Table of Contents
What is a Risk Register?
A risk register is a tool used in management to identify potential risks in a company or project. In human resource (HR) management, the tool is essential in tracking, analyzing, and mitigating employee-related risks before they occur. It enables HR to deal with the risks emanating from having a workforce.
The Benefits of an HR Risk Register
The HR risk register is pivotal in the hiring process. It enables your team to develop an effective recruitment plan to hire employees that fit your company’s values and skill requirements. The onboarding process also occurs smoothly without faulty promises, compromises in the screening process, biases in choosing applicants, and contract issues.
Better risk management also improves employee retention rates. A study by the Work institute showed 75% of employee turnover is preventable. Reasons for resignation ranged from managerial relationships, productivity, opportunities for growth, work environment, benefits, and compensation. The risk register helps you to remain proactive, strategic, and efficient in identifying and analyzing retention risks, implementing plans to de-escalate current issues, and establishing protocols to prevent future problems.
In a survey by the Society for Human Resource Management (SHRM), 84% of American employees said managers were responsible for work-related stress and pressure. Of the respondents, 50% attributed their subpar performance to poor management in communication, unrealistic deadlines, and hierarchy matters. The risk register enables HR to spot such issues beforehand by carefully defining job descriptions, establishing constructive communication channels, and building a positive work culture.
What to Include in Your HR Risk Register
Workers add risks to the organization. Employee turnover, burnout, retention, conflicts, and engagement levels impact the company’s brand. Similarly, work culture and setup add to the risk dynamics. Risk awareness and documented mitigation strategies neutralize such issues before they arise.
Mergers and Acquisitions
Your role in HR is crucial in mergers and acquisitions because you help mitigate risks against incoming changes by preparing the workforce adequately. Statistics show approximately 25% of top executives leave in the first year after a merger, and another 15% resign in the subsequent year. The dwindling numbers impact the success of the merger.
The internal business environment can make or break a company. It includes the general attitude of workers, the nature of business operations, and communication channels. You are responsible for cultivating, maintaining, and improving the company’s culture by hiring employees who embody such values, rewarding compliance, and encouraging adherence.
Workers Data Management
Companies have a legal mandate to enforce employee data privacy and cybersecurity, following ethical standards in data collection, use, retrieval, and retention. Misuse and mishandling of employee information can lead to costly lawsuits. You are responsible for identifying all possible risks regarding data management and security in an organization.
Employment policies, rules, and regulations in different states, counties, and towns govern HR activities. Your department must know current practice standards and laws about employee management and make the needed adjustments to ensure they comply in every recognized jurisdiction. Compliance risks cover employee contracts, labor laws, and workplace safety.
Employee Related Lawsuits
It is impossible to satisfy everyone in a company. Therefore, preparing for lawsuit-related risks is critical for any HR team. You are responsible for putting feedback channels and acting on raised issues to prevent legal ramifications, boosting employee morale and productivity, and maintaining the brand’s image.
It is your responsibility as HR to enforce ethical practices in an organization – failure can attract lawsuits or tarnish the brand’s image to other stakeholders. Increasing employee awareness, technological advancement, competition, and leadership models augment the urgency of an organization to abide by ethics in its daily operations. Ethical risks are abundant in economic spheres, social responsibility, and legal spheres. They should mitigate risks to ensure equal hiring opportunities, unbiased termination procedures, humane working conditions, high minimum wages, equity in the workplace, and equal pay.
Learning and Development
HR should also neutralize risks that affect the proficiency of the workforce. Incoming employees should be competent in their roles in the organization, and retained workers should sharpen their skills through work-related training to add value to the organization. HR should ensure every employee has an opportunity to learn and grow in their area of expertise.
Compensation and Benefits
An organization reduces its wage-related risks significantly with pay equity throughout its workforce. The pay should be competitive compared to the competition, accommodative of the company’s interest, and fair to all workers. Wage regulations cover security, medical, retirement benefits, workers’ compensation, and more.
It is your responsibility as HR to ensure productivity is improving consistently, employee satisfaction and loyalty to the brand is increasing, and the work environment is positive. HR oversees employee behavior, management styles, and everything in between. The Risk register helps the HR department stay on top of things.