In spite of the clear need for a robust ethics & compliance team in today’s volatile business world, many companies still operate with understaffed compliance teams, either due to budget constraints, hiring delays or underestimating the function’s scope.
We regularly speak with businesses that only realise the true cost of a lean compliance team after issues have already surfaced. Here are the top five hidden (or, some may say, not-so-hidden) costs of under-resourcing your compliance function - and why hiring the right professionals at the right time is business critical.
1. Increased risk of regulatory breaches
The most immediate and obvious consequence of an overstretched compliance team is regulatory non-compliance. Whether it’s data privacy (GDPR), anti-bribery (UK Bribery Act), trade sanctions or ESG disclosures, an understaffed team is more likely to miss key deadlines, overlook red flags, fail to adequately monitor third parties and lack the time to train staff.
The result? Fines, sanctions, and reputational damage which often far exceed the cost of hiring the extra headcount you originally postponed.
2. Burnout and turnover in existing staff
When compliance professionals are juggling too many responsibilities, the pressure adds up fast. We’ve seen highly skilled officers leave organisations due to stress, lack of support, an inability to influence change or a perceived ‘undervaluing’ of their role by leadership.
The compliance talent market is competitive. If you don’t provide the right team structure and career support, you risk losing your best people, which only deepens the resource gap and creates a cycle of churn.
3. Missed opportunities for strategic input
Modern compliance teams do so much more than “tick boxes.” They shape ethical business practices, mitigate reputational risk and guide third party due diligence.
Understaffed teams often don’t have the time to contribute strategically, because they are too busy on the day-to-day and firefighting. This means your organisation could be missing out on valuable insights and early warning signs that could influence business decisions.
4. Reactive, not proactive, compliance culture
A well-resourced team can stay ahead of changing regulations, conduct proactive training and drive ethical behaviour across the business.
In contrast, a stretched team often becomes reactive; dealing with issues as they arise, rather than preventing them. This can lead to numerous problems, such as high error rates, weakened internal controls and increased vulnerability to fraud or misconduct.
Worst of all, it ultimately erodes employee trust in compliance as a proactive, enabling function.
5. Delays in business operations
Whether it’s onboarding new vendors, rolling out new products, or entering new markets, compliance delays can hold up operations. If your internal team can’t support the speed of business, you’ll either take shortcuts (and increase risk), or leave people waiting far too long for approvals. Either scenario can be costly to your business.
In short, you need to invest in compliance sooner, rather than later.
Compliance isn’t just a safeguard, it can give businesses a competitive edge. Hiring and retaining the right ethics & compliance professionals helps your organisation to stay ahead of regulatory change, build trust with stakeholders and operate both efficiently and ethically.
At Leonid, we help businesses build high-performing compliance teams. If you are looking to hire – or, indeed, are looking for your next compliance job opportunity, then please get in touch with Jamie Browne for a friendly chat.
