How can risk management add value to my organisation?
People are the workplace’s greatest asset, it’s a fact. An organisation’s success depends on the people behind it.
All organisations operate in an environment of economic uncertainty. Subject to a wide range of internal and external influences, they are exposed to confusion and risk. This can directly affect the ability to manage objectives. With unprecedented changes underway in culture, technology and business and regulatory frameworks, organisations need to proactively avoid overcommitting and be the catalysts for change.
The management of risk can take many forms, and threats can be both internal and external. The internationally recognised benchmark, ISO 31000:2009, Risk management – Principles and guidelines defines risk as “the effect of uncertainty on objectives”.
A lot of investment is focused towards economic and business growth to ensure an upward trajectory, yet there are significant risks that relate to the internal aspects of an organisation — its people.
Deloitte’s global survey report, Taking aim at value: Avoid overconfidence and look again at risk, surveyed more than 300 senior stakeholders to get an outside-in view of the role of the risk management function.
From this, the majority of respondents showed confidence about their risk management strategies. However, three out of five stipulated that the risk management leader needs to spend more time delivering the strategist role. Interestingly, only 10% of organisations have a risk management leader who reports to the management board. This shows that although confidence is high, the strategic aspects of risk are insufficient.
What are the HR best-practice tactics to create a risk-adverse environment and adeptly handle risk as it occurs? Here are the top industry areas to focus on, along with practical tips to improve processes.
1. Succession planning and management
Talent acquisition and management are a critical aspect of HR. The Enterprise Risk Management Association (ERMA) notes the complexity around onboarding and getting staff levels right as when it’s imbalanced it will negatively affect productivity and morale.
Devise an always-on recruitment strategy to hire the right talent at the right time to fit exact positions.
Hone a process for onboarding talent to encourage a quick-to-learn process so individuals are productive sooner.
2. Values, ethics and leadership
Individuals should be across the culture and values of the organisation from the get-go as well as mentoring individuals that manage teams in best practice leadership.
Ensure business leaders possess the requisite leadership skills and openness.
Reiterate the organisational values and ensure these are disseminated across their teams.
3. Regulation and compliance
HR managers need to be aware of compliance on an ongoing basis, especially around the hiring of contractors. The close management of third-party individuals is critical as misclassifying workers could lead to heavy legal penalties.
Regularly audit HR processes to ensure compliance with governing law.
Report on finances more regularly.
4. Recognition and remuneration
Salary and benefits packages should be simple. Feature reward programs that link performance to pay.
Regularly review and goal set to maximise self-direction and motivation, and to align with changes in the organisation’s direction.
5. Training and development
Offer training and upskilling programs as part of an always-on learning culture.
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