Why is compliance training important?

Written by
Kevin Alster
Published on
June 26, 2024
Table of contents

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Compliance training isn't just about rules, and it's certainly not a box to tick. It's the backbone of any trustworthy business; neglecting it can have catastrophic consequences.

Take Enron, for example. This once-titan of the energy sector collapsed in the largest bankruptcy in U.S. history, with sentenced top executives and a $40 billion lawsuit. It crashed because it deliberately skipped an effective compliance program.

On a positive note, compliance is more of a superpower than a chore. Companies that view compliance training for what it truly is and develop strong compliance training programs are statistically proven to attract the best people, gain investor trust, and keep their customers happy.

In this blog post, we'll remind you why compliance training is so important and show you a tool that makes it easy to scale and keep your employee training up to date.

What is compliance training?

Compliance training helps educate employees about the laws, regulations, and company policies that apply to their day-to-day job responsibilities. As a proactive approach to managing legal and ethical obligations, compliance training keeps a safe and respectful workplace. Here are some of the main categories that fall under its umbrella — workplace safety, diversity, and data protection training.

Workplace safety training

This type of compliance training is super important because it ensures employees are aware of potential hazards and know how to handle them. Necessary training covers compliance topics like emergency procedures, proper equipment use, injury or health issues prevention, and even sexual harassment.

In various industries, especially those involving high-risk activities or hazardous materials, safety training is not only essential but also compulsory. In these instances, the mandatory training is governed by industry regulations. 

For instance, workers in the construction industry must undergo safety training to comply with regulations and standards. Similarly, employees performing on-site electrical work are required to maintain up-to-date certifications to ensure they are knowledgeable about current safety practices and protocols.

(Template/Example) Noise Exposure Safety

Diversity training

An inclusive workplace is fostered by educating employees on the importance of diversity. Such compliance training includes sessions on cultural sensitivity, unconscious bias, and anti-discrimination laws. 

Diversity training can be particularly effective in larger organizations where the "status quo" has long been accepted. It can help challenge existing norms and promote a more inclusive and equitable working environment.

Example: Diversity dilemma video course

(See the full interactive course here.)

Data protection and privacy training

With infosec and IT compliance training, employees understand how to handle confidential data responsibly and comply with relevant laws. It focuses on data security best practices, such as using strong passwords, encrypting data, and recognizing phishing attempts.

All companies, even small operations, should implement this compliance training, as data security is a massive risk for businesses of any size.

Password Management 101 (AI Video Template)

Reason 1: Helps your company avoid legal action and fines

Legal compliance makes your company adhere to laws and regulations and helps avoid penalties. Ignoring it has ripple effects in the form of fines, lost business, reputation damages, or even criminal charges and potential lawsuits. By contrast, the benefits of compliance are numerous, and investing in it by giving employees proper compliance training is actually cheaper than non-compliance.

Did you know? 🤔

The average cost of compliance is estimated at $5.47 million, while the average cost of non-compliance is $14.82 million.

Following legal regulations is all the more important as regulatory bodies are becoming more and more vigilant. In 2023 alone, companies worldwide paid over $10 billion in fines for various compliance breaches, which could have been avoided with proper regulatory compliance training.

Reason 2: Significantly improves workplace safety

Compliance contributes to a safe workplace and reduces the risk of accidents and injuries by educating employees on safety protocols and hazard prevention. Ultimately, when you reinforce regulations related to safety, you create a proactive culture that stops accidents before they happen. 

Compliance training has an excellent ROI — according to a National Safety Council study, businesses can get a return of up to $6.15 for every dollar they invest in safety training.

Employees who are trained in workplace safety can spot and report potential dangers. They learn how to handle equipment properly, what to do in an emergency, and how to recognize hazards.

In addition to keeping everyone safe, compliance makes the workplace more enjoyable. When people feel secure, they work better and are happier, which is a win-win for everyone.

Reason 3: Prevents data breaches and reputation damages

Data breaches can cost a company millions of dollars, and 88% of these incidents are caused by human error. One of the biggest benefits of compliance training is preventing data breaches and protecting your organization's reputation by teaching experienced and new employees how to handle sensitive information and maintain privacy.

