How costs can be saved when implementing internal hotlines

What are the costs for implementing an internal reporting office in a company?
The legislative justification for the HinSchG assumes implementation costs of at least 12,500 euros for a company size of 50 – 249 employees. For companies with more than 250 employees, the legislator estimates about 15,000 euros per reporting office.
The legislator gives employers leeway in fulfilling the demands of the HinSchG. Thus, he leaves it up to companies to decide which people or organizational units are best suited to fulfill the task. Companies that already have a compliance system can continue to use it, provided it meets the requirements of the HinSchG. If companies do not yet have a system, the effort to set up a whistleblowing office is considerable, as this depends on capacities and the specific design of the whistleblowing office.
Costs may arise solely for legal advice and support in designing a whistleblowing system, creating the necessary guidelines and processes, supporting implementation and communication, ensuring data protection-compliant design, and training the reporting office’s employees.

What are the annual costs of operating an internal reporting office in companies?
The legislator estimates the annual costs of operating the reporting office at 5,772 euros per year. This is an average value assumed by the legislator – often, the costs are even significantly higher.

What are the costs of implementation in public administrations?
The cost volume for the implementation of the internal reporting office for administrations amounts to 71.3 million euros. Of this, only 13.6 million euros are attributable to the federal government.

What are the annual costs of the internal reporting office in authorities?
According to the legislative justification for the HinSchG, the annual costs for the administration amount to 219.2 million euros. Of this, the federal government contributes only 6.4 million euros annually.

What tasks must be performed in the internal reporting office?
The main tasks of the internal reporting offices include:

The establishment of the reporting office
Operation of the reporting channels. This includes checking (several times) daily whether new reports have been received.
Examining incoming reports for their validity. Here, confidentiality must be ensured in particular.

Overall, it can be stated that setting up and operating internal reporting offices leads to high costs for companies and administrations.

How can the costs of the internal reporting office be reduced?
Modern technologies help to reduce the costs for the internal reporting office. This involves using existing software infrastructure that enables efficient work.

For many companies and authorities, complete outsourcing of the internal reporting office to external service providers is even more efficient, as they provide not only the infrastructure but also the personnel, which is why companies and authorities do not have to keep human resources available for this purpose. An example of this is the eagle reporting office service. They also enable anonymous and secure reporting, tracking of incidents, secure communication with reporting persons and compliance with deadlines.

Why should the costs for training and further education not be underestimated?
Investments in training programs for employees can help raise awareness of the value and importance of internal reporting offices. As the topic is complex, at least two working days per year should be planned for this.

Can companies join together and operate a joint reporting office?
Yes. Several private employers, usually with 50 to 249 employees, can also set up and operate a joint office for receiving reports and for the further measures under this law (see § 14 para. 2 HinSchG). Here too, outsourcing to a third party is advisable to avoid, in particular, the disclosure of trade secrets to competing companies, insofar as these are necessarily revealed by the reporting of a violation. According to the principle of separation under company law, it is also possible to set up an independent and confidential office as a “third party” at another group company (e.g. parent or subsidiary company) that can also work for several independent companies in the group.

The implementation of internal reporting offices initially requires a certain investment, but the long-term benefits, such as uncovering misconduct and preventing damage, lead to significant savings for companies and administrations.

You have not yet implemented an internal reporting office service? Then we should talk!

As of: 06.06.2023