The ever-changing world of work is constantly presenting new challenges to organizations that aim to thrive.
Those who fail to respond and make the necessary changes stand to face the consequences of losing employees, getting a bad reputation, and dealing with authorities, to name a few examples.
Risk management happens to be one of those inevitable things that are more or less impossible to eliminate. At best, companies can implement certain practices in anticipation of what might come, reducing the odds of a risk coming into fruition or minimizing the damage.
What Makes Risk Management So Important?
Other than the aforementioned consequences, risk management also helps with the overall productivity of an organization.
Imagine how focused a worker can be if potential risks are on their mind while working. Creating a cohesive work environment is an unreasonable aspiration under such circumstances.
Of course, given how popular a hybrid work model and remote working are in general, those who stay at home do not face immediate threats that occur in-house. They have an easier time focusing.
On the other hand, it does not mean that remote workers can rest easy knowing that they can avoid possible risks.
If anything, the employee risk area list goes beyond what is just happening on-site. Organizations have to consider multiple factors that make a monolith, that is, the workforce.
Also Read: 3 Proven Ways to Boost Employee Productivity
The List of Key Employee Risk Areas
It is in the hands of human resources to ensure employees are equipped with the necessary skills and tools to carry out their tasks.
By dedicating themselves, workers also expect to get something in return, i.e., career opportunities.
The risk is in the failure to provide the development at the right time or providing it only to a select few. The latter, especially, reflects poorly and creates friction within the workforce.
Disputes between peers or employees and upper management may result due to poor ethical practices.
Some organizations might take the risk of choosing one candidate over another because of religion, sexuality, or gender.
Such a mindset signals that the organization has problems when it comes to ethics. One of the most prominent hazards associated with HR risk management is to encourage and implement equal opportunity hiring, which leads to a more non-discriminatory work environment.
Many people associate work risks with various incidents that lead to physical injuries. At the same time, there is also a bigger emphasis on the mental employee state.
It is crucial to ensure that an organization’s policies and activities are in line with local regulations. Moreover, since the law gets updated on a regular basis, keeping up with the changes and implementing them can be tricky.
Security and Privacy
Cybersecurity is another headache for many organizations. Data breaches occur without prior warning, so it is imperative to have a proper system in place to prevent the risks.
Both employee and client data have to be stored safely. Also, people in charge of handling the information have to be held to a high standard considering the repercussions of misusing data.
The general functioning of an organization’s workforce in relation to employee engagement with peers and the company itself also poses multiple challenges.
Conflicts, burnouts, the sense of unfulfilled expectations, and other similar issues are an obstacle preventing a productive environment.
No employee will work for free. They expect to get a salary that justifies their qualifications and the effort put into carrying out the work.
Besides, it is not just a salary. Benefits come in different forms, and it is up to the employer to find out what the workers need. Otherwise, the risk of having some of your employees leave for a competitor increases.
Structural changes vary from small to significant. A department may promote someone from outside or within. Alternatively, a company could merge or get acquired, which poses serious questions to consider for the staff involved.
It helps when there is enough time to prepare for everything, but there are still different risks, such as someone deciding that they do not want to continue working in the organization just before the change.
Disruptions are a nuisance when transitioning to a new structure, and it is no wonder that so many organizations struggle.
Creating an Effective Employee Risk Management Strategy
Understanding where the risks lie is part of the management, but you also have to create an effective strategy. Let’s take a look at how the process should be.
Assessing the risks
The first step should be assessing the current risks in the organization. Looking back at the history of what was the biggest problem helps in planning and preparing in advance.
If a company has few problems to take care of, they will have an easier time than those who have a plethora of risky areas.
The sense of feeling overwhelmed can be crippling, but even that is possible to overcome if you break problems down one by one.
Sometimes, companies see a risk and question how likely it is to actually occur. Or whether the consequences are detrimental enough. For instance, if you have to invest more money in a security system than the losses that would occur in case of a hazard, financially, that does not make sense.
However, safety and employee risk management, or rather prevention, should be a priority. The assessment should not be about cutting costs.
Identifying suitable precautions
Precautions are a safety net that exists in case of a threat becoming an actual problem. Different organizations have different models and areas, so they have to adjust accordingly.
Putting enough effort into finding the risks means it is easier to find precautions. Some implementations will be company-wide. Others, meanwhile, will involve individual employees and departments.
Personal advice is heavily encouraged as well, particularly when it comes to senior employees or those from another department who specialize in a particular subject.
Take IT, for example; let’s say someone receives a new MacBook for work but does not know how to delete apps on Mac that won’t delete. Such issues can cause one to think that there is a potential malware threat, and who knows what that could lead to, especially if the device has sensitive data on it or is part of a bigger network.
Checking in with someone who understands such things should be a heavily encouraged policy throughout the organization. Not only does it identify potential risks, but it also leads to finding solutions.
Establishing a monitoring system
What follows after assessing the risks and finding solutions is a monitoring system. There should be a constant assessment of what is going on.
It will require additional resources, but the step is inevitable to ensure that the risks are minimized. At the end of the day, there is only so much that supervisors can do.
A monitoring system will also answer whether the risks are managed better. Registering incidents and seeing the trend of how the numbers change over time is a worthwhile investment.
Monitoring also lets organizations observe how specific risks affect different employees/departments.
Finally, by having a bigger picture, companies can determine whether people within the organization require additional training. Lack of communication, personal skills, and other areas can and should be improved if it helps with the overall organizational risk management.
Seeking new solutions
Staying ahead of the curve is an excellent piece of advice for risk control. An effective system in place is great, but it does not mean that organizations should give up on an idea to improve it.
Perhaps an employee comes up with something from their personal experience and shares what could have been done to avoid a problem.
Keeping an eye on the industry and learning from the troubles of other organizations are also worthwhile considerations. Instead of waiting for a risk to get to you, be proactive and introduce preventive measures.
To sum it all up, organizations have to create a strategy that prevents or minimizes risks so that employees can focus on their work instead of pondering what might happen.
There are multiple sources for potential risks, but it is to be expected, given how volatile everything is these days.
At the same time, though, changes also mean new and improved means to fend off the risks, and that is what organizations should take advantage of when working on applications of risk management and prevention.
Frequently Asked Questions
Q1. What is employee risk management?
Ans. Employee risk management can be defined as a business aspect of ensuring that people within the organization can focus on the work instead of worrying about risks that are present in the environment.
Q2. Why must organizations work on reducing potential risks?
Ans. A risk-free work environment means that employees can focus on what matters the most—carrying out the tasks given to them. This leads to a functioning and productive organization that achieves its goals.
Q3. How to create an effective strategy to reduce potential risks?
Ans. An effective strategy should be based on risk assessment, precaution identification, constant monitoring, and seeking new solutions.
Since different companies have different pain points to worry about, there is no universal answer to how a risk management strategy should be carried out. Instead, organizations have to take already established and effective methods and apply them accordingly while making adjustments along the way and looking for better alternatives.
Subscribe To The Engagedly Newsletter