Budgeting Factors For Developing Corporate Compliance Training

Budgeting Factors For Developing Corporate Compliance Training
Summary: Corporate compliance is important – but how much needs to be spent to create an effective training program? Determining budget is an important first step and must be done with the right factors in mind to fit the organization, industry, and risk that employees may face.

Corporate Compliance: Building A Budget

They say money makes the world go round. Whether you believe that in general terms or not, there’s no doubt that the business world depends on budget and that investments can make or break a business strategy. While this can apply to any kind of training, corporate compliance training is especially important to a business’s liability. In some cases, corporate compliance is absolutely essential for a business to avoid consequences such as lawsuits or large government fines.

In some industries, there is much stricter regulation than others, and neglecting to provide corporate compliance training is simply not an option. While in others may have a little more wiggle room, the transparency demanded by modern consumer values means it’s more and more important to consider compliance in any organization.

That brings us to budget. When it comes to corporate compliance training, how much can an organization afford to invest? An even better question, in light of the number of compliance scandals we hear about in the news, might turn that statement on its head. How much can an organization afford not to invest?

Of course, budget doesn’t appear out of thin air. Reallocating a huge percentage of budget to compliance isn’t necessarily a great investment, especially if it detracts from other functions within the organization. However, by understanding which factors must be taken into account, it’s possible to define a corporate compliance training budget that balances the organization’s needs with both efficiency and effectiveness.

Let’s begin by talking about budget factors in general. Some of the main factors [1] that should go into any corporate training budget include the following:

  • Company revenue
  • Number of employees
  • Business complexity
  • Inherent risk exposure
  • Time required
  • Cost of tools and resources
  • Cost of training

Corporate compliance training takes each of these factors into account, but there are other areas of focus that can further optimize the budgeting strategy. We’ll take a closer look at a few of them now.

Targeting The Need

What specific change in attitude or behavior needs to happen for employees to meet compliance standards? This question may seem like an obvious one to ask, but that doesn’t make it any less important. The whole purpose of corporate compliance training is to equip employees to act ethically, safely, and in line with company standards and government regulations. Too broad of a scope, and learners may not be able to pick out what is most important.

The budget for a corporate compliance training program should be informed by the need being addressed. If a substantial – or exceptionally important – change must be made, the budget will need to reflect that. However, by trimming content down and reducing unnecessary areas of the training, not only is the final result more likely to be engaging [2] (and therefore a better investment), but each budget dollar can be used as efficiently as possible.

Understanding Risk

We mentioned risk exposure in the list earlier in the article, but since compliance training is centered around mitigating risk, there’s more to consider. Each organization has its own unique risks to take into account when developing corporate compliance training. Furthermore, within the company, different groups of employees may be exposed to different kinds of risk and in different amounts. Not only does the corporate compliance training program itself need to be developed with these risks in mind, it must also successfully pass on the “why” behind company policy to employees. That’s a lot of variables.

A comprehensive assessment of potential risk is crucial to consider when formulating a corporate compliance training budget. Under-funding training for employees who are exposed [3] to high amounts of risk should be avoided. With the right research completed, dollars can be reallocated as needed to ensure that each level of risk exposure is adequately covered.

Creating a solid budget for an area as complicated as compliance training can be difficult, but collecting the necessary information to determine organizational priorities is a great first step. Weighing the cost-to-benefit ratio for each need that has been identified, along with demographic and industry factors, helps create a structure for the overall budget. It may also be important to allow for some degree of flexibility to account for future change, both in the organization itself and in the business world.


  1. Creating a Successful Compliance Program: Budgets, Buy-in & Building a Team
  2. Creating Engaging Compliance Training: Lessons From the Entertainment Industry
  3. Risk-ranking and compliance training
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