The True Cost of Compliance

The Ponemon Institute performed an independent study titled “The True Cost of Compliance” and showed that the cost of non-compliance (i.e. penalties and fines) are more expensive than the actual cost of being compliant. Given that they surveyed large organizations, the actual numbers used are huge so I will not cite them here since most of you will just stop reading.

What is applicable for all companies, however, is that when they adjusted the total cost of compliance by organizational headcount, compliance cost $222 per employee … whereas the cost for non-compliance came to $820 per employee.

The study also found that per capita non-compliance cost appears inversely related to the frequency of internal compliance audits. To paraphrase, the more internal audits you perform successfully, the lower your chances of failing a real compliance audit.

The cost of non-compliance goes beyond fees, penalties, and legal costs; it disrupts the normal business processes, reduces productivity and creates tremendous stress on the individuals involved (no true measure here).

If you need larger costs to scare you into compliance, consider this recent headline:

Playboy must pay $6 million in largest federal whistleblower verdict

Non-compliance is never sexy, not even for Playboy.