Why Functional Trade Compliance Training Matters

An analysis of the many benefits associated with taking a role-specific approach to trade compliance training including:

• Higher Return on Investment
• Higher Levels of Employee Satisfaction
• Drives a Culture of Compliance

Compliance Training: Compliance eLearning courses, Employee compliance training, Global trade compliance training, Export compliance training courses, Export control compliance training, International compliance training, ITAR compliance training, Anti-Money laundering compliance training.

Learn more at: https://www.contentenablers.com/site/online-trade-compliance-training-platform/

Transcript

1. Why Functional Training Matters. Copyright © 2019 Content Enablers Inc.
2. Let’s start with a fundamental question: How often does a one-size- fits-all approach for anything work? Rarely. When it comes to trade compliance training, it almost never works. Why? Simple – the training needs of your compliance practitioners differ greatly from those of your functional staff responsible for sales and marketing, accounting and finance, engineering, human resources, and other roles involved in international transactions and travel. Why? Because their compliance responsibilities are different, based on their roles in international transactions. While this may sound intuitive, most companies still take a one-size-fits-all approach when delivering trade compliance training. Let’s explore four key reasons why functional training matters – and just makes good business sense. Recommended by Regulators If you get down to brass tacks, the business reasons for investing in trade compliance training are to avoid fines and penalties, reputational damage, and even criminal prosecution in the event of a violation and subsequent investigation by government regulators. So, consider this – government organizations – including the Department of Commerce’s Bureau of Industry and Security (BIS), the Department of State (DOS), and the Department of Justice (DOJ), as well as international organizations such as the United Nations, the World Bank, and the Organisation for Economic Co-operation and Development (OECD) – all recommend that companies offer compliance training targeted to specific job functions. For example, the Department of Commerce’s Export Management and Compliance Program elaborates:
3. “By tailoring training to be job-specific, while also providing the big picture regarding the whole process, including some proliferation awareness, your staff will more clearly understand the importance of their export-compliance roles to the company and the nation.” Or more directly stated: “Intermediate training for those employees with export-related jobs or those who regularly deal with export issues should be tailored to the specific job functions of the employees.…” The Department of State’s “Compliance Program Guidelines” recommend offering “education, training, and provision of guidance to all employees involved on exports (including those in departments such as Traffic, Marketing, Contracts, Security, Legal, Public Relations, Engineering, Executive Office).” Given the numerous recommendations from government organizations, it’s clear that companies have a strong incentive to include targeted functional training within their compliance programs. Delivers a Better Return on Investment When it comes to training your employees on trade compliance, efficiency and efficacy are two very important variables – let’s explore each. First, a one-size-fits-all approach would require you to train everyone on the rules and regulations governing export and import activities, sanctions and embargoes, and antibribery and anti-corruption efforts in all the countries with which you do business. This approach would take considerably more time away from core business activities. Let’s break this down into a straightforward scenario using the following variables: Total number of employees to be trained: 1,000 Cost of training per employee: $150.00 Total time per employee to complete the training: 40 hrs. Average employee labor burden per hour: $36.22*
4. “Third parties continue to be the single biggest worry for surveyed CCOs as they conduct their risk assessments, and they employ a range of tactics to manage third-party risks more effectively...32 percent always require training or certification.” (viii) “Export-related training appears to be more prevalent this year than last. There is a substantial increase in training targeted by job function for both EAR and ITAR respondents. This is encouraging since this type of training is not only specific to each group but is ongoing and only helps to foster a culture of compliance.” (ix) A compliance program including well-documented, auditable training will mitigate the risks of penalties and fines – and investing in the right trade compliance training program is essential to mitigating potential penalties, fines, and reputational damage. Delivers a Better Return on Investment When it comes to training your employees on trade compliance, efficiency and efficacy are two very important variables – let’s explore each. First, a one-size-fits-all approach would require you to train everyone on the rules and regulations governing export and import activities, sanctions and embargoes, and antibribery and anti-corruption efforts in all the countries with which you do business. This approach would take considerably more time away from core business activities. Let’s break this down into a straightforward scenario using the following variables: • Total number of employees to be trained: 1,000 • Cost of training per employee: $150.00 • Total time per employee to complete the training: 40 hrs. • Average employee labor burden per hour: $36.22*
5. The one-size fits all approach: Employees 1,000 Cost of training program $150,000 Time investment by all employees 40,000 hrs. Total Investment: $1,598,800.00 Role-based approach: In a role-based approach, some employees may still take 40 hours of total training throughout the year, but this kind of training for some employees may require 10, 15, or 20 total hours of time over the course of a year. Further, the licensing costs for training content would be reduced in a role-based scenario. Let’s assume the following variables: • Total number of employees to be trained: 1,000 • Average cost of training per employee: $100.00 • Average total time per employee to complete the training: 20 hrs. • Average employee labor burden per hour: $36.22* Employees 1,000 Cost of training program $100,000 Time investment by all employees 20,000 hrs. Total Investment: $824,000.00 While the above examples are simplistic, they contain legitimate costs that need to be factored in to an investment in training, particularly given that both scenarios require a substantial investment and that the efficacy of the training is an important variable to consider when calculating true return on investment.
