The term “whistleblowing” is a charged and spooky one in global media today. It’s associated with high-profile and politically charged public cases. But upon closer inspection, these cases more accurately describe a breaking point that is reached when proper whistleblowing channels do not exist.
After all, it’s not a wailing siren signalling end-of-days — it’s a sharp whistle blow, intended to direct attention to a specific place or issue. By opening up an internal whistleblowing channel, companies can tap into a free resource that helps them operate with more integrity and efficiency.
It’s a key part of hearing the voices of employees, which is why we recently developed an optional whistleblowing portal for the Winningtemp platform. Read more about this new feature here.
The whistleblowing—engagement connection
One way to look at employee engagement is the extent to which employees regard the company they work for as their own.
By blowing the whistle when they witness misconduct, employees are giving their company the benefit of the doubt and the chance to make necessary corrections before any damage to the brand or investor confidence might occur.
Rather than a threat, whistleblowing reports should be seen as employees actively protecting the interests of the company they work for.
How their goodwill is handled by leadership is a make-or-break moment for company culture. Whistleblowing matters are highly sensitive — they can involve sexual harassment, incidences of discrimination, or reporting the misconduct of someone who could jeopardise their employment. Trust is built when employees are empowered to come forward (anonymously) and they see swift follow-up and concrete actions in response. Greater trust translates directly into greater engagement.
Why building a “speak up” culture is good for your employer brand
The presence or absence of whistleblowing channels makes a real impact on an employee’s perception of their employer.
Social media and sites like Glassdoor have enabled more transparency into how issues within companies are managed, from the employee perspective. If issues are intentionally not handled, this becomes public knowledge in short order. The processes set up for addressing concerns show employees their voices are valued and this will be reflected in how they speak about their company.
Introducing a whistleblowing channel is one of the most meaningful actions an organisation can take to enhance their employer branding. It signals to employees that when threats to their personal safety or integrity arise, they are empowered to speak up.
What’s more, they are empowered to step outside of the line manager hierarchy and raise their issue to a senior member of staff dedicated to handling these reports. If the dynamics on an individual’s team are strained, this channel signals to employees that leadership cares for them and their wellbeing.
Instil a culture of ethics
Perhaps this is one is overly obvious, but the presence of an internal whistleblowing system creates an expectation that employees should report misconduct when they see it. By extension, this also signals that wrongdoing is wrong and is not tolerated. Over the longer term, the employees attracted to your company and the ones that will stay will have the ethical standards that match your culture.
Whistleblowing has financial upsides, too
Perhaps surprisingly, research has found that companies with internal whistleblowing systems are more profitable.
In the 2020 research report “Evidence on the Use and Efficacy of Internal Whistleblowing Systems,” it was seen that companies with whistleblowing systems earn a greater return on assets than firms with absent or underdeveloped ones.
Whistleblowing is connected to higher financial returns in the following ways:
- Brand protection. By catching misconduct and illegal activity early & often, companies protect themselves from public scandals that damage investor confidence. Not to mention customer confidence. The damage that a scandal incurs on a brand is long-lasting and far-reaching. Recent research from Harvard Business School found that share price drops an average 0.7% when news of unethical activity hits the stands, and 1.1% when the issue impacts customers.
- Lower legal fees per year. Companies don’t need to enter as many legal battles. Resources that would need to go into defensive legal action can instead be directed to profit-generating activities.
- Avoidance of theft. With whistleblowing systems in place, incidences of workplace theft and embezzlement are more likely to be caught and reported. It’s a common occurrence, unfortunately. A 2015 study found that organisations in the US with less than 500 employees saw a median loss of $280,000 per year to embezzlement.
Put another way, whistleblowing mitigates a number of different financial risks.
Not only is whistleblowing positive, it’s fast becoming a legal requirement
On an international scale, whistleblowing is one of the most powerful anti-corruption tools out there today. The EU released a directive in 2019 that directs member states to protect whistleblowers from retaliation, as well as expand the availability of whistleblowing channels by mandating that companies set up internal systems.
Outside the EU, the new directive is prompting renewed conversation about local whistleblowing legislation. The UK’s Public Interest Disclosure Act 1998 is under scrutiny, especially in the light of systemic whistleblowing failures during the pandemic. The UK non-profit Protect, which runs a Whistleblower advice hotline, reported that employers ignored 41% of all whistleblowers raising Covid-19 concerns.
The NHS (the UK’s National Health Service) is in the process of implementing a whistleblower policy that encourages staff to raise concerns around patient care quality or safety. The recommended policy, titled Freedom to Speak Up, begins by confirming “...Our senior leaders and entire board are committed to an open and honest culture. We will look into what you say and you will always have access to the support you need.”
The executive’s best asset
The management theory called the Iceberg of Ignorance posits that, in companies without employee feedback systems, frontline workers are aware of 100% of the floor problems faced by an organisation, supervisors were aware of only 74%, middle managers were aware of only 9%, and senior executives were aware of only 4% of the problems.
With serious whistleblowing issues, you want to make sure you’re catching as close to 100% as you possibly can. Confidential, trusted employee feedback channels for whistleblowing will get you there.
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