Compliance Unfiltered is TCT’s tell-it-like-it is podcast, dedicated to making compliance suck less. It’s a fresh, raw, uncut alternative for anyone who needs honest, reliable, compliance expertise with a sprinkling of personality.
Show Notes: Managing Compliance in High Turnover Industries
Quick Take
On this episode of Compliance Unfiltered, the CU guys tackle the tough topic of managing compliance in industries like hospitality and retail.
Curious about the impact turnover has on these businesses? Wondering why attrition in this space is so common? Just want to know how to overcome this challenge with the efficiency of a compliance management program?
Then you’re in luck as all these answers and more await, on this week’s Compliance Unfiltered!
Read The Transcript
So let’s face it, managing compliance sucks. It’s complicated. It’s so hard to keep organized and it requires a ton of expertise in order to survive the entire process.Welcome to Compliance Unfiltered, a podcast dedicated to making compliance suck less. Now here’s your host, Todd Coshow with Adam Goslin.
Well, welcome in to another edition of Compliance Unfiltered. I’m Todd Coshow alongside the mint on your compliance pillow, Mr. Adam Goslin. How the heck are you, sir?
I’m doing good, Todd. How about yourself?
I can’t complain. I really can’t.
Today, we’re going to be chatting about managing compliance in high turnover industries. Now, a word has it that the retail and hospitality organizations struggle with getting or keeping personnel. Tell us more.
Sure thing. Well, for the listeners today, if you do happen to, we appreciate you guys listening in, work hard on trying to generate the content, etc. So if you’re listening and you do know somebody in the retail or hospitality arena, introduce them to Compliance Unfiltered, we would greatly appreciate it and it will probably help them out a lot.So that said, the retail and hospitality industries, they have an unenviable distinction. They top the list of highest turnover rates. So the hotel industry on average has an annual turnover rate of 74%. And retail has about two and a half million more job vacancies than job seekers. So there’s all kinds of reasons for high turnover etc, but the one thing that is sure, is that it’s definitely going to have some monumentally devastating impacts on your compliance program. So the compliance management in these industries happens at a couple of levels. So you’ve got kind of at the corporate level and then down at the location level, whether it’s a, depends on the model of the organization, but whether it’s corporate on locations, whether it’s franchises and whatnot at the corporate level, there’s a lot less turnover that disrupts the security compliance program. But the corporate folks are depending on reliable contributions from all the outposts and where you just got this never ending continuous churn of turnover. And so it just, it ups the pain factors, if you will, for just trying to run your damn program.There’s a core group at corporate that handles most of the heavy lifting for security and compliance. If you lose one of them, you’re definitely losing a chunk of skill knowledge out of a single individual. And you’ve got a big task to go in and get their replacement up to speed and a large investment of training, anybody that’s had the joy of teaching someone how to navigate the world of security and compliance knows they don’t start on Monday and they’re running on Tuesday type of a thing. It’s quite literally months of training, experience, in some cases years, but that’s just losing one person. You go down to each of the location levels, you could have dozens to hundreds of locations and each of them is losing employees at a very fast pace. And so that frequent churn has this big multiplier effect. You’re constantly training new people to go in and do the compliance management tasks at each of the locations. It’s extremely challenging to be able to navigate those waters and somehow manage to hold your program in place.
Sure, sure. Now, what type of impact does compliance actually have on these businesses?
Well, the managers are needed to keep the hotel or the store running smoothly and their efforts are primarily focused on training, managing employees, keeping customers happy and operations running smoothly. And for many of them, any of the compliance activities, they’re just seen as an abject distraction from their real job.So the more streamlined, the more consistent that you can make your compliance program, then the more successful the business will be at being able to manage compliance while keeping things moving. Do you want the boots on the ground folks that are critical to running the businesses to be blowing hours at a shot? Or do you want them to spend the extra time focused on making guests happy and hiring and training new staff and connecting with other local businesses to improve the profitability of the location, things along those lines? The bottom line is there’s a lot more productive ways for them to go in and use their time effectively. When you’re looking at tooling to assist with that path, the right compliance management tool can provide simple workflows that save a bunch of time and eliminate frustration. And for a lot of folks, they’ll ask us, hey, how much time is this going to save? And a lot of our clients are able to reduce their manual labor compliance management time by up to 65%. And when you start looking at it at kind of an outpost location model, which is typical of the hospitality and retail establishments, sure, it might be a few hours per location, but now we take those couple hours and multiply them out by the number of locations. You could be taking time savings numbers that are translating into tens or hundreds of thousands of dollars a year that could readily be leveraged to do something better with, whether it’s putting that toward salaries, whether it’s putting it toward some of the other things that those folks could go off and do. Basically, there’s a lot better things that these people can do with their time.
