Organisational Risk is also HR Risk!
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By Cheryl Lyon-Hislop
Any successful, well-executed organisational strategy will be responsive and will enable the company
to benefit change and growth. Furthermore, it will seek to mitigate key risks which will impact upon
delivering its strategy. Human Resources teams should play a leading role in risk assessment and
mitigation and here’s why.
Risk #1: Lack of Ethics
HR is the organisation’s ‘guardian of values’; elevating the role of ethics management on the
strategic HR agenda. As such, ethical behaviour must be woven into each process and activity the
business undertakes to protect its reputation. Potential strategic partners and future employees, as
well as consumers will be well aware of organisations who behave unethically; we read about it
regularly in the news and in trade publications. Think about:
- Values Definitions -Are values clearly defined in a language/manner everyone can
understand? Consider how they are lived on a day-to- day work basis and communicate
examples throughout the company.
- Review hiring practices and including ethics training at induction stage - Gaining a
reputation as an ethical employer can help to attract the top talent. Scarce talent will prefer
to find the most beneficial employment relationships on offer, and will prefer ethical
companies over those who behave poorly. Alternatively, every time you hire an employee
without shared values, you are adding a weak link into your cultural chain, so review your
interview questions and advertisements to attract those who will fit your organisation.
- Remember when Apple, Samsung and Sony faced claims that child labour sourced cobalt for
their technological products? Be responsible and consider the whole supply-chain. HR can
lead discussions on legislation and ethics.
Risk #2: Key Skills Shortage combined with Inadequate Leadership Succession-Planning
Key skills shortages and inadequate leadership succession-planning will impact upon an
organisation’s ability to innovate and grow. Aging workforces will form part of the scarcity of skills in
the next decade, so minimise risk by:
- Future-proofing your talent management strategy by linking directly into how you are
growing your organisation. For example, if your strategy involves moving into emerging
markets, then how can you best plan to have the right people (skills) hired, at the right time
to deliver this?
- Investing thought and money into the leadership pipeline of the future – we’ve seen share
prices can plummet if CEO/Board plans are not in place.
Risk #3: Mergers and acquisitions
Mergers and acquisitions need careful due diligence planning but integration issues must also be
managed effectively to avoid tribunal pay-outs and costly recruitment drives. HR need to:
- Develop an integration strategy, focusing on communications, employee welfare and
development, ensuring all financial costs are driven by HR/Finance jointly to mitigate
potential road blocks.
Risk #4: Lack of Compliance
Finally, compliance (or non-compliance) is a hot topic. More organisations are becoming aware of
breaches of regulations leading to large fines. Bribery, corruption, whistle-blowing are examples of
topics HR need to understand. HR teams need to work with compliance teams to make sure
employees are aware of the potential risks. Think about:
- Carrying out regular audits and implementing development actions, such as re-writing
contracts of employment, policies, or keeping data updated and securely stored as per
- Carry out coaching and development activity, for example, coaching around regulatory
compliance standards or employment legislation.
Keeping abreast of your HR expertise will certainly help your organisation reduce potential exposure