In today’s complex regulatory landscape, organizations face a daily battle to ensure their policies, procedures, and workforce training comply with evolving legislative requirements.

An oversight in regulatory compliance can prove disastrous, with costly financial implications and reputational risk. It is at these moments that a compliance gap analysis emerges as a vital tool to business integrity and compliance.

But what exactly is a compliance gap analysis, and how are top industry training providers offering it to businesses at no cost?

In this comprehensive guide, we will explore exactly how a gap analysis works, its benefits to business, and how using top providers’ free gap analysis tools can revolutionize business compliance.

Understanding Compliance Gap Analysis

A “compliance gap analysis” is a strategic evaluation that compares the organization’s current policies and procedures against the specific requirements of the applicable regulations or frameworks.

As the experts at Secure Frame explain, this process can allow the organization to “understand precisely where its compliance position stands today, where it has gaps, and what needs to be done to close the gaps.”

A gap analysis is different from other types of risk assessment because the latter focuses more generally on the identification of possible risks and threats, while the former focuses more specifically on the gaps between the organization’s current compliance and the desired level of compliance as required by the regulations or frameworks that have been established, such as OSHA regulations or HIPAA regulations.

The Core Objectives of Gap Analysis

The overriding purpose of a compliance gap analysis is to develop a precise, practical plan to address the problems. This evaluation at a higher level makes it possible for organizations to:

• Bring weak spots to light: Detection of lack of control measures, heritage policy versus new directive, or lack of supporting documents, all these are warnings that can be acted upon to avoid compliance violations. 
• Sort out fixes: Assigning priorities to issue fixing based on possible consequences to achieve the best use of limited resources. 
• Upgrade security profile: Strengthen security arrangements and operational processes to minimize the risk of data breaches and regulatory failures. 
• Stave off penalties: Taking steps in advance to remove weakness so as to avert very costly legal ramifications and regulatory fines.

When you identify and address these flaws step by step, you not only reinforce your governance frameworks at a high level but also stave off potential compliance failures.

The Methodical Process of Gap Analysis

A methodical, structured approach is required to conduct a thorough compliance gap analysis. Although the actual details will depend on the sector or the regulatory guidelines, the overall process tends to follow these fundamental steps:

1. Define the Scope and Framework

The first important step is to determine the specific regulatory guidelines, standards, and requirements pertinent to the organization, depending on its sector, region, and scope. 

Whether it is about HIPAA compliance training requirements or financial sector compliance, the scope will determine the efficiency of the entire process.

2. Evaluate Current Practices

Once the framework is in place, it is essential to conduct an exhaustive review of the existing organizational policies, IT processes, security measures, and employee training.

The evaluation of the current controls assesses the effectiveness of the measures and their compliance with the latest regulatory requirements.

3. Identify and Document Gaps

This phase requires comparing current processes with regulatory requirements to identify variances.

The variances may include security measures, outdated employee handbooks, or the absence of specific workplace safety training. The variances need to be documented meticulously.

4. Prioritize and Remediate

Identifying which compliance gaps pose the greatest threats is crucial, as not all gaps carry the same level of risk. Organizations are expected to rank them from highest to lowest according to the severity of the non-compliance and the likelihood of the problem occurring. High-risk exposures, such as failing to encrypt confidential data or to offer mandatory anti-harassment training, should be addressed first through an organized remediation strategy.

Why Top Training Providers Offer Free Gap Analysis

Given the intricacy and importance of undertaking a detailed compliance gap analysis, it might appear contradictory that the top training service providers offer this service for free. Nevertheless, this strategy ensures a symbiotic relationship between the training service provider and the organization.

Identifying Specific Training Needs

The most common and significant gaps that arise during a compliance gap analysis are knowledge gaps among personnel. By offering a free gap analysis, a training provider can identify precisely which educational programs an organization is missing.

This allows a training provider to offer highly specific solutions, such as specialized cybersecurity awareness training, rather than selling generic packages to an organization that doesn’t need them.

Building Trust and Demonstrating Expertise

A thorough gap analysis also allows a training provider to showcase their expertise regarding regulatory frameworks and industry-specific challenges.

By providing actionable insights into how to improve without incurring any cost to the organization, a training provider can demonstrate their value without being a vendor.

Seamless Transition to Remediation

When a training provider performs the gap analysis, the transition from the problem to the solution is seamless.

The organization not only receives a comprehensive report on its vulnerabilities but also immediate access to the specific professional development programs needed to address them.

Coggno: The Editor’s Choice for Compliance Solutions

When looking for a platform that seamlessly bridges the gap between compliance analysis and remediation, Coggno is the best choice.

As a comprehensive universe of online courses from industry experts, we know Coggno is the exact solution organizations need to effectively address their compliance issues.

Coggno is our Editor’s Choice for compliance training because of its unparalleled flexibility and feature depth to address the specific vulnerabilities identified in a gap analysis.

Unlimited Training Access

One of the most significant challenges in eliminating existing compliance gaps is the cost of acquiring the various training programs. Coggno addresses this issue through the Prime subscription model, which provides unlimited access to thousands of premium courses.