Indeed. Now, how does training personnel for compliance cost these organizations?
Well, the high turnover means that you are continuously spending time and money on compliance management training. It’s a significant investment to get the new higher up to speed on the compliance activities. Every frickin’ time that somebody leaves, it’s like Groundhog Day. You’re going, oh, let’s go restart the training again, et cetera. So getting up to speed, it’s not just a simple, hey, let’s go take five, 10 minutes and here’s a handbook and good luck. It can take weeks to go through, get them adequately onboarded, trained, et cetera, in their compliance management activities.It requires a higher level of oversight for a period of time so that you can do some quality assurance and validate that, okay, well, given the training, but are they actually fulfilling it, doing it properly, et cetera? Not everybody at that kind of local outpost location is going to need to be trained for compliance management activities, but you do have to have some key people that are on site to fulfill that role. The chances are that it’s going to be kind of at a store manager level that’s going to be involved in gathering and submitting compliance evidence, but it’s critical that the managers are kind of well trained for the compliance activities that you’re depending on them to perform. In a lot of cases, it makes sense to provide a combination of training modules and hands-on training and the compliance training would be a lot more effective if you can provide them some type of experiential training through the process. It’s one thing to read the manual of how to fly the airplane and another to sit in the cockpit and take control, right? The same thing comes true when it comes to the compliance management activities.The more that these folks can learn by doing, the more that it’s going to kind of lock in with them and it’s going to make sense to them regarding what they need to do and how to follow and things along those lines.
Most assuredly, now, in general, compliance management is confusing and time consuming. But especially though, especially for those in the hospitality and retail sectors. Why? Fill us in.
Well, performing compliance activities isn’t like riding a bike. It is easy to forget from one year to the next what needs to be done. Common questions that we’ll see are questions even for the people that are still there year over year. What did I give you last year for this particular line item and the last year, the assessor rejected the first three shots at evidence that was passed in. So what was it that I needed to do that finally worked? How are we supposed to locate the files that we need to go in and submit? How do we deliver the evidence? These are common issues, problems, questions that end up happening on these programs. There’s a whole battalion of information that’s readily forgotten from one compliance cycle to the next. Unless the store managers are really good note takers and whatnot, they’re probably just making the same mistakes and same missteps as they did last year and the year before.It creates bottlenecks in a time-sensitive process. We’ve talked about it before that one of the biggest problems, especially when you’re trying to manage a compliance program, is that people will come up with a question, let’s say we have our touch base on compliance on Wednesday at noon and they go to start working on their stuff Wednesday afternoon, let’s say. No sooner they get started and, oh crap, I got a question, what do they do? They write their question down and then they wait for the next meeting, which is next week, Wednesday at noon. You’re dropping gobs of time and you look at the multiplicative effect of all of these delays and evidence gathering, submission, things along those lines, it’s brutal. In high turnover industries, like we’re talking about today with retail and hospitality, this whole problem that folks run into, it’s exacerbated by the fact that you’ve got this high turnover rate and now you’ve got all of these people that are trying to submit compliance evidence that have never even done it before. There may not even be somebody at their location to show them what it was that was done the last go-around. For a good compliance management system, it does a couple of different things for folks. It makes the submission requirements clear, the TCT portal will give you the capability with a button click to have a historical reflection of what it was I provided last year. You can see exactly what was provided, what it was that passed muster with the assessor. You can also have the capability as an organization to leverage customized guidance within the platform so that you can explain things to your people on what needs to be provided and how to submit it. Especially in these industries, there’s a lot of technology-specific lingo, organizational-specific lingo. You can put it in terms that they’ll understand as well, which is a huge plus. Whether you’ve got the veteran employee that forgot from last year or you’ve got the noob that’s just starting to get their feet wet in the compliance process, leveraging a tool like the TCT portal, it makes it really easy to figure out what is it we need, where do we need to get them from, what did I provide last year, how do I go submit it, et cetera. That component gives the franchisees a huge leg up, makes the compliance management activities a lot less stressful because more often than not, you’re now arming these people with being able to get the evidence correct on their first run.
Oh, that’s huge. Now, what type of struggles do they have with evidence submission?
