Key takeaways
- The manufacturing workforce has become increasingly distributed, creating a distinct challenge for traditionally centralized compliance programs.
- Modern compliance practices and systems can help “get the compliance program into the field” for manufacturing’s distributed workforce.
- Organizations – manufacturing or otherwise – can reduce risk and realize other substantial business value by developing a culture where individuals feel they can raise concerns internally and have the tools to do so.
The manufacturing workforce has changed
For the purpose of broader organizational compliance, it may not be fair to describe a manufacturer as having a single “workforce.” Manufacturing has become highly specialized, evolving into wider networks of sites contributing their own expertise toward the creation of a final product. Locations are often spread out across jurisdictions, including across international borders. Even small firms have joined this trend, commonly sourcing components and raw materials from complex third-party supply chains.
These vast webs make for workforces that may have strong alignment with their local leadership and worksite, but less with the organization as a whole. Greater displacement from the home office, its time zone, its primary language, and differences in cultural norms and expectations can lead to local fiefdoms, point solutions and a way of doing business locally that feel disconnected from the
Why traditional compliance programs struggle to scale in manufacturing
The reality of today’s manufacturing workforce creates distinct challenges for the scaling of an effective compliance program. While a more centralized approach may work in other industries, in manufacturing, the training, messaging and systems that enable compliance must also be effective for an often spread-out, varied and siloed headcount.
For example, workers in far-flung production sites may not benefit from the same messaging from leadership as those in a home office. Leadership may serve as genuine champions of the compliance program, but if that positive reinforcement is not echoed through first-line managers in various locales, workers may not feel as confident to speak up about concerns.
Risk and compliance leaders in manufacturing appear to be signalling awareness of this tension – while 70% said senior leaders encouraged compliance and ethics in the organization, that number fell to 57% for first-line managers, according to data from the survey behind NAVEX’s State of Risk & Compliance Report.
Manufacturers also face the challenge of deploying the systems that support their compliance program in a cohesive way across different work sites. These include intake channels for reporting misconduct – by phone, web, in-person or other means – to best serve different workforce dynamics and preferences. These firms may also struggle to provide workers with easy access to policies that clearly explain when a concern should be reported.
The fallout of these challenges is seen in rates of internal reporting for manufacturing, a real-time signal of risk within the organization whose adoption serves as a barometer of employee access and trust. Manufacturing organizations had 1.10 Reports per 100 Employees in 2025, compared to 1.65 for industries as a whole, according to a recent analysis of NAVEX customer internal reporting data.
The visibility gap between leadership and the front line
This lack of connected systems and practices creates a visibility gap between leadership and the front line. If workers do not feel comfortable speaking up about concerns in a certain location, the associated risks often remain unknown until they become a critical problem. Or, if data about reported misconduct is handled at the local level and not routinely captured and accessible through a connected system, risk and compliance managers may never see where “hot spots” exist throughout the organization’s operations.
This awareness also extends to third-party suppliers. Individuals known to be non-employees are accountable for about 10% of median reports made to organizations, according to NAVEX benchmark report data. Those sources range widely, but some may be from workers in the supply chain who, for whatever reason, chose to elevate a concern downstream of their own organization. In an era when these suppliers are often critical for manufacturers, that reporting – and visibility into it – sheds light on another potential blind spot.
Currently, about half of manufacturing boards of directors are said to receive regular updates or dashboards on compliance performance, according to NAVEX survey data. Forty-two percent of manufacturer respondents said their organization provides third-party access to report through their speak-up program.
Compliance accessibility as a competitive advantage
It appears reporters are eager to speak up, which provides valuable real-time risk intelligence to organizations. Are manufacturers ready to promote that reporting, and to realize the benefits of a speak-up culture?
Manufacturers lagging in global reporting volume stand to benefit from increasing those numbers. Quite simply, research shows greater levels of reporting are associated with better business outcomes.
Manufacturers are more likely to avoid regulatory and legal fines through the risk intelligence gleaned from healthy reporting rates, but some benefits are less tangible. Greater levels of reporting suggest stronger trust that the manufacturer will “do the right thing” when made aware of a concern, meaning stronger employee engagement and retention and a positive brand reputation that may tip the scales toward more business opportunities.
How can manufacturers improve compliance accessibility? NAVEX data shows reporters use a variety of channels to make a report. Some channels may be particularly important due to the dynamics at a particular site, but all intake methods should be advertised and available. A similar approach should be taken with access to policies that support reporting, be they available through a web portal, physical documents or direct inquiry to the internal reporting system itself.
3 steps to build a stronger workforce culture
Regardless of a manufacturer’s size or the nature of its operations, there are concrete steps organizations can take to build a stronger culture of ethics and compliance within their workforce.
Tone from the top matters: NAVEX survey data shows leadership support of compliance matters. Where leadership was said to tolerate greater compliance risks, respondents were more likely to say their organization had experienced negative compliance issues.
For manufacturing organizations with far-flung operations, any efforts that can broadcast leadership’s championing of compliance and ensure that mindset is embodied by managers who interface daily with different employees makes a positive impact.
Reinforce anti-retaliation policies and encourage reporting as a “good thing”: About half of manufacturing risk and compliance leaders surveyed told NAVEX a fear of negative career consequences was a barrier for speaking up. Retaliation – real or feared – is the arch nemesis of a speak-up culture.
- Ensure workers know they can raise concerns, whether anonymously or named, and that retaliation is not tolerated.
- Ensure workers know they can raise concerns, whether anonymously or named, and that retaliation is not tolerated.
Make reporting and policies accessible: It is important to reach reporters where they are. Ensure multiple channels exist for reporting, making it as easy as possible for individuals to raise a concern in the manner best suited to their situation and preferences.
Make sure all sources are tracked, providing better visibility into risk and trends across manufacturing sites, and potentially across suppliers. The same holds true for policies – ensure policies are easily accessible and, where possible, use trends in access to those policies as another signal for the program.
Put compliance in the hands of a workforce that embraces it
Modern manufacturers need to put the tools of compliance into the hands of the workforce – wherever they are.
Discover how a unified risk and compliance approach can help your organization strengthen oversight, reduce risk, and build more resilient operations across every facility, supplier and geography.