IT and infosec training help your team recognize and avoid:

  • Phishing attempts
  • Social engineering tactics
  • New hacking strategies used by cybercriminals

Employees who know what to watch out for can prevent data breaches before they happen. This not only saves your company money but also protects your reputation, keeping your customers' trust and confidence intact.

Here's an example of effective compliance training on cybersecurity best practices. You can duplicate this video template and customize it for your team and internal security protocols:

A Guide to Cybersecurity: Internal Security Practices

Reason 4: Promotes a positive and inclusive work environment

Compliance training helps teach employees about cultural sensitivity and anti-discrimination practices, allowing everyone to feel valued and respected. Maintaining occupational safety through these practices creates a more inclusive work environment.

This training is especially helpful when it focuses on unconscious bias. That's because it enables employees to recognize and challenge their own biases, making the workplace fairer and more equitable for everyone.

When employees are educated about their cultural differences, the workplace is more inclusive, and every single person on your team has a real chance to thrive and contribute their best.

Reason 5: Builds trust with stakeholders and enhances reputation

If your company consistently follows ethical guidelines, it sends a clear message that you value integrity and honesty. Compliance training helps build trust with clients, partners, and the public, demonstrating a commitment to ethical practices. 

Ethics matter to a lot of customers. In fact, 62% of consumers say that a company's ethical values drive their buying decisions, and 83% would pay more for ethically sourced products.

In other words, people are more likely to do business with you, support you, and speak positively about your company when they know you prioritize doing the right thing. This trust and positive reputation can lead to long-term success and loyalty.

Reason 6: Improves operational excellence and business performance

Excellence in operations is the main ingredient for long-term business success and compliance regulations are essential to it. Giving your employees access to a well-thought-out compliance training program helps them understand the correct procedures they're responsible for and work more efficiently, streamlining processes.

Compliance training is about building a foundation for smooth operations, and you have to think of it as different puzzle pieces. Each regulation or procedure is a piece that, when fit together correctly, creates a clear picture of how the entire company should function. 

Your job is to provide training sessions that ensure everyone has the right pieces and understands how they fit. That's how you get a well-oiled machine that meets compliance requirements, runs efficiently, and avoids costly mistakes.

Reason 7: Boosts employee confidence and morale

Creating a safe and respectful workplace boosts employee confidence and morale. Once your employees understand both the "how" and the "why" behind rules, they feel more confident in their ability to make good decisions and contribute to the company's success. This understanding that comes from compliance training reduces stress about their job responsibilities.

Netflix's book on culture, "No Rules Rules," shows how a strong, positive culture can lead to highly effective employees. By fostering an environment where people feel valued and informed, you'll build a happier, more productive, and engaged team.

What's more, when employees are confident and morale is high, they are more likely to be innovative, take initiative, and work collaboratively. The result is a thriving workplace where everyone feels capable and motivated to do their best.

A quick case study on how to do compliance training at scale

Knowing why compliance training is important is a first big step in applying it. But that doesn't solve the biggest problem L&D departments face in terms of compliance training, which is keeping it up to date.

AI-powered compliance training videos can help reduce confusion and misinformation, improve the effectiveness of training and development programs, and create a more cohesive and efficient work environment.

When LATAM Airlines, the leading airline in South America, started generating AI technical and compliance training, it created 300+ such videos for 16,000+ employees. The company translated these videos into three languages and saved 80% in production time.

With the AI video maker Synthesia, it only takes minutes to turn any text into a video using your web browser. Then, you can edit, update, duplicate, and translate the video in multiple languages with a click of a button.

Here's a quick, 4-minute video that shows you exactly how easy it is to generate videos with Synthesia:

Discover Synthesia in 4 minutes | Product Tour

And here's another one that explains how easy it is to update the videos you create with this tool:

Edit Your Finished Videos in Seconds (Literally!)

Turn compliance documents into editable professional videos

Synthesia' pre-designed templates and collaboration functions make it an excellent option for L&D teams looking to effectively scale and update any compliance training program.

Discover how you, too, can make compliance training fun and create engaging professional training videos with high completion rates.


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