Whistleblower hotline return on investment discussion often focuses on the dramatic reduction in fraud costs.  In the 2010 Association of Certified Fraud Examiner Report, hotlines are the most impactful control in reducing the average fraud size.  Organizations that had a hotline in place experienced a 60% reduction in the average fraud loss in comparison to companies that did not!

Because these fraud cost reductions are so dramatic, the financial impact of human resource employee hotline issues is sometimes overlooked; but, this is hasty.  When the US Equal Employment Opportunity Commission (EEOC) published its 2010 statistics, it showed that private workplace discrimination charge filings were at a record high of almost 100,000.  This is an increase of 20-25% relative to the 1997 – 2007 timeframe.  Filings have been steadily on the rise since the current recession began.  As employees are laid off and it takes longer to find a job, they have more time to think about why they were laid off and to possibly file discrimination charges.

In the past week, Bank of America announced that they are planning to lay off 30,000 employees.  In a related Reuters news release on September 14, 2011, Bank of America has been ordered by the Department of Labor to reinstate and pay a fired Countrywide whistleblower employee $930,000 who charged he/she was fired as a retaliation measure.

In these times of significant lay-offs and increasing discrimination charges, it’s extremely important that organizations have established hotlines that address human relations concerns, not just fraud and financial concerns.  Providing an established whistleblower hotline and investigation process during these difficult economic times can reduce the cost of judgments and legal fees such as those highlighted by the increasing EEOC reports and the Bank of America judgment.