Why Compliance Officers Should Prioritize Benchmarking for Program Success

Compliance programs are constantly under pressure to keep up with changing regulations, increasing enforcement actions, and growing expectations from both regulators and business leadership. It’s no longer enough for a compliance program to simply exist—it must prove its effectiveness with measurable results.

In terms of long-range strategic priorities, a recent report suggests that staying on top of upcoming regulatory and legislative changes is the top priority for a majority of companies’ compliance teams (61%). This is closely followed by the challenge of identifying and mitigating emerging risks, as well as the ongoing need to drive growth and efficiency for greater profit margins.

This is where compliance benchmarking becomes essential. By comparing their programs against industry standards and best practices, compliance officers can identify gaps, strengthen policies, and ensure resources are allocated where they’re needed most. Without benchmarking, organizations risk falling behind, making them more vulnerable to regulatory scrutiny and operational inefficiencies.

This blog explores why benchmarking is a critical tool for compliance teams, the regulatory and business advantages it provides, and how organizations can integrate it into their compliance strategy for ongoing improvement.

What Is Compliance Benchmarking?

Compliance benchmarking is the process of evaluating a company’s compliance program by comparing it to industry standards, peer organizations, and regulatory expectations. It helps identify strengths, weaknesses, and areas for improvement based on real-world data. This can involve analyzing policies, risk controls, reporting mechanisms, and resource allocation to ensure they align with best practices. The goal is to create a more effective, well-informed, and resilient compliance function that evolves with emerging risks and regulatory changes.

Why Benchmarking Is a Game-Changer for Compliance Programs

A strong compliance program isn’t just about having policies in place—it’s about ensuring those policies are effective, up-to-date, and aligned with industry standards. That’s where benchmarking comes in. Without data-driven comparisons, compliance teams risk operating in a vacuum, making decisions based on assumptions rather than facts.

Compliance benchmarking provides organizations with a clear reality check. It allows them to measure how well a program is performing by comparing it to industry norms, peer organizations, and regulatory expectations. This process helps compliance officers understand whether their approach is truly effective or if critical gaps need to be addressed.

How Benchmarking Strengthens Compliance Programs

• Measures Program Maturity: This helps determine whether a compliance program is in its early stages, evolving, or fully developed compared to industry peers.
• Identifies Hidden Weaknesses: This tool Pinpoints gaps in risk management, policies, training, and reporting mechanisms that may otherwise go unnoticed.
• Supports Smarter Resource Allocation: This ensures that budgets and staff are focused on the right priorities rather than being spread too thin.
• Provides Data-Driven Proof of Effectiveness: This gives leadership and regulators measurable evidence that a compliance program is working, not just in theory but in practice.

The Risk of Skipping Benchmarking

Without benchmarking, compliance teams operate in the dark. Policies become outdated, risk areas go unchecked, and organizations may fall behind industry standards. Worse yet, when regulators ask, “How do you know your program is effective?” compliance leaders without benchmarking data may struggle to answer convincingly.

Benchmarking isn’t just a nice thing to have—it’s an essential tool for building a proactive, defensible, and constantly improving compliance program.

Regulators Don’t Just Want Policies—They Want Proof of Effectiveness

Regulators may not explicitly require benchmarking, but they expect compliance programs to be effective, adaptable, and continuously improving. A program that stays stagnant and fails to evolve with industry trends and emerging risks will not stand up to sscrutiny

The U.S. Department of Justice (DOJ), for example, has made it clear that compliance programs must be:

• Well-designed: Policies and procedures should be structured to prevent misconduct.
• Effectively implemented: Compliance programs must not only exist on paper but be actively enforced and followed.
• Working in practice: Companies must assess their program’s effectiveness using real data.