Irrespective of the nature of the identified gaps in OSHA safety procedures, HR compliance, or financial regulatory training, the organization can immediately begin the required educational programs without worrying about the cost of each program.

Marketplace Flexibility

Generally, the identified compliance gaps are specific to the organization’s requirements. In such a scenario, the organization cannot afford to have a generic solution to the identified problem. Coggno’s innovative platform offers training programs created by a diverse group of subject matter, legal, and industry experts.

Irrespective of the nature of the identified gaps, the organization can select training programs created by experts in the field to ensure their accuracy.

Compliance Management Integration

However, identifying gaps and providing training is only half the battle; an organization must also demonstrate that it has implemented the remediation.

Coggno stands out in this respect because it offers a comprehensive compliance management system as part of its learning platform.

This enables an organization to monitor its employees’ progress and automatically assign courses to them based on their roles. It is an unassailable proof to any regulator that an organization not only identified its compliance gaps but also took resolute action to address them.

Mastering the Compliance Gap Analysis

In today’s dynamic environment, ensuring an organization maintains a robust compliance posture is not only an act of due diligence but also a strategic imperative.

As Metricstream’s guide on conducting a compliance gap analysis states, with 60% of organizations struggling to meet compliance requirements amid ever-increasing complexity, the need for a proactive, structured approach to identifying and mitigating compliance risks has never been more critical.

A Compliance Gap Analysis is More Than a Checklist

A compliance gap analysis is the process of comparing an organization’s current compliance activities with the standards and regulations it is required to comply with.

A compliance gap analysis is a forward-thinking approach to identifying where an organization’s controls, documentation, and/or procedures may be inadequate and to taking corrective action before they become major problems.

As Compliance.com points out in their article on the differences between a compliance gap analysis and a compliance effectiveness evaluation, a compliance gap analysis is a report on the “missing or incomplete elements of a compliance program.”

It is important to differentiate between a compliance gap analysis and a compliance effectiveness evaluation because both terms refer to an independent assessment of an organization’s compliance program as required by various regulations from bodies such as the Department of Justice (DOJ) and the Department of Health and Human Services Office of Inspector General (HHS OIG), though both analyses have different uses and levels of depth as explained by Compliance.com and summarized in the table below:

Source: Adapted from Compliance.com

The “Why” and “When” of a Compliance Gap Analysis

The main objectives of a compliance gap analysis are to identify weaknesses in a compliance program, optimize compliance spending, build stakeholder trust, and prepare for future regulatory changes.

This is an essential process for any business or organization looking to proactively manage its risk profile. According to Metricstream, a leading firm specializing in corporate governance, risk management, and compliance solutions, a compliance gap analysis should take place under several key circumstances. These include:

• Prior to implementing new regulations
• Prior to a scheduled audit
• After a security incident
• During significant business changes, such as mergers or acquisitions
• As part of regularly scheduled reviews

Organizations must regularly conduct a compliance gap analysis every two years or so, along with a fresh risk assessment. This is to ensure that an organization’s compliance program remains relevant to its risk profile.

A Step-by-Step Guide to Conducting a Compliance Gap Analysis

While the actual process may vary based on the organization’s size, industry, and applicable regulations, the following five-step process, derived from best practices at COMPLY and Foley & Lardner, can serve as a basis for a successful compliance gap analysis for any organization.

Establish the Scope

The first step in performing a gap analysis is clearly defining the scope of the analysis. This would include identifying the specific regulations and standards to be addressed in the analysis, as well as the business processes and functions to be addressed.

Gather Relevant Documentation and Identify Requirements

The second step in the process of performing a gap analysis involves collecting and analyzing all relevant documentation and identifying the relevant requirements.

This would include the collection and analysis of ethics statements, compliance policies and procedures, training materials, and past audit findings. Additionally, the process for the gap analysis would also include the collection and analysis of all relevant regulations

Compare Existing Controls with Requirements

This is the most important part of the gap analysis process, where a careful examination of the existing controls within the organization is made against the identified regulatory requirements. It is important that gaps are not identified only at the policy level, but that the policies are also implemented and well understood by employees.

Develop a Corrective Action Plan

After identifying the gaps, the next important part of the gap analysis process is the development of a corrective action plan to address the gaps identified during the process. It is important that the identified gaps be prioritized by their potential impact on the firm.

Track Progress and Maintain Momentum

It is important to track the progress of the corrective action plan so that all the gaps identified are addressed appropriately.

Bridging the Knowledge Gap: The Role of Effective Training

Another recurring theme is the fact that “just because a policy is written doesn’t necessarily mean it’s being followed.” Thus, a good compliance program is not just about the policies and procedures put in place, but also about the employees’ knowledge of these policies and their ability to follow them. At this juncture, the term “knowledge gap” becomes critical.

Thomson Reuters states that research shows the human brain retains information better when it is repeatedly exposed to it at regular intervals. Thus, by adopting a training methodology that “says it, says it, and says it again,” organizations are better positioned to move their employees away from the “forgetting curve” and towards the “learning curve,” as Thomson Reuters emphasizes.

