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Human Resource is Risk Management

If you ask a company owner/CEO what HR is, you will get many answers. To some it is merely the administrative tasks a company undertakes in the life cycle of an employee. In this view, the leader looks at HR as the completion of a series of minimum necessary tasks, mostly paperwork, in dealing with employment. They will likely think that HR is simply a necessary evil.

Others may say that HR includes every task undertaken in the life cycle of an employee.  Here, the leader looks at HR from a much broader view. The HR department’s responsibilities in this view include; on-boarding, benefit design, personal development, health and wellness concerns, performance evaluation and end of employment transition. The person viewing HR through this lens sees a much more interactive approach in dealing with employees.

At each of these levels and through the area in between, HR is risk management.  In the first view, the only reason to have someone handling HR is to prevent the company from making basic mistakes such as incorrectly completing I-9s or incorrectly handling FMLA leave.  In the second view, the leader understands that there are many risks involved in being an employer and having an HR professional on board, who manages the whole employee, is more likely to keep them out of litigation. Here they rely on the HR professional to address higher level concerns like employee engagement, work life balance, employee development and discrimination.

At the strategic level, HR professionals are given the full responsibility for risk management. At this level the company owner/CEO forms a partnership with the HR professional. They ask for and respect the input of an HR professional when developing programs and creating goals and initiatives.  Here the owner/CEO understands that employee engagement and risk management are directly influenced by corporate culture and the HR professional must be intimately involved in enhancing that culture. In this scenario risk management concerns are elevated to the highest level. The HR leader is responsible for assuring that issues such as discrimination and unfair treatment do not occur. Even more importantly, they assure that a culture exists where employees cannot imagine these types of treatment would ever happen.

Using HR at a higher level positively impacts a business’ bottom line. According to a study by the Temkin Group, a leading customer experience research group, “three-quarters of employees in companies with significantly above average financial performance are moderately or highly engaged, compared with less than half of firms with subpar financial results.” Access to this study is available at the following link.

If you are a small business owner, you may think you cannot afford the luxury of employing an HR professional. Think again … SERPEO can work with any employer to customize an HR outsourcing relationship that gives them access to the features and benefits of a highly effective HR department that is appropriate for their business.

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