How Benchmarking Helps Meet Regulatory Expectations

• Keeping Up With Industry Standards – Regulators expect companies to maintain compliance programs that align with industry norms. If competitors are enhancing anti-bribery monitoring, investing in data privacy protections, or updating third-party risk controls, but your company isn’t, it raises red flags.
• Demonstrating Proactive Risk Management – Compliance programs should adapt to new threats, whether it’s AI-driven fraud, evolving sanctions regulations, or changes in whistleblower protections. Benchmarking helps companies spot these shifts early.
• Providing Data-Backed Justifications—When regulators ask, “How do you know your program is effective?” Vague answers won’t cut it. Compliance officers need benchmarking data to show how their policies, training, and enforcement measures compare to industry best practices.

The Cost of Ignoring Benchmarking

Failing to benchmark can leave compliance programs outdated, reactive, and exposed to unnecessary risks. A company that hasn’t compared its staffing levels, risk assessments, or policy enforcement efforts to peers may unknowingly be underprepared when regulators come knocking.

Example: If a benchmarking study shows that 80% of companies in your industry have implemented real-time monitoring for financial transactions, but your compliance team still relies on manual reviews, regulators may see this as a failure to take reasonable precautions.

Bottom line? Benchmarking isn’t just about keeping up—it’s about proving your compliance program is built to prevent misconduct, address risks, and measurably meet regulatory expectations.

Key Business Benefits of Compliance Benchmarking

Beyond regulatory compliance, benchmarking provides tangible business benefits that enhance the compliance function’s credibility, secure resources, and improve collaboration across the organization. Compliance teams often struggle to justify budgets, gain executive buy-in, and align with other risk functions. Benchmarking turns compliance from a cost center into a strategic asset by providing data-driven insights that support stronger decision-making.

Below is a breakdown of how benchmarking strengthens internal compliance functions:

Benefit	How Benchmarking Helps	Impact
Stronger Budget and Resource Arguments	Shows how compliance staffing, budgets, and tools compare to industry norms.	Helps secure funding and justify headcount increases.
Executive Buy-In & Business Alignment	Provides data-backed justifications for new policies or compliance initiatives.	Leadership is more likely to support changes when they see industry trends backing them.
Improved Coordination Across Risk Functions	Helps align compliance with legal, IT security, HR, and internal audit by identifying gaps.	Strengthens cross-functional collaboration and reduces risk silos.
Competitive Advantage	Benchmarking highlights where competitors are investing in compliance innovations, such as AI-driven monitoring or advanced training programs.	Ensures the company stays ahead of industry trends, reducing risk exposure.
Data-Driven Decision Making	Moves compliance from a reactive function to a proactive one by using real-world data to guide strategy.	Prevents inefficiencies, avoids unnecessary risks, and builds a compliance culture based on facts rather than assumptions.

Without benchmarking, compliance teams rely on guesswork when making critical decisions. With it, they can advocate for better resources, align compliance efforts with business goals, and strengthen overall risk management.

7 Critical Areas Where Benchmarking Enhances Compliance Effectiveness

Benchmarking isn’t just about comparing numbers—it’s about strengthening, proactively enhancing, and effectively implementing compliance programs. By using benchmarking data, compliance officers can uncover gaps, optimize resources, and ensure their programs align with industry best practices.

Here are seven key areas where benchmarking provides critical insights and drives meaningful improvements:

1. Identifying & Addressing Emerging Compliance Risks

Regulations and compliance expectations are constantly evolving, making it essential for organizations to stay ahead of industry trends rather than reacting after the fact. Companies that fail to track compliance shifts risk regulatory scrutiny, enforcement actions, and reputational damage.

Benchmarking provides a structured approach to evaluating compliance program effectiveness. It ensures that policies, procedures, and controls align with industry best practices. It also helps organizations compare their compliance frameworks with those of peer companies, ensuring they are not falling behind in critical areas such as anti-bribery measures, ESG reporting, and third-party due diligence.

How Benchmarking Strengthens Compliance Programs:

• Detects gaps in compliance policies and procedures, ensuring alignment with evolving regulatory expectations.
• Identifies industry-wide trends, such as increased enforcement actions in specific risk areas, helping companies make proactive adjustments.
• Evaluate whether compliance training, monitoring, and reporting mechanisms meet current industry standards.

Example: If benchmarking reveals a rise in enforcement actions related to third-party compliance failures, organizations can reinforce their vendor screening processes, due diligence protocols, and internal audit strategies to mitigate risk.

