Do you want to find a better way to manage employees at your business and keep people at all levels of your organization happy? Are you interested in finding a better way to protect yourself from potential problems that could affect your business?

If you answered yes to both questions, then you need to invest in HR risk management.

You may have heard about risk management for businesses. But, you may not have heard about the different ways human resource risk management could benefit your company as a whole. 

Read on for a quick rundown on what HR risk management is, along with common HR risks companies face and strategies that could mitigate certain problems.

What is HR Risk Management?

Simply stated, risk management involves looking out for potential risks to your business and figuring out the best solutions to handle them. 

Running a business comes with a variety of unique risks that could cause problems for your company. Risk management specialists try to anticipate and prepare for potential risks that are most likely to happen.

HR risk management focuses on the specific risks employees pose to the business. This could involve risks around improper employee management, employee behavior, or the way you hire and lose employees. 

Proper HR risk management doesn’t just focus on entry-level employees. Everyone from part-time employees to c-level managers are taken into account to help HR measure risks and potentially stop problems before they start. 

Why Risk Management Matters

HR risk management should be an important part of any business regardless of industry or size. Essentially, a comprehensive risk management plan should have a place on your business’ overall roadmap to success.

Employees play a pivotal role in the success of a company. You could have a fantastic product or service, but if you don’t have the right employees, your business won’t be able to succeed. 

If a potential problem occurs, a well-prepared business plan that utilizes risk management may be able to minimize the potential impact. Some of the areas of impact include reduced earnings, lost time, and even negative impacts on important customers and employees.

A good HR risk management strategy could help you find ways to deal with problematic employees, make good hiring decisions, and help you better manage people across your organization. 

Common HR Risks and How to Solve Them 

Now that you know a bit about risk management in the HR space, we can take some time to talk about some of the more common problems you’ll find and how you can mitigate them.

It’s important to note that every organization has its own unique needs. These strategies and suggestions are meant to be a baseline you can use to ensure that you’re planning against risks the right way. 

If you want to create a true strategy around HR risk management, be sure to pay attention to these issues: 

Compliance and Regulations

If you work in HR, you’re well aware of the complicated laws that can surround employment. This is why it’s very important for people in HR to be aware of local labor laws and regulations to ensure that they’re compliant. 

All of your HR processes should be regularly audited to ensure that you’re as compliant as possible. HR professionals who want to ensure that they’re always compliant with the latest laws should follow these important tips:

Stay Up to Date on Legal News

Did your state legislature pass a new law around family leave? Was there a recent update on what can be considered a reasonable accommodation for an employee with a disability? 

Laws can change seemingly overnight, and if you aren’t aware of any new changes, you could be at risk for a lawsuit or fines. Subscribe to local legal publications and set up news alerts for employment law so you can ensure that you stay in the know. 

Sync with IT 

New technology may make employees more efficient, but it also leaves you vulnerable to new potential problems with security and compliance. 

Talk to people in IT about the best way to keep devices secure. Educate your employees on the right way to share sensitive data that is tied to important client information.

Bring in Outside Help

Do you want to ensure that your company’s HR practices are as up to date as possible? Are you worried about neglecting an important compliance issue? 

Staying compliant in a constantly changing world can be difficult. This is why we recommend bringing in outside sources to help your organization with compliance issues. 

It’s always a good idea to get an employment lawyer to look over contracts and HR policies to ensure that you’re staying compliant. You may even want to consider hiring a compliance specialist on a contract basis to fill in any holes your plan may have.

Talent Acquisition

HR plays a significant role in staffing. People in HR often handle recruiting, order background checks, and can have some say in who gets hired and who employers pass on.

Hiring people is very important, but it comes with its own unique risks if it’s not handled properly.

Improper resource planning could lead to understaffing, or even worse, overstaffing employees. Scrambling to bring in new hires or letting go of people can cause a lot of chaos in the workplace. 

If you want to hire the right people and keep employees happy, make sure you follow these important tips: 

Build a Solid Recruiting Program 

Having the right structure around recruiting could help drastically reduce some of the problems associated with bringing on new people.

Getting referrals from already trusted employees could make the vetting process a lot easier. Encourage employees to recommend people they know for roles and make it easy for them to submit internal suggestions. 

Focus on building up a pipeline of potential contractors and direct hires so you can reach out to them when you need to bring on somebody in a hurry. When you already have a robust group to pick from, you won’t have to scramble to fill a spot on the team.

Revamp Your Onboarding Process

Does it seem like it takes a while for employees to get up to speed on certain important tasks? Before you put blame on the new hire, take some time to evaluate your onboarding process.

A confusing onboarding process can make it difficult for employees to understand how to do important tasks, and may make prioritizing tasks nearly impossible. 

