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Compliance Professionals Mostly Upbeat on Budgets, Staffing for 2011

Melissa Klein Aguilar | March 2, 2011

Finally some good news: Compliance and ethics professionals are feeling more optimistic about their resources and job security in 2011, according to data gathered by the Society of Corporate Compliance and Ethics and the Health Care Compliance Association.

2010 was a better year for compliance budgets, staffing, and job security, and those trends are expected to hold for 2011, according to survey of more than 400 compliance and ethics professionals by the HCCA and SCCE.

Compliance budgets leaned toward the positive, with more compliance professionals reporting a budget increase than a decrease for the second year in a row in 2010. Almost a third (32 percent) reported an increase in spending last year, compared to just 14 percent who reported a decrease, according to the "The Economy, Compliance and Ethics: 2011 Report" (available for download here). That compares to just 26 percent who reported an increase in 2009, and to 27 percent who reported a decline in spending in 2009. That leaves most respondents (54 percent) somewhere in between, reporting no change in their budget amid increased regulation in 2010. Looking to 2011, 46 percent of compliance and ethics professionals expect their budgets to increase in 2011, while just 12 percent expect a decline in spending.

The staffing outlook is also positive. Nearly a third (31 percent) reported an increase in compliance and ethics team staffing over 2009, compared with the 18 percent who had expected an increase in 2010. Just 10 percent saw a decrease last year. Increased budgets are expected to bring increased staffing in 2011. More than a quarter of the group expects an increase in staffing this year, up from 18 percent a year ago. Only 8 percent expect staffing to decline in 2011, compared to 13 percent last year.

The rising budgets are accompanied by increased feelings of personal job security. More than half of compliance and ethics professionals responding (54 percent) say they're “not at all” concerned about losing their job as a result of the economy, up from 44 percent in 2009 and 2008.

Although the increased compliance budgets and staff and greater sense of job security are good news, budget and staff growth must equal the demand for regulatory compliance and business ethics, says Roy Snell, SCCE/HCCA chief executive officer. With a number of new regulatory initiatives, including the Dodd-Frank Act, healthcare reform, and the United Kingdom's Bribery Act putting pressure on compliance efforts, he says regulators may take a dim view of companies that experience a compliance failure after not increasing their compliance resources.

The survey findings show that the picture isn't all rosy. Although they're more upbeat about their job security, compliance and ethics professional are still worried about the impact of the economy. The vast majority of the group (90 percent) feel that the economy somewhat or greatly increases the risk of a compliance and ethics failure, unchanged from last year.

When it comes to management's perception of compliance, a majority (58 percent) say senior management in their organization views compliance as a “somewhat positive” or “very positive” asset in helping the organization through the current economic conditions, up from 51 percent at the end of 2009 and 49 percent at the end of 2008. Apparently though, there's room for improvement. Another 29 percent say management views compliance as neither a positive nor a hindrance, and 13 percent believe that their management sees compliance and ethics as a detriment to the business.