Well… you know, without a solid compliance tool, these high turnover industries, they’re destined to submit garbage for evidence and submit it incorrectly. They’ll put it in the wrong spot, you know, whatever it may be. I, oh gosh, I know this has to get to Mark, but I forget where the hell Mark told me to go put it. So I’m just gonna email it to him, right?Meanwhile, you know, poor Mark, he’s getting, he’s getting people giving him updates in the hallway. He’s sitting in a meeting about the budget and having people telling him compliance updates. People are sending him text messages, leaving them voicemails in his voice. Oh, this is the one that I love. The voicemail on your cell phone or your desk phone that then tells you where they put the evidence. So now not only do I have to go listen to the effing voicemail, but now I’ve got to go and do, you know, go on an Easter egg hunt to go try to find the evidence, et cetera. And I know damn well that people are listening to this. They’re laughing because they know exactly what the hell I’m talking about. But, you know, you’ve got, you know, the more franchises submitting crap, then the more painful it gets to be a corporation. All, they say the crap flows downhill, but not so in this arena, it blows uphill. And, you know, so you got the garbage going, you know, going and heading up to corporate, evidence being, you know, high levels of rejection, you know, things sent back, you know, and for things that need to be tracked down, you know, remedial training, you know, training and retraining happening, you know, with folks on how to do their activities. So, you know, this is just, this is a way of being when you’re in the retail and hospitality arena because this happens all the time, you know, as a result, you know, the operational overhead, you know, starts to become this albatross, you know, this huge, this huge drain on valuable resources, costing money, time, creating headaches, increasing stress levels, you know, and, and, and, and, so, you know, there’s just, there’s a lot of really good reasons for, you know, adopting technology to go in and cure that, you know, take a shot at curing that problem because, you know, the onboarding of the new folks, it’s much faster. You know, first time submitters actually have the potential possibility of being successful right out of the gate. It’s a, it’s a really big deal.
Indeed. How can these organizations take advantage of efficiency gains in their compliance management programs?
Well, you know, not only does the, you know, does the TCT portal, uh, make compliance management suck less, uh, right, uh, you know, right out of the gate, but it, the best part is, is that it gets even better once you get to year two plus, this is the thing that a lot of folks don’t realize with the, with the use of technology and compliance. Yes. You know, with any tool, there’s going to be, uh, you know, there’s going to be efficiency gain efficiencies gained in your year one, but where you really see that take, take effect is in your two plus, uh, because now you’ve got a solid repository of your whole first assess assessment cycle, uh, all the lessons learned, who did what, what did they provide, uh, you know, was it accepted? You know, it was there additional elements of evidence that were needed and, and, and, and all of that comes, you know, comes, comes full circle. Uh, you know, once you, once you get there, you know, year one, you’re building that repository, but year two, you’re taking advantage of it.And, you know, one of the, one of the biggest, uh, you know, efficiency, you know, uh, elements that you can gain once you get to that year two, year two plus, uh, arena is something that we coined as, as operational mode. I think when, when we created the TCT portal and it went live back in 2015, I think it was within, uh, I think it was within a year and a half or two years. We dropped into something called operational mode. Uh, and basically what that does, you know, when you’re on a compliance management program, there’s certain things at all levels that need to be done daily, weekly, monthly, you know, quarterly, twice a year, once a year, and the operational mode just allows the organization to, to stay on track and make sure that nothing’s slipping through the cracks. We’re not getting blindsided by, you know, by unpleasant, uh, unpleasant surprises when you get to the assessment.You know, one of the, one of the main reasons that I, that I bolted operational mode into the platform was as someone helping people maintain their compliance, I would, you know, I would get to that and you will get together, right. And, you know, where, where all of these things that were supposed to be being done all year, uh, were, was an assumption. And so we show up at the annual assessment and, you know, sure enough, the assessor says, Oh, show me, show me your last, uh, you know, your last four quarterly fill in the blanks, or, you know, show me that you’ve, you know, show me the evidence from your daily log reviews or whatever. And sure enough, there’s stuff missing.Um, you know, when we get to that end of the year, which it’s, it’s astoundingly awkward to get to that point because, you know, now I, I, I don’t have a time machine. I can’t go back and, and, and generate things that were never generated. Um, you know, so we’re really in a position of playing.
Have a time machine.