Talk to some recent hires to hear their feedback on your hiring process. Get management involved and see what they would change about the way you bring on employees.

Cut Your Losses

Have several people complained about the work of a certain employee? Is there an employee that still struggles with basic job tasks months after they’ve been hired? Are you dealing with someone that just isn’t a good fit for the company?

It doesn’t take long for HR to find a problem employee, but it can take them a long time to actually deal with them. Sometimes it’s best to cut your losses instead of spending precious time and money trying to salvage an employee that isn’t working. 

Some HR representatives are hesitant to fire people because they don’t want to deal with the paperwork and potential risks of letting someone go. However, if you’ve done everything right on your end such as performance improvement plans (PIPs), formal warnings, etc., there’s no use in prolonging the inevitable. 

Leadership

Have you ever heard the phrase that people don’t quit jobs, they quit managers? It may be a cliche, but it also has some truth to it.

If your organization has shaky leadership, you’ll start to see problems pop up in other areas. Eventually, you may lose business, employees, or even professional clout because your managers and people in leadership aren’t doing their jobs well. 

As an HR leader, you have a unique responsibility in ensuring that managers are doing right by their employees. If you want to mitigate potential problems in management, consider these strategies: 

Hold Managers Accountable 

If you notice that a lot of employees are leaving a certain department or if there’s a dip in work quality, then it’s time to have a serious talk with managers. 

There are some things that will be out of your manager’s control, but overall, many can and should be held responsible for the work employees in their department produce. 

Don’t be afraid to have a one-on-one talk with a manager that could be causing issues. They may not be aware that there’s a problem or could be eager for help in solving an issue. 

Train Your Managers 

It’s far too common for businesses to assume that managers automatically know the right way to deal with employees. That’s why it’s important for people in HR to take the time to periodically check-in with managers and train them. 

Hold quarterly training sessions that can reinforce the right way to handle employee conflicts. Ask employees to give feedback about their managers so you can see if they’re lacking in some areas. 

Make Managers Cultural Ambassadors 

Employees are going to follow the lead of their managers. It’ll be difficult to say that everyone needs to dress professionally and on time when their managers come in late and wear stained jeans to the office.

Your business’ culture is very important to your brand and your employees. The managers you hire should exude certain important tenets of your culture.

When you check in with managers, stress the importance of making sure that they represent the company’s culture at all times. Employees will soon follow their lead, and you could see the entire team improve. 

Employee Development 

Managers should play an important role in the growth and professional development of their employees. However, involving HR in the process can help ensure that everything is being handled properly. 

Employees who feel like they aren’t growing won’t hesitate to leave the company. If they end up not leaving, they could grow bored and complacent. Eventually, you’ll see their work suffer. 

Employee growth isn’t just important for individuals, it’s good for your organization, your products, and your clients. Happy employees that feel like they’re growing are more likely to stay at your company, and they’re able to produce better work.

If you want to ensure that your employees are growing, try to implement these strategies:

Give Employees Opportunities to Learn 

A lot of companies claim that they encourage employee development, but they do very little to help their employees grow. Don’t expect your employees to only learn outside of office hours, give them ample opportunities to grow at work. 

Consider giving employees a set amount of hours a week to devote to learning a new skill. Look for opportunities for online training courses from sites like Khan Academy or look for educational webinars people can use. 

Remember, employees can be an important educational resource of their own. Hold monthly lunch-and-learn meetings and encourage employees to do a quick presentation on an important topic. 

Empower Managers to Help Employees Grow

It isn’t uncommon for people to view HR as a barrier that could hinder employee growth. Show everyone at your organization that isn’t the case by working with managers to help ensure that their employees can reach their growth goals. 

Managers should be interested in the growth of their employees. Encourage them to ask employees about their future work goals during their check-ins. 

Once managers find out what employees want to learn and how they want to grow, work on a plan with them to help make their goals possible. Find courses they can take and consider what kind of work you can give them that can help them grow.

Take it a step further and make assessing and reaching certain goals a part of your annual performance review. Give employees extra incentive to reach their goals by tying it to bonuses and potential office perks. 

Get Professional Help Today

HR risk management could be the key to keeping your employees happy and growing your business. When you focus on managing risks around hiring, management, compliance, and employee growth, you set your business up for success. 

We only considered a few issues surrounding HR risk management. There are still lots of other things you can do to protect your business and make your employees happy.

If you’re ready to bring in professional help to grow your company, Solvo is here to for you. We invite you to contact us today so we can start talking about how we can help your business.

Quick! What’s your HR department doing right now? Depending on the size of your staff and company, they might be advertising open positions, recruiting new employees, onboarding new staff, managing payroll and benefits, investigating complaints, writing and policing company policies, changing employees’ status forms, overseeing staff training and development, and much, much more.