Read: The Essential Guide to Online Ethics and Compliance Training

A well-documented compliance program should include clear policies, standardized procedures, and structured templates that enable consistency and efficiency. Access to pre-built compliance policies, procedures, and risk assessment templates can help organizations implement best practices with ease. 

2. Improving Hotline & Reporting Mechanisms

A compliance program is only as strong as its ability to detect, report, and address misconduct effectively. Employees must feel safe and confident when raising concerns—otherwise, key issues may remain hidden, increasing regulatory and reputational risks. Benchmarking allows organizations to assess the effectiveness of their whistleblowing and reporting mechanisms, ensuring that concerns are addressed in a timely and appropriate manner.

How Benchmarking Helps:

• This chart compares hotline usage rates against industry averages—. Low usage may indicate fear of retaliation, lack of awareness, or ineffective reporting channels.
• Evaluate whether organizations with multiple reporting options (e.g., anonymous hotlines, mobile apps, direct reporting) see higher engagement.
• Benchmarks case resolution time to ensure internal investigations are handled efficiently and without unnecessary delays.

Example: If benchmarking reveals that leading companies resolve compliance investigations 30% faster, it may highlight delays in internal processes, poor case management, or a lack of dedicated resources in a compliance program.

Read: Regulatory Risk and Compliance Management Software Solutions

Best Practices to Strengthen Whistleblower & Reporting Systems

1. Ensure Confidentiality – Employees should be assured that their identities and reports will be handled with discretion.
2. Promote Awareness & Accessibility – Regularly communicate about available reporting mechanisms and provide easy-to-use reporting channels.
3. Provide Multiple Reporting Options—Provide employees with various ways to report concerns, including phone hotlines, email, mobile apps, and in-person reporting.
4. Ensure Swift & Fair Investigations – Address reports in a timely, transparent, and unbiased manner to build trust in the process.

The Need for Anonymous Hotline Services

An effective compliance program requires confidential, anonymous reporting options to ensure that employees feel comfortable raising concerns without fear of retaliation. Many compliance violations, particularly those involving fraud, harassment, or unethical business practices, go unreported when employees worry about repercussions. Organizations that implement secure and anonymous hotlines see higher reporting rates and stronger compliance engagement.

Understanding Whistleblower Protections & Regulations

Laws such as the Whistleblower Protection Act and global equivalents protect employees who report wrongdoing from retaliation. Companies that fail to provide safe and accessible whistleblowing channels risk regulatory penalties, lawsuits, and reputational damage. Ensuring compliance with these regulations not only minimizes legal risks but also fosters a culture of transparency and accountability within the organization.

Organizations should have clear policies outlining the reporting process, protections against retaliation, and investigation procedures to establish a strong whistleblower protection framework. Click here to download your free whistleblowing policy template. This will ensure that your reporting systems align with industry best practices and legal requirements.

Read: Understanding Whistleblowing in Business Organizations

3. Ensuring Proper Compliance Staffing & Compensation

An understaffed or under-resourced compliance team increases the risk of gaps in oversight, delayed investigations, and regulatory failures. Many organizations struggle to justify additional compliance hires or competitive salaries, making it harder to attract and retain skilled professionals. Benchmarking provides data-driven insights to assess whether compliance teams are adequately staffed and compensated relative to industry peers.

How Benchmarking Helps:

• It determines whether compliance teams are right-sized by comparing their staffing levels to those of companies of similar size, industry, and risk exposure.
• Identifies emerging specialized roles, such as ESG compliance officers and data privacy specialists, that competitors are investing in.
• Ensures salary and benefits are competitive, reducing turnover and helping retain experienced compliance professionals.

Example: If benchmarking data shows that organizations of similar scale have twice the number of compliance professionals, it signals that a company may be operating with insufficient resources, increasing exposure to regulatory and operational risks.

A well-resourced compliance function is not a cost center—it is a critical safeguard against legal, financial, and reputational risks. Organizations should regularly assess their staffing models, role structures, and compensation packages to ensure they remain aligned with industry standards.

