Employee risk management is absolutely essential in the workplace, that is unless you enjoy lawsuits and spending a lot of unnecessary money. The Oxford Dictionary defines risk management as “(in business) the forecasting and evaluation of financial risks together with the identification of procedures to avoid or minimize their impact.” Risks are inevitable, and companies have a moral and legal obligation to those who work for them in minimizing or eliminating potential risks.
There are numerous areas of human resources that require risk management outsourcing. Risk management is a cycle; it’s not a one and done item to check off on a list. It requires constant knowledge, updates, and understanding of the risks that potentially face an organization.
- Step one is to identify the risks. Ask yourself and your managers “What could go wrong?” Brainstorm the potential risks and write them down. Risks can be: abuse and harassment (physical, emotional, sexual, financial), workplace injury, wrongful hiring and terminations, safe working conditions, adequate training for employees and supervisors, handbook compliance, state and federal law compliance, company property, access codes and passwords, financial, and company reputation just to name a few.
- Step two is to assess each of the risks on the (1) likelihood or frequency of the risk and (2) and the severity of the outcome.
- The third step is to develop strategies for managing the risks identified:
- Stop the activity because it’s too risky
- Accept the risks due to necessity or urgency
- Modify the activity or situation to reduce the likelihood of the risk occurring or reducing the severity of the outcome of the situation.
- Transfer the risk to another organization (Outsourcing, yay!!)
- Step four is to outline the steps in implementing what strategies your company is going to move forward with. Communicate the plan to all parties involved and delegate responsibilities to each person that will have a task or role in the implementation.
- The last step is to monitor that your plans are working. Plan and monitor these “risk reviews” on a continual basis making sure that the risks haven’t changed or that the solutions are still working. Monthly or quarterly is helpful, rather than waiting for a risk to present itself.
This whole concept might seem like an overwhelming and impossible task to undertake. There seems to be a potential risk in everything that a company might encounter. Outsourcing some of these risks to professionals is the easiest way to start. At Solution Services, we take some of the risks completely away from you and place the risk with our organization. Tasks such as hiring, taxes, employee handbook, workers compensation management and reporting, and potential discrimination claims will all be handled by us. Other risks we can help you manage but we share the responsibility such as injuries, performance evaluations, disciplinary actions, and payroll. We are experts in our field and hiring a PEO to outsource and remove the risk and manage the consequences seems like a easy and workable solution to an impossible undertaking. Let us help you figure out where we can help!