Solvo Global

The complete guide to HR risk management

The Complete Guide to HR Risk Management Every Manager Needs

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 (HR) risk management could benefit your company as a whole. 

Here’s a quick rundown on what HR risk management is, along with common HR risks companies face and strategies that could mitigate these risks.

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

A comprehensive risk management plan should have a place on your business' overall roadmap to success.

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 surround employment. This is why it’s very important for people in HR to be aware of local, state, and federal 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 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 is 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

Talent acquisition comes with its own unique needs.

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 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 manage 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. 


Have you ever heard the phrase that people don’t quit jobs, they quit managers? It may be a cliche, but there is 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 your 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 produced by employees in their department. 

Don’t be afraid to have a one-on-one talk with a manager that could be causing issues. They may not be aware 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 manage 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 arrive 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, their work will 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, implement these strategies:

Give Employees Opportunities to Learn 

Giving your employees opportunities to learn is key to keeping them motivated.

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 for you. We invite you to contact us today so we can start talking about how we can help your business.