When they’re this busy, it’s not surprising that your HR staff can’t see the forest for the trees. They don’t have the time or energy to see some of the very things that would help them the most. How can you improve HR function so they can be more efficient at their jobs?

3 Things Your HR Department Needs to Be (But Probably Isn’t) Doing

Here’s where you can come in. Take a good look at your company and see how many of these your HR department is (or isn’t) doing right now:

1. Share the Responsibilities

Whether working for the official department or not, everyone in your company is involved in human resources – or should be.

Employees should be motivated enough to want to excel. Managers should be deeply invested in developing the people they manage. The leadership team should be harnessing the talents of the entire staff to drive company goals. And your trusty HR department should be behind them all, pointing the way.

Not only does this shared responsibility alleviate some of the HR overload, but it creates employee engagement and can inspire real, heartfelt ownership in the company.

In addition, working together from a consolidated system improves communication and keeps everyone in the company on the same page.

2. Consolidate Systems for Efficiency

Payroll information in one computer system, basic employee data in another system and benefits in a third. Sound familiar?

Not only does storing information in separate systems force some poor HR staffer to type an employee’s requests and information into multiple databases, but it also requires that every change made over the years – benefits modifications, address changes, tax adjustments, pay increases – be made in triplicate.

In addition to being an extremely inefficient use of time, multisystem processes can practically guarantee mistakes.

Put all your information into one unified system, however, and your team can spend a lot less time on mundane data entry. And that gives them more time to work on a strategy that can help grow your business.

3. Spend More Time on Your HR Strategy

There are a couple of ways to give your HR staff some breathing room. Some companies choose to outsource part of their HR responsibilities to another entity. But if you already have a capable and fully-staffed HR department, you may just want to improve your technology so you can streamline numerous functions.

With more time, HR can focus on big-picture plans for people and processes such as:

• Developing training programs so employees reach, and exceed their potentials
• Motivating staff to excel
• Developing competitive compensation
• Methods to reward and retain the best employees
• Best practices in measuring performance
• Building succession plans

Remember, technology is your friend. According to Scientific American, people tend to buy new cell phones approximately every two years. Shouldn’t your company’s HR system deserve the same attention?

Now granted, a new HR system costs a bit more than the latest iPhone but if it helps your company reach its business goals, shouldn’t it be more important than a device that lets you play Candy Crush?

The latest human capital management (HCM) systems relieve HR departments who are drowning in data by consolidating HR data and processes such as:

• Employee administration
• Employee and manager self-service functions
• Benefits administration and enrollment
• Payroll management
• Tax compliance
• Reporting and analytics

Future Proof Your Human Resources Strategy: 5 Critical Steps

If you think it’s important to have a business plan and strategic vision, you need a human resources plan, too. It’s just as critical.

An HR plan gets your people ready to execute your business strategy and goals. It helps you prepare your current staff and anticipate the people you’ll need to add in the future. It preps your business for employee turnover and your managers for making future hiring decisions more strategically. A good HR plan should also include a succession plan, so you can limit disruptions to your business should there be a change in management or structure.

Follow these five critical steps to creating an effective HR plan:

1. Assess Your Current Workforce

Your first step in strategic HR planning is identifying your current employees’ knowledge, skills and abilities. This includes evaluating your employees’ strengths, education levels and additional training or certifications.

But you shouldn’t stop there. You should also consider what talents they have beyond their current job descriptions. For example, your data entry employee may also have a knack for building customer relationships. You can pick up on these less obvious talents by getting to know your employees through regular conversations, both formal and informal.

Chances are your personnel files already contain a wealth of information you need to help monitor your employees’ talents and skills, such as their resume, continuing education history, performance reviews and completed projects.

Having a system (like an interactive organizational chart) to capture and archive your employees’ information can make keeping track of your employees’ talents easier. At the same time, your employees will feel more valued if it’s clear that you’re making note of their strengths.

In addition, performance reviews can help you determine when employees are willing and able to assume additional responsibilities. When employees consistently rank high in all categories, it is a good indicator they may be ready to take on some more challenging work. Not all employees want to move to other positions, though. If this is the case, look for ways to challenge them in their current roles.

2. Create Employee Development Plans

Having qualified employees is only one step when building a long-term, winning workforce. To make a real impact, your employees’ work needs to support the company’s growth goals.

You can do this by making an employee development plan for your staff. This will help you create clear direction on how to increase their skills and advance their careers so that your business can forge ahead. Follow these steps to help make sure your employees’ development plans are on point.