4. Measuring the Effectiveness of Compliance Training

Compliance training is only valuable if employees absorb and apply it. If training completion rates are high but misconduct incidents persist, something is wrong.

How Benchmarking Helps:

• Compares training completion rates against industry standards.
• Assesses whether e-learning, workshops, or real-world case studies lead to better compliance outcomes.
• Identifies common knowledge gaps across the industry, helping companies refine training content.

For example, if companies using scenario-based training see fewer compliance breaches than those relying on generic e-learning, this is a signal that training methods should be updated.

Read: The Essential Guide to Online Ethics and Compliance Training

5. Strengthening Third-Party Risk Management

Third parties—including vendors, suppliers, distributors, and contractors—introduce compliance risks such as bribery, fraud, and data privacy violations. Without structured oversight, companies can face severe regulatory penalties for third-party misconduct.

Benchmarking provides compliance teams with a comparative view of how leading companies manage third-party risks, ensuring they are not operating with outdated or insufficient due diligence measures.

How Benchmarking Helps:

• Enhancing Due Diligence Programs – Benchmarking reveals how industry peers vet third parties, conduct risk assessments, and apply compliance screening.
• Assessing Audit Frequency & Depth: Leading companies conduct regular risk-based audits of their vendors. Benchmarking helps organizations determine whether their audit intervals and review mechanisms are in line with industry norms.
• Optimizing Compliance Monitoring—While many organizations only conduct checks during onboarding, benchmarking highlights the best practices for continuous third-party monitoring.

Example: If industry leaders perform annual risk-based third-party audits while another company only reviews vendors every three years, this discrepancy could expose the organization to regulatory scrutiny.

A risk-based approach to third-party compliance management ensures that high-risk vendors receive more frequent reviews while lower-risk partners undergo proportionate oversight. Companies that benchmark their processes against industry norms can refine their due diligence frameworks without overburdening compliance resources.

6. Tracking Compliance Budget & Resource Allocation

Even the most well-designed compliance programs cannot function effectively without sufficient funding. Many compliance teams struggle to justify budget increases without clear data proving their resource needs. Benchmarking allows companies to compare spending levels with peer organizations, ensuring compliance investments are aligned with industry standards and risk exposure.

How Benchmarking Helps:

• Determining Compliance Investment Levels – Benchmarking provides insights into how much similar-sized companies allocate to compliance as a percentage of revenue.
• Optimizing Budget Allocation – Industry comparisons reveal where funds are being spent, such as compliance technology, staffing, third-party oversight, and audits.
• Justifying Technology Investments – Benchmarking highlights whether peer organizations invest in AI-driven compliance monitoring, automated case management, or advanced training platforms.

Example: If top-performing companies dedicate 15% of their compliance budgets to technology investments, but a company allocates only 5%, this signals a gap in digital compliance capabilities. Investing in automation and real-time risk monitoring can significantly improve efficiency and reduce regulatory risks.

A data-backed approach to compliance budgeting ensures that companies don’t underfund key areas, such as employee training, whistleblower programs, and third-party due diligence, which can expose organizations to enforcement actions.

Read: 11 Elements of an Effective Compliance Program

7. Evaluating Compliance Culture & Employee Engagement

A company’s compliance culture directly impacts its ability to detect and prevent misconduct. If employees do not trust the compliance program, believe unethical behavior will be ignored, or fear retaliation, even the strongest policies will fail in practice.

Benchmarking helps organizations measure employee engagement with compliance initiatives and whether their internal culture supports transparency, ethical behavior, and proactive risk reporting.

How Benchmarking Helps:

• Measuring Employee Participation in Compliance Programs – Industry comparisons provide insights into training completion rates, ethics survey engagement, and whistleblower reporting trends.
• Identifying Best Practices for Compliance Awareness – Benchmarking highlights how top-performing companies promote compliance engagement through leadership messaging, training formats, and internal reporting structures.
• Evaluating the Impact of Recognition & Incentives – Some companies link compliance behavior to performance evaluations and employee rewards. Benchmarking reveals whether such incentives drive better compliance adherence.