Moreover, a good training methodology should cater to the different learning modalities of the human brain, i.e., the “visual,” the “auditory,” and the “kinesthetic.” This can be achieved through the use of a multitude of training methods, such as

Conclusion

A compliance gap analysis is an essential tool that no organization committed to developing a culture of compliance should ever fail to utilize. This is because identifying gaps between what is currently being done and what is required enables an organization not only to reduce its legal and financial risks but also to improve its operational efficiency.

Therefore, as the regulatory environment continues to change, a gap analysis process, coupled with employee training, remains a cornerstone of an effective compliance program.

References

[1] Compliance.com. “The Difference Between a Compliance Gap Analysis and an Effectiveness Evaluation.”

[2] Metricstream. “How to Conduct a Compliance Gap Analysis?”

[3] Foley & Lardner. “Five Compliance Best Practices for Conducting a Compliance Gap Analysis.”

[4] COMPLY. “How to perform a regulatory compliance gap analysis.”

[5] Thomson Reuters. “Avoiding the knowledge gap with microlearning.”

FAQ

What is the difference between a compliance gap analysis and a compliance audit?

Basically, the two concepts, compliance gap analysis and compliance audit, refer to different purposes… According to Compliance.com, a gap analysis examines what you are doing now and assesses how far you still need to meet the standards or requirements.

In other words, it serves to identify missing or inadequately covered requirements and areas. An audit, on the other hand, is a review of an organization’s compliance with applicable laws and internal policies. So a gap analysis is a tool for identifying shortcomings, while an audit is a tool for assessing compliance. 

How often should we conduct a compliance gap analysis?

If nothing else, you should conduct your compliance gap analysis at least every two years, preferably when updating a risk assessment. 

Prior to the implementation of new regulations, before doing scheduled audits, after security incidents, and during major organizational changes. Depending on how regulated your industry is and how much risk your organization poses, the frequency may be increased.

Who should be involved in conducting a compliance gap analysis?

There is more than one stakeholder in the company who can conduct a successful gap analysis. Foley & Lardner’s research shows that compliance officers, legal counsel, internal auditors, business unit leaders, and subject-matter experts should be involved in this process at a minimum.

Getting different perspectives, for example, from compliance officers, legal counsel, internal auditors, business unit leaders, and subject-matter experts, can uncover gaps that would otherwise have been missed and ensure that the analysis is a true reflection of how compliance is carried out throughout the organization.

What should we do if we identify significant compliance gaps?

After the gaps have been identified, you should draw up a very thorough corrective action plan that addresses them, based on the level of harm they can cause and the degree of exposure they will lead to your company.

For each gap, lay out a clear set of tasks, designate who will do what, establish a measurable timeline, and ensure the necessary resources are available. Besides, it is crucial to monitor progress regularly and ensure that each identified gap is addressed methodically.

How do we ensure that the identified gaps are actually closed?

To close the identified gaps, it is important to monitor the progress. Metricstream advises on the need to monitor the rate at which the identified gaps are being closed, the rate at which each gap is being closed, the level of residual risk before and after gap closure, and the effectiveness of the newly implemented controls.

In addition to the above, as COMPLY advises, the closed areas should be incorporated into the overall compliance training to ensure effective compliance.

What is the relationship between a gap analysis and a risk assessment?

A gap analysis is the next step after a risk assessment. According to Foley & Lardner, the risk assessment identifies the risks an organization faces, while the gap analysis assesses whether the organization’s compliance policies and controls are effective at addressing those risks.

What can be done to bridge the knowledge gap in the training for compliance?

To bridge the knowledge gap in compliance training, Thomson Reuters has suggested that the organization make the best use of training methodologies such as microlearning, which involves repetition at regular intervals.

The organization can make the best use of multiple senses, such as vision, hearing, and touch, by deploying videos, audio clips, real-life examples, and quizzes for compliance training.

Should the gap analysis be done in-house, or should we hire external consultants?

Both the in-house team and external consultants have their own benefits and drawbacks when conducting a gap analysis for training compliance within the organization. The in-house team has the advantage of having in-depth knowledge of the organization and its culture.

However, external consultants have the advantage of access to best practices and expertise from other organizations.

What is the price of doing a compliance gap analysis?

The price depends greatly on the extent, difficulty, and number of your business. Compliance.com points out that a simple gap analysis costs about 30-40% less than a basic evaluation of compliance effectiveness.

Besides, factors that determine the price include the number of rules to be checked, the complexity of your compliance system, whether you hire external consultants, and the level of analysis.

What are the ways to measure the effectiveness of a compliance gap analysis?

There are various ways to measure performance. To name a few, converting a portion of identified shortcomings into implemented solutions, the average time to close the solution, reduction of residual threats, no recurrence of audit findings, the efficiency of newly implemented controls, a better outcome of the regulatory audit, and, eventually, fewer cases of non-compliance and penalties.