The Most Common Human Resource Risk Sources

Even among the highest functioning teams and workforces, it’s inevitable: Wherever there are people, there will be problems. Even issues that start out small can escalate into larger dilemmas unless someone intervenes and properly manages any associated risk – the earlier on, the better.

Within businesses, this responsibility falls to HR leaders. It involves identifying potential problems before they snowball out of control, as well as understanding all the possible outcomes of employment-related risk and their potential outcomes. Best-case scenario: it means taking a proactive role to avoid risk all together.

Three common areas of HR risks that may threaten your business – and steps to avoid them – include:

Ethics and Leadership

Research repeatedly supports the truism that often, employees quit their jobs because of toxic bosses. Professional ethics and leadership strengths are critical to keeping employees engaged and motivated and, in extreme cases, avoiding lawsuits filed by those who are severely disgruntled.

• Educate all your employees on your company’s culture, beliefs and values – and continuously help managers hone their ethics and leadership skills. An important caveat here: if your culture needs to change, start there! Because your efforts will be wasted otherwise.
• Convey messages related to your culture and ethical leadership via regular, ongoing communications, starting with new recruits right from the onset.

Compliance

Local, state, and federal labor laws and regulations can be highly complex. They can also change on a dime. It’s important to keep up with them and be sure your organization is complying with and communicating with them.

In addition to knowing and understanding all relevant mandates, you should be regularly auditing your HR processes to ensure ongoing compliance. This includes reporting on your finances in a timely manner.

Compensation

In addition to good leadership, pay and benefits remain major reasons people are motivated to stay at their companies – with flexible, lifestyle-friendly benefits taking on increasing importance in today’s pandemic-influenced world.

• Keep your pay and benefits packages competitive, and tailor them to each individual employee.
• Build rewards programs that link pay to performance.
• Make sure all employment contracts are current and legally sound.

Gulp. What do you do if issues related to these or other HR risks rear their ugly heads at your company?

Trust KeyHR to Help Your Business Manage Risk

Risk management and mitigation are highly specialized areas, so it’s not surprising that a growing number of companies are making the smart decision to outsource them to professional employer organizations (PEOs) or similar business partners. Small to mid-sized companies often don’t have the HR staff bandwidth to include risk experts in-house, so their outsource partners effectively and efficiently fill this gap – in addition to providing numerous other talent management services and benefits. To learn more about risk management outsourcing options tailored to your company, contact Key HR today.