No matter the size or industry you work in, harassment, ethics concerns, fraud and other workplace misconduct is unavoidable. According to the Association of Certified Fraud Examiners, hotline tips are the most common way to detect fraud. Plus, organizations with hotlines experienced 50 per cent smaller losses due to fraud than those without them.

While implementing a hotline in your workplace can help detect and prevent employee misconduct, how you use it is an important factor. For example, should you offer anonymous reporting on your organization's hotline? Read the pros and cons below to decide what's best for your workplace.

Print and hang our free whistleblower hotline poster in communal spaces around your workplace to remind employees to report misconduct.

Advantages of Anonymous Reporting

The top advantage of permitting anonymous reporting is that more employees will actually come forward. Whistleblowers may wish to stay anonymous because they:

• Don't want to be labeled a "snitch" by their coworkers
• Have a close working or personal relationship with the accused person
• Are reporting misconduct on another employee's behalf
• Fear retaliation by the accused or the employer
• Are involved in the misconduct somehow and don't want to implicate themselves
• Want to tip off the employer about misconduct but don't want to get involved with the investigation or discipline

The option to report anonymously lets employees feel less vulnerable. If you don't allow anonymous whistleblowing on your hotline, you may never learn about issues plaguing your organization.

Additionally, permitting anonymous reporting encourages internal resolutions. If they can't conceal their identity, employees may choose to report externally (to the media or police, for example) instead. An anonymous tip line helps you nip problems in the bud and potentially protect your organization's reputation.

Drawbacks of Anonymous Reporting

While offering an anonymous reporting option will help you detect issues faster, it also has disadvantages.

First, not knowing the whistleblower's identity can make it harder to investigate the alleged misconduct. Investigators can't contact the reporter for more information, which could result in major information gaps.

Some employees may use the anonymous hotline with malicious intent, submitting untrue reports against coworkers who have wronged them. An anonymous reporting option makes it harder to punish false reports because you don't know the whistleblower's identity.

Finally, protecting whistleblowers is more difficult when they're anonymous. For example, if another employee figures out who the reporter is and retaliates, you might not know about it or be able to help them under whistleblower protection laws.

Whether your hotline is anonymous or identified, watch our webinar to learn how to respond quickly and fairly to reports.

Anonymous Whistleblowing Laws (Whistleblower Complaints)

In addition to the pros and cons of anonymous reporting listed above, your country's laws and guidelines may also limit your organization.

For example, Portugal does not allow any anonymous reporting. The country also restricts whistleblowing to complaints regarding finance and accounting. Further, someone in a management position must have committed the wrongdoing.

Some other nations, including Austria, Finland, the Czech Republic, Belgium and many others allow but discourage anonymous whistleblowing. Each nation has its own rules surrounding the extent to which they respect your confidentiality and what types of incidents you can report anonymously.

In Greece, for instance:

"Anonymous reports are allowed but discouraged so we encourage you to provide your contact information. Your confidentiality will be respected but may be revealed for any judicial outcomes as a result of an investigation as a result of your report. However, your identity will not be shared with any third parties or to the Board. Reports can concern finance and accounting issues, audit, bribery, corruption and financial crimes or serious issue in defiance of the company’s code of conduct and values."

Venezuela's laws state that "anonymous reports are allowed. All types of concerns or incidents can be reported. Your identity may be revealed as part of the legal obligations pertaining to the report. However, your confidentiality will be protected as much as possible under the law."

RELATED: A Practical Guide to Whistleblower Protections in 2020

Before offering the option to report anonymously on your organization's hotline, be sure to check your country's whistleblowing laws. Also, write and enforce a no-retaliation policy to show employees that you will treat whistleblowers fairly and protect them as best you can.