• Consider your business goals. – Before you set objectives for employees, you should try to align their development plan with your company’s needs.
• Talk to your employees. – Don’t just assume you know your employees’ skill levels and career aspirations.
• Decide what skills your employees need. – Once you’ve looked at each of your employees’ abilities and experience, as well as your company’s needs, decide exactly what skills each person needs to acquire.
• Create an action plan. – Once you know what the objectives are, you can figure out how your employees will go about achieving them.
• Apply new skills in the workplace. – Set up some opportunities where your employees can quickly apply their new skills to the job and get feedback.

It’s important that your company doesn’t neglect the employees it already has, especially top performers. Even for your high achievers, there’s always room for improvement, and they still need development-focused attention from you.

The top reason employees stay with a company is they feel challenged by their work, according to an Aberdeen report. In fact, 34 percent reported that they are sticking with their current employer because they foresee an opportunity to be part of the future growth of the company.

3. Create a Succession Plan

With business growth comes change. It’s inevitable. Whether it’s a shift in the executive team or a reorganization of departments, you need to be prepared. A succession plan can help you minimize disruption by identifying critical roles in your business and employees who have the skills to immediately assume these positions if someone should leave.

You may choose to involve employees directly in creating your succession plan. This would mean having conversations with all of your employees to find out what their career goals are, where they see themselves in the future, and what development they feel they need to get there.

You can also create your succession plan behind the scenes. The choice really depends on what your organization’s culture is like.

In addition, you should always be prepared to keep your employees well informed about changes and explain how exactly a change may affect them. Transparency eases anxiety and keeps your employees from imagining negative reasons for the changes.

4. Perform a Gap Analysis

A gap analysis helps you identify what resources your company has and what you’ll need in the future. When performing a gap analysis, you’ll assess your HR practices and infrastructure to determine where your company is falling short. For example, some of your HR practices may be designed to fit where your company was five years ago, but don’t meet your needs today or where you plan to be soon. After a gap analysis, you can improve your current procedures and implement new practices that will better support the growth of your business. 

When conducting a gap analysis, take a look at your:

• Job descriptions – Do they match the expectations you currently have for your employees and outline all the necessary skills and requirements?
• Employee handbook – Have you reviewed and/or refreshed it in the last two years? Check to see if your policies are still aligned with employment laws. This is especially important if you’ve expanded into new cities or states where you may be subject to different regulations. When was the last time your employees read the handbook? Consider asking them to re-read it once you make updates.
• Training programs – Are your employees being prepared for their roles in an organized way that still makes sense according to business needs?
• Health benefits – Are you providing what is required by the Affordable Care Act (ACA) while also meeting the needs of your employees?
• Sick days – New paid sick day standards are emerging across the country in a few states and a growing number of cities. Check the current sick days laws to be sure you’re in compliance.
• Business performance – If revenue is climbing, it may make sense to up your contributions to your employees’ retirement accounts or award more days of paid time off, which will add value to your total rewards package. If revenue is down, consider scaling back on some of those benefits to help stabilize your business.

5. Decide If/How to Increase Resources for the Future

As your business grows, so will your staffing needs. To find the best people for the job and your business, you must know what you’re looking for.

Review the information you have gathered about your current workforce. Do you have enough people? Do they have the right skills and know-how to help you achieve your business goals?

This information can help you decide what jobs need to be filled and who would be the best fit. From there, you may determine if you can promote from within or if you’ll need to recruit new talent as your business grows. Many times a current employee is a good fit with some additional training.

Incentivize Improvements in HR Function by Considering a Rewards Program

To keep your employees happy and motivated, you should reward them. Their wellness should be your number one priority. People who get acknowledged for their hard work are more productive and will be happy to spend eight hours every day working for you. 

Employee rewards programs offer numerous benefits to both companies and employees. For example, less than a third of all workers feel valued or appreciated in their position. Those employees who don’t feel like they’re a vital part of the company could leave their jobs, hurting companies who need those positions filled.

Talk to your employees about their needs and consider offering incentives for the completion of weekly team goals. You can buy them lunch, cinema tickets, a gym membership or take the whole office for a team-building picnic. 

Some employers even take rewards a step farther by offering experiences instead of money, a selling point with the millennial generation. Employees can earn everything from dinner to a Hawaiian vacation. There are tools that can make this task easier. 

Today, many companies offer employee rewards programs from continuing education opportunities to cash bonuses or paid time off. These rewards are more than giving an employee a tangible reminder of a job well done. A well-structured employee rewards program can create a bond between companies and employees, ensuring a long partnership for years to come.

Give These HR Tips a Try

Try any (or all!) of these helpful tips on how to improve HR function for your business. Your employees will be happier and your business will prosper. Alternatively, give us a call at Solvo Global and let’s achieve a better workplace through an efficient HR department.