Example: If organizations with strong compliance cultures experience 40% fewer internal violations, it reinforces the importance of investing in compliance awareness and engagement initiatives.

A well-established compliance culture encourages employees to raise concerns early, seek guidance on ethical dilemmas, and participate proactively in compliance activities. Benchmarking allows companies to evaluate their culture against industry leaders and adjust their engagement strategies accordingly.

Compliance benchmarking is not just a performance measurement tool—it is a strategic necessity that strengthens a company’s ability to prevent misconduct, detect risks, and align with regulatory expectations.

Without benchmarking, compliance programs operate in isolation, making decisions based on internal assumptions rather than real-world industry insights. Organizations that integrate benchmarking into their compliance strategy gain critical advantages, including:

• Stronger third-party risk management, ensuring due diligence and monitoring meet industry standards.
• Optimized budget allocation, ensuring compliance teams have adequate resources.
• A well-established compliance culture reinforcing ethical behavior and proactive reporting.

Companies that apply benchmarking aren’t just reacting to regulatory changes—they are staying ahead of them.

How to Approach and Implement Compliance Benchmarking

Implementing compliance benchmarking can feel daunting, but breaking it down into manageable steps makes the process both effective and actionable. Here’s how to approach compliance benchmarking:

Step 1: Define Clear Objectives

Before diving into benchmarking, it’s crucial to define your objectives. What do you want to achieve by benchmarking your compliance program? Common objectives might include:

• Improving policies and procedures
• Evaluating resource allocation
• Ensuring regulatory alignment
• Enhancing risk management

Benchmarking without clear goals can result in gathering irrelevant data that doesn’t contribute to the effectiveness of your compliance program.

Step 2: Identify Key Metrics and Areas for Comparison

Once you know your goals, the next step is to identify what you’ll measure and compare. Some key metrics that compliance officers might benchmark include:

• Compliance staffing levels and compensation
• Training effectiveness
• Risk management policies
• Third-party oversight mechanisms
• Hotline and reporting systems

Think about areas where your program might have gaps or inefficiencies, and focus on benchmarking those first.

Step 3: Select the Right Benchmarks

Choosing the right benchmarks is critical for ensuring the effectiveness of your benchmarking process. Organizations approach benchmarking in several ways:

• Benchmarking as Part of a Program Assessment: Some organizations integrate benchmarking into a broader program assessment, often with the help of external consultants. This approach provides an in-depth evaluation of the compliance program but can be costly and time-consuming.
• Element- or Industry-Specific Benchmarking: This method involves focusing on specific compliance elements or using industry-specific benchmarking data. It’s a valuable tool for making targeted improvements but doesn’t always provide a holistic view of the entire compliance program.
• Benchmarking Against Guidance Updates or Organizational Changes: Often reactive, this approach responds to internal or external changes, such as new regulations or shifts in business operations. It offers periodic, “point-in-time” snapshots of the program’s state.

Step 4: Collect Data

Data collection is a critical aspect of benchmarking. Depending on your chosen approach, you can gather data in a number of ways:

• Surveys: Send out surveys to industry peers or conduct internal surveys to assess how employees view compliance efforts and whether there are areas for improvement.
• External Research: Review published compliance reports, case studies, and regulatory guidelines to get a sense of how other organizations are tackling compliance challenges.
• Internal Audits: Conduct internal audits to gather baseline data on the effectiveness of your compliance policies, processes, and risk controls.

Step 5: Analyze and Compare

After gathering the necessary data, it’s time to analyze it. The goal is to compare your compliance program against the data collected and assess:

• Performance Gaps: Are there areas where your program is underperforming compared to industry standards or best practices?
• Best Practices: What are the leading practices employed by high-performing organizations? Are there practices you can adopt to improve your program?
• Areas for Improvement: Identify specific areas where your program can be enhanced, whether it’s policy updates, risk management improvements, or better resource allocation.

This analysis will provide a clearer picture of where your compliance program stands in relation to industry standards and help guide your next steps.