Yeah, you know, trust me, if I had a time machine, man, I think it’d be a whole hell a lot better. But you know, the bottom line is that now you’re sitting there, you’re playing like crisis negotiation with the assessor, you know, where you’re trying to navigate these ways. How the hell do we get through this given, you know, it’s readily evident that we weren’t doing the shit that we were supposed to do.So you know, with a huge, you know, and it’s a big deal when it comes to an industry that has high turnover, because, you know, you don’t have to worry as much about, you know, keeping track of who did what when you’re using technology, because the system takes care of that for you. It’s sending automated reminders to all of your personnel that saying, hey, it’s time to fill in the blank. You know, when you’re using that operational mode, you know, you’re waving goodbye to what a lot of organizations have historically done, which is some four or five month chaos sprint, you know, to try to get prepped and ready and through their annual audit, you know, now you’re not in this big gigantic rush to go gather up stuff that was supposed to be being done. Instead, we’re proactively, you know, gathering up that information. So you know, it saves time, effort, operational cost, anxiety, you know, and the assessors aren’t going to audit every single hotel or retail location, which means, you know, you’re going into your annual assessment. You don’t know which locations are the ones that are going to be included in the sampling this year. You know, are you going to get a bat upside the head with some franchise that wasn’t keeping up with their compliance tasks? You know, now when you’ve got technology working on your side, that operational mode, you know, now gets you into the, you know, into the mode of not only gathering up the right stuff at the right time for the right, you know, for all of your locations, but you’ve also got the ability to go in, sanity check it, look at things that they’re producing for their first quarter of evidence so that you can redirect them. Hey, you want to know what, this isn’t quite what we need. Now we really need you to go da, da, da. Now I’m fixing the mistakes in quarter one of my compliance run, not finding out about these mistakes at the end of quarter four of my, you know, of my compliance run, you know, type of a deal. So it is a, it is a huge step, a huge step forward, you know, for organizations to be able to, to be able to take advantage of the technology.
Partying shots and thoughts for the folks this week, Adam.
Well, you know, I’ve said it before, I’m sure to say it many, many times again, you know, we got into this space to help make compliance management suck less. And the bottom line is, when we generated the TCT portal, it was an act of generating the tooling that I wish that I had access to. So, the TCT portal, since its instantiation, has grown substantially in terms of its capability to help these organizations. I think that for a lot of the folks, especially that are in, you know, kind of the hospitality and retail industries, the act of compliance, it is so overwhelming that they find it hard to, you know, they find it hard to comprehend that there is technology that can actually make their compliance management suck less, you know, because it is such a huge burden, you know, that they’ve had to historically go through.So, you know, if nothing else, you know, the leveraging of the capabilities of the technology will make the core compliance team life better. It will make the participants, you know, that have to submit evidence as life better. It will keep you with a more consistent flow and timely flow of the, you know, the evidence and information that you need, you know, to be able to support your program. You’ll be able to do it with less people because, you know, when you’re using the technology to your benefit, you’ll be reducing operational costs across hundreds of, potentially hundreds of locations. You know, the other advantages for, you know, for the easy and streamlined system is, you know, the far more immediate effectiveness that your new folks can bring to the table. You know, even if you only have them for a short period of time, the training is, you know, training time is reduced. They have reference materials that they can go in and leverage, especially if you’re in higher repositories of evidence from last year. It doesn’t even matter, you know, if this is, if this is Angela that’s taking over for, you know, Fred, who, you know, was there last year, you know, type of a deal, at least she’s got the ability to go in and see exactly what he did. When did he do it? Which screenshot was it that they wanted to see, you know, end, end, end. So it makes their world a heck of a lot better and within the TCT portal, you know, we talked about the customized capabilities for guidance and things along those lines to just put things in real English terms for, based on the vernacular of your particular organization. You know, it just all the way around, it just makes things far smoother, you know, than, than they’ve been. And like I said, a lot of the folks that are in the, in that, you know, kind of retail and hospitality space, they just can’t envision that, that their world could actually, could actually improve, but trust me, it can.
You know, the, the more effective you can make your employees, that means reduced operational costs, fewer unpleasant surprises when you’re in the midst of the audit, you know, and really the way that I look at the security and compliance programs run properly is that, is that that is an active shield for the organization to be doing the right things when they’re supposed to be doing them in an appropriate and proper manner, that you have the capability to go invalidate, you know, validate and vet, and better yet, to have more near term capability to redirect the noobs that you’ve got on the team, you know, due to the high turnover, you’re able to get to them quicker, faster, you know, get them up to speed sooner, all the way around. And that is like the shield for your organization that really, you know, offsets or reduces, you know, the level of risk to the overall organization.
And that right there, that’s the good stuff. Well, that’s all the time we have for this episode of Compliance Unfiltered. I’m Todd Coshow and I’m Adam Goslin, hope we helped to get you fired up to make your compliance suck less.
