the workplace.
Whistleblowing has a vital role in more than just fraud. It can provide cost savings in other areas. The Australian Standard AS8004-2003 Whistleblowing Protection Programs for entities) lists nine different reportable conduct types, including dishonesty, fraud, corruption, illegal (e.g. theft of stock, drug use/sale, violence and criminal damage), breach of Commonwealth/State legislation (e.g. Trade Practices Act or Income Tax Assessment Act) or local authority by-laws, unethical, unsafe workplaces and causing financial or non financial loss detrimental to the interests of the entity.
Breaches of Safety, Trade Practices, Income Tax Assessment and Anti Cartel/ Price Fixing laws all carry significant penalties for companies, directors, officers and executive management and in certain circumstances imprisonment.
A stringent, secure, cutting-edge whistleblowing mechanism can significantly reduce financial haemorrhaging and exposure to risks from inappropriate business and workplace behaviour, resulting in considerable cost savings.
Your-Alert provides a secure, anonymous and easily accessible means to report fraudulent, corrupt and inappropriate behaviour in the workplace. Unlike telephone-based systems, our Web based Solution gives employees and stakeholders the freedom to report fraud at a place of their choosing – at home, an internet cafe or a public library and submit their information confidentially and anonymously online 24/7.
Such unrestricted access has been proven to encourage reporting that leads to the prevention of theft and misconduct. This results in cost savings for the organisation and provides management with three tools in one; deterrence, compliance monitoring and risk mitigation.
Your-Call clients have reported cost savings in the form of reduced shrinkage which they have attributed in part to the presence of Your-Alert ticking away 24/7 in the background monitoring behaviour making people think who’s watching, am I going to get caught?
The Your-Say service adds another dimension enabling companies to unearth further cost savings; not only staff dissatisfaction, but also valuable operational and management suggestions from all levels of the organisation.
Your-Alert and Your-Say sit alongside the organisation´s Code of Conduct promoting honesty, integrity and transparency. They do not replace existing processes for raising concerns or providing feedback but these reporting mechanisms by providing an external independent reporting option to an organisation´s whistleblower policy.
To place trust in existing internal reporting systems without developing an external reporting whistleblower program overlooks the fact that despite a company´s best efforts some people distrust their employer. This means the company may miss out not only on the cost savings but be exposing directors, officers and management to unnecessary risks.
Your-Call treats every disclosure with urgency, ensuring timely and successful transmission of every disclosure, notifying you immediately of crisis situations.
Your-Call’s “iAnalysis” Case Management dashboard and analytics allows companies to create a seamless workflow when documenting, investigating and resolving disclosures (whistleblower complaints) of illegal or unethical behaviour or feedback. From notification to resolution, the company can document activities in a convenient, centralised system maintained by Your-Call that helps you ensure disclosures and information are resolved effectively, efficiently and appropriately.
If you want to implement an effective employee reporting or whistleblowing service that will bring you added cost savings, click here to email us or download our FREE The Ultimate Whistleblowing Checklist on how to establish a best-practice whistleblowing program, or call 1300 788 712 to discuss how Your-Call can best benefit your organisation.