DID YOUR KNOW: More than 50% of respondents said, “Risk Management’ is not integrated into their performance evaluation. (Wall Street Journal)
What this practice area is about
As the People Risks affect the strategic and operational objectives of organizations, it is important to proactively identify them, assess the probability of occurrence, and severity of impact, and manage them to ensure business runs smoothly.
Having a robust risk management function and process allows organizations to be aware of the possible risks and their impact on business, people and the organization. Organizations can systematically identify and classify various risks and prioritize and quantify them.
The process of managing People Risks generally involves the following steps:
- Identify the risks
- Create Key Risk Indicators (KRIs) and Key Control Standards (KCS)
- Track the indicators and create predictive models
- Minimize risk exposure
- Mitigate the impact proactively
- Get your business back on track should the worst occur
Managing People Risks is a key element of HR governance. Developing and implementing effective risk management frameworks can lead to significant business opportunities and allow the HR leaders to ensure that People Risk management is embedded in the overall governance and management strategies of organizations.
How it contributes to business performance
Applying a strategic and disciplined approach to managing People Risks creates a business culture that will have spin-offs that are much more than just compliance to labor laws or protection against unexpected costs for the business.
As per studies, a proactive and strategic approach to managing People Risks will result in the following benefits:
- Improved employee productivity
- Reduced rates of absenteeism
- Improved employee health and wellbeing
- A positive employer brand that helps with attracting new talent
- Increased employee motivation
- Improved employee retention
- Reduced disruptions and costs to the business
- Protection of employees and their families from the financial impacts of loss of income
Organizations that have built predictive risk models are benefitting from the investment through enhanced business performance, a better brand, better culture and higher people engagement.