Step 6: Take Action

Benchmarking is only effective if it leads to meaningful change. Use the insights gathered from the analysis to:

• Revise policies and procedures to align with industry best practices
• Reallocate resources to focus on areas that need improvement
• Update training programs to address knowledge gaps or new regulatory requirements
• Introduce new tools, technologies, or processes to improve compliance monitoring and risk management

Selecting the Right Compliance Benchmark

To ensure your benchmarking process is effective, it is best practice to benchmark across multiple criteria that reflect different aspects of your organization’s compliance program:

• Industry Benchmarks: Compare your compliance practices against organizations that operate in the same industry and face similar regulatory expectations.
• Headcount Benchmarks: Organizations of different sizes will have varying resource levels. Benchmarking against similarly sized companies helps provide more relevant comparisons.
• Annual Revenue Benchmarks: Companies of similar revenue levels often face comparable risks. Use these benchmarks to prioritize compliance activities and allocate resources accordingly.
• Best-in-Class Programs: Benchmarking against companies recognized for their excellence in ethics and compliance can help you gauge how your program measures up to industry leaders.

Ensure your benchmark is multifaceted and delves into the specifics of your program’s interactions with key compliance areas, such as:

• Ethics and Compliance Program Elements: Structure, staffing, codes, and policies.
• Training and Communications: Effectiveness and employee engagement.
• Risk Assessment and Audits: How risks are identified and managed.
• Third-Party Management: Due diligence and oversight mechanisms.
• Governance and Board Involvement: How leadership supports compliance.

A well-designed benchmark provides clear insights, supporting continuous improvement and the strengthening of your compliance program.

Best Practices for Making Compliance Benchmarking Work

Benchmarking is only useful if it leads to real improvements. To get the most value, compliance teams need to go beyond just collecting data and use it strategically. Here are seven practical ways to make benchmarking a powerful tool for your compliance program.

1. Know what you are measuring and why. Do not benchmark for the sake of benchmarking. Rather, identify the key compliance areas where benchmarking can highlight gaps, improve processes, or justify resource allocation.
2. Compare with the right peers. Make sure you are looking at companies that match your industry, size, and risk exposure. Comparing with organizations that face different compliance challenges will not give you actionable insights.
3. Use reliable and up-to-date data. Compliance risks and regulations change quickly. Rely on trusted sources like regulatory bodies, industry groups, and peer surveys and update your benchmarks regularly.
4. Look beyond the numbers. Data alone will not tell the full story. If a competitor has lower compliance incident rates, ask why. Is it because they have better controls or because employees fear reporting issues?
5. Turn insights into action. Benchmarking is useless if nothing changes. Use findings to adjust policies, improve training, and fine-tune risk management strategies.
6. Make benchmarking a habit. Compliance is not static, so benchmarking should not be, either. Track your progress regularly against industry standards and adjust as needed.
7. Align benchmarking with business goals. A strong compliance program is not just about avoiding fines. It supports corporate governance, ethical leadership, and long-term business success. Make sure your benchmarking strategy reflects that bigger picture.

Done right. Benchmarking is more than a report. It is a roadmap for making compliance smarter, stronger, and more aligned with business needs.

Read: What Is Anti-Bribery and Corruption Compliance?

Wrapping Up

Compliance is about proving that policies work, risks are well-managed, and resources are being used effectively. Without benchmarking, compliance teams risk operating in isolation, making decisions based on gut feeling rather than real-world data.

By benchmarking against industry standards and peer organizations, companies gain clear insights into what is working, what is falling short, and where improvements are needed. Whether it is strengthening third-party due diligence, justifying compliance budgets, or refining whistleblower programs, having data-driven insights makes compliance efforts more effective and defensible.

The best compliance teams do not just react to regulatory pressures—they stay ahead of them. Benchmarking gives compliance officers the evidence they need to secure leadership buy-in, refine compliance processes, and build a truly resilient program.

Looking for an easy way to assess, track, and improve your compliance program? Try VComply’s 21-day free trial and see how a centralized compliance management platform can help you implement best practices, automate compliance tracking, and stay ahead of regulatory risks.

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