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Organisational Risk is also HR Risk!

Posted on May 17, 2016 4:00 pm;

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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

statutory requirements.

  • 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

to risk!

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