What Is Human Resource Risk Management?

K.C. Bruning

Human resource risk management is the process of managing the elements that could potentially harm an organization from a personnel standpoint. This can include problems such as accidents, legal issues, and dramatic changes in the market. It can also be used to handle important transitions, such as a change in management. Human resource risk management is often outsourced, though it can also be handled internally.

Human resource risk management plays a role in the hiring process.
Human resource risk management plays a role in the hiring process.

An important aspect of human resource risk management is to avoid employee accidents. This includes ensuring that all workers are properly trained for their jobs. It also involves creating work spaces that are free of hazards, from poor ergonomics to machinery that is improperly calibrated.

Avoiding legal trouble is another aspect of human resource risk management. This includes ensuring that the organization is adhering to and not in danger of violating laws and governmental regulations. It may also involve creating guidelines for conducting business in such a way that legal problems can be avoided. This can include ensuring that employee relations, hiring practices, and the employee onboarding and termination procedures are managed correctly.

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Maintaining adequate insurance is another key aspect of human resource risk management. Common areas which may need coverage include property damage and on-the-job accidents. There may be other areas which the organization may not be able to cover and which may require employees or customers to sign a waiver.

Human resource risk management also plays a role in the hiring process. It is in the best interest of the organization to use background checks, references, and interviews to determine if an applicant is a potential risk for the company. This can include anything from illegal activity to skill gaps which could increase the risk of performing a particular job. The process is especially important when hiring for leadership roles, whether externally or internally, as having the wrong person in these positions can have a dramatic effect on the well-being of the company.

One of the tasks of human resource risk management is to keep organizational staff engaged during periods of change. This can include dramatic shifts in the market, personnel changes, and incidents which have a strong effect on an organization. It can include additional training, recognition, and retention efforts.

Another aspect of human resource risk management is to ensure that the organizational structure supports its employees. By ensuring that a company’s systems effectively serve its employees, mishaps become less likely. An engaged, observant workforce can also be a strong ally in the process of risk management.

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