6. In a targeted functional training for trade compliance, it’s not just about reducing the average number of hours required per employee for training – it’s about ensuring that the training content has appropriate context for the individual employee, thus making it more relatable and enhancing its overall effectiveness. Delivers Higher Levels of Employee Satisfaction Over the past 10 years, several studies have linked employee satisfaction to the training opportunities provided by employers. A recent study conducted by Middlesex University in the United Kingdom stated that 74% of the 4,300 workers surveyed indicated that they were not achieving their full potential at their current employer. Another study conducted by online learning company Udemy.com revealed that 44% of respondents cited a lack of training opportunities as a reason they left their most recent employer. A similar study conducted by LinkedIn.com, the world’s largest professional social network, indicated: • 59% of employees joined companies for better career paths or more opportunity, • 45% of employees who left companies cited concern over a lack of advancement opportunity, • 64% of talent professionals say employee retention is a top priority, and • 56% of organizations struggle to keep high-potential and top-performing employees. The LinkedIn research concluded that “a key part of recruiting and retaining great people is providing real learning opportunities to them, which facilitates their career growth.” Given the total cost associated with losing employees, many employers are placing an emphasis on increasing the number of training opportunities available to employees – in fact, the total cost of losing employees can be twice their annual salaries. In LinkedIn’s “Why & How People Change Jobs” (2015), the authors point out that almost one in five employees voluntarily leave their jobs due to lack of development and training. The cost to replace a professional-level employee averages $3,079 per $10,000 of compensation, with a total cost of losing this talent being as high as twice their annual salary when factoring in time to fill and train their replacement, loss of company knowledge, and estimate for risk.
7. Consider that the average compensation nationwide for a technical trade compliance professional is $85,000, and these positions are challenging to fill, with 45 days being the average time this position is open. 10 A combination of functional training that supports career growth and retention of even one of these professionals provides estimated cost avoidance of $26,000 and reduces company risk due to loss of expert knowledge and open compliance positions. Creates a Culture of Compliance Targeted functional trade compliance training that takes the employee’s role and specific compliance responsibilities into consideration will facilitate the creation of a better organization-wide culture of compliance. By placing the content in context with the learner’s role and compliance responsibilities, not only will the material be more relatable, it will be memorable and demonstrate to the employee that compliance really does matter to the organization – it’s about more than checking the proverbial box. While functional training mitigates the risk of potential regulatory violations by improving company compliance, it can also help retain skilled compliance experts. BIS explains how an effective training program fosters a compliant culture: “Through an effective, compulsory, periodic training program for all associated with export transactions an esprit de corps can be built to ensure that your staffs become your compliance partners as you make it easy for them to help you. As you invest in your greatest asset, your people, you go a long way in creating the corporate-culture of compliance, so essential in an EMCP.” Targeted functional training will help ensure that everyone understands their individual compliance responsibilities – and relationship within interrelated processes – and, as training is completed and later reinforced, it will help drive a culture of accountability within the organization, increase vigilance, and help the organization avoid risks.
8. Summary Despite the many clear benefits of targeted functional trade compliance training, many organizations today still opt for the one-size-fits-all approach, believing that targeted functional training costs more to implement. This is not the case with the right training partner, and many industry leaders have already made the shift to role-based trade compliance training across their organizations. “A leader is one who knows the way, goes the way, and shows the way.” - John C. Maxwell If you would like to learn how we can help you implement cost-effective, highly efficient targeted functional trade compliance training, visit our website at www.contentenablers.com or call us at 1-518-587-2846. *Employer Costs for Employee Compensation 2018. U.S. Bureau of Labor and Statistics: https://www.bls.gov/news.release/ecec.nr0.htm About the author: Bradley Kabanuk is the founder and president of Content Enablers. As a licensed attorney and compliance practitioner, he has assisted leading aerospace and defense companies around the globe in redesigning compliance training to present employees with practical and interesting content that applies to their job function, location, and compliance responsibility. Prior to founding Content Enablers, he pioneered the development of Export-Link.com, the first web-based solution for managing the complex international trade process. About Content Enablers: Content Enablers is 100% focused on one thing – delivering the best trade compliance training solutions in the world. We’ve been at this for nearly 20 years, and today our roster of satisfied ongoing customers is a who’s who of the Fortune 500 Global and renowned fast-growth enterprises. Our editorial board and subject matter experts are globally recognized for their expertise and experience in their domains, and we’re deeply committed to ensuring that the content we deliver you is accurate, engaging, and always up to date.
9. 1-518-587-2846 Copyright © 2019 Content Enablers Inc. sales@contentenablers.com www.contentenablers.com