Mary Bennett May 25, 2016
Despite some market turmoil in recent months, this decade’s strong spending in construction continues, reaching its highest point in eight years in January. The growth isn’t just an American phenomenon. From a worldwide perspective, the construction industry has grown anywhere from 4 percent to 7 percent, depending on the region, since 2013, according to statistics portal Statista.
As a result, employment in the industry is increasing meteorically. According to the Bureau of Labor Statistics, both public and private U.S. construction employers added 308,000 jobs from January 2014 to January 2015 — the biggest year-to-year increase since 2009. Full 2016 numbers aren’t out yet, but construction industry job openings rose to a rate of 2.7 percent in January 2016, the highest mark since February 2007.
The growth in construction is now attracting increased scrutiny — not only in the U.S. with more attention to worksites by local, state and federal authorities, but globally with concerns of so-called slave labor and other concerns. And as more employees go to work in construction, effective ethics and compliance (E&C) training programs become essential.
These issues aren’t specific to the construction industry. E&C professionals across all industries are facing similar challenges and are asking myriad questions, such as: Is my training program adapting to the needs of an evolving workforce and emerging risks? Is my organization utilizing its resources in the best way for training? And does this training help defend the organization against legal and regulatory risk?
In its “2015 Ethics & Compliance Training Benchmark Report,” NAVEX Global surveyed nearly 700 E&C professionals across the globe and in various industries, including construction, to gather insights on training practices and to answer these questions.
State of Training
Key findings from the Benchmark Report were enlightening, offering compliance professionals in the construction industry, and others, insights to improve the effectiveness of their training strategies. But a surprising trend emerged: Training across industries for senior leaders, boards of directors and third parties dropped in 2015, while training for other groups increased or stayed the same. The construction industry reflected these findings in two ways — number of courses deployed and time devoted to E&C training.
Construction industry respondents reported that they deploy an average of 0.6 courses to board members annually and 1.2 to senior leaders, middle managers and non-management employees.
The number of courses deployed in construction is concerning because 1.2 courses for all employee groups is well below the average for all industries and lower than almost all individual industries, indicating a critical gap in risk education within this sector.
Construction also reported an average of 0.5 E&C training hours provided to board members annually, 0.4 to third parties, 2.7 to senior leaders, 10.7 to middle managers and 12.5 to non-management employees. This indicates that third parties, who represent significant risk to construction organizations, are woefully undertrained. And while the number of E&C training courses was about the same across all employee groups, the difference in the number of hours between the levels of employees was substantial.
It is not surprising that training hours increase as the employee level decreases. The biggest risk in most construction companies is safety and front line employees who face this risk daily are often heavily trained.
That said, it is shocking to see how little training, in terms of courses and hours, board members and senior leaders undergo in construction and in all industries. When an organization’s leaders don’t model the importance of training — one aspect of “tone at the top” — compliance professionals are challenged to convince employees of its importance.
In addition, deficient training indicates potentially critical gaps in leaders’ understanding of their risks, risk mitigation strategies and compliance oversight responsibilities. These are foundational elements in an effective E&C program, and ultimately in creating a culture of ethics and respect, which survey respondents indicated was a top objective.
The success of internal programs is often challenged by multiple threats — and the same is true with regard to effectiveness of E&C training. For the first time this year, NAVEX Global’s report measured a new benchmark: the biggest challenge to E&C professionals’ training program effectiveness.
According to respondents, the No. 1 threat to the effectiveness of E&C training across industries — with 37 percent placing it at the top of the list — is “employee cynicism,” which is an attitude among employees of frustration, contempt or mistrust toward the business. A close second on the list of challenges was fear of retaliation, with 35 percent of respondents naming it as their top concern.
These issues are particularly damaging when combined with other threats to training effectiveness, including managers who are not exhibiting the right leadership values (34 percent) or those who downplay complaints (26 percent).
Tackling both employee cynicism and fear of retaliation can prove difficult. However, solid management training in how to handle these employee issues, including ways to demonstrate values and handle complaints, can go a long way toward remediating these troubling findings. The real benefit of this education is that, if effective, it naturally helps build a culture of ethics and respect.
While NAVEX Global’s benchmark reports over the years have shown that E&C professionals across all industries are making positive changes and real progress toward truly effective E&C training programs, these reports also indicate these professionals still have many challenges. The reality is, the most effective E&C training programs provide adequate risk training to all appropriate audiences, including those that lead the organization.
As construction continues to boom, it’s more important than ever that E&C professionals within the industry recognize the importance of training and take steps to deploy it in the right amounts, on the right topics, to the right audiences. That helps create the right culture.
Mary Bennett, R.Ph. is vice president of NAVEX Global's Advisory Services team. She previously served as vice president in the Compliance and Integrity office at Caremark, where she implemented the requirements of one of the first government agreements in healthcare. She works across all industries for the Advisory Services team, creating and facilitating award-winning training programs, conducting large and small program assessments, developing compliance communications and helping clients develop best practice programs from the ground up.