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Governance, Risk and Compliance
By Diana Buccella Modified February 7, 2021
In the past, human resources departments tended to focus on building skills for existing leadership teams and creating corporate succession plans. Today, however, technology, social media, and the rise of the freelance economy have dramatically shifted the nature of work, and human resources departments play a much more critical role in organizational development and operation.
These changes are ushering in new opportunities, but also posing new threats. That’s why risk management for HR teams is key to organizational success.
Let’s look at four key risks that human resource teams need to consider when building out a risk management plan.
Technology is progressing at warp speed, and that pace of change means that sometimes the technical complexity of work will outstrip the competency of the workforce. For example, American corporate flagship company GE discovered that the sheer magnitude of the technology they were using and the speed with which it was changing had overwhelmed its employees.
To deal with that, GE chose to simplify. Long-time CEO Jeffrey Immelt wrote in Harvard Business Review, “We made GE a vastly simpler company in terms of how it runs – it now has much less administration and shorter cycle times, is more decentralized, and is more willing to let people deep in the organization who are close to their markets take risks without having to undergo multiple reviews.”
Immelt led an organization-wide simplification focus during his 6,000-day tenure as CEO of the 300,000-strong workforce at GE. The simplification project existed to make the company behave more like a lean start-up and less like a dinosaur. Among its many simplification initiatives, GE implemented a new success metric for its employees. Instead of judging its staff members on the volume of work completed, GE focused on teaching its employees to do less work, more effectively.
When workers have time to learn a few technologies deeply, they can keep up with new iterations, threats, and uses for that technology. HR executives know that when employees shoulder a manageable workload, they can master the technology they have to use, leaving them feeling strong and capable in the workforce.
In this active economy, many companies find themselves unable to attract or recruit talented employees who meet their required quality standards. When they do recruit those candidates, they may fail to take advantage of their full skills and knowledge because of poor onboarding strategies.
Many companies try to shuffle onboarding to one side after recruitment, hoping new employees will just pick up on things as they go along. However, according to Ben Peterson, the co-founder and CEO of BambooHR, “Employees who felt their onboarding experience was effective were 30 times more likely to feel satisfied with their jobs, compared to those who rated their onboarding as ineffective.” Onboarding impacts retention, which in turn effects recruitment. To provide a world-class onboarding experience for your new employees, keep it simple, interesting, and personal, and make sure to get started before the new employee ever steps foot on your property.
Data is the new currency of the world, worth more than gold to both corporations and hackers alike. That’s why regulatory agencies are cracking down on the type of data that corporations can collect, where and how they store that information, who can see it, and how it can be surfaced and used. If HR teams fail to keep appropriate records or if those records get lost or destroyed, they may face potential financial and legal penalties.
It’s also important to stay aware of changes in requirements. Recently, for example, GDPR changed the rules for how international companies doing business in Europe can communicate with prospective employees. As data becomes more valuable – and more vulnerable – expect laws to continue to tighten up.
Ask employees to list what they really want out of their jobs, and surprisingly, increased compensation probably won’t break the top five. In a 2015 survey at Glassdoor, 19% of respondents named employee development, including training programs, as more important than salary.
At some organizations, employees may be partially trained or not trained at all for their current role. In other cases, employees may get a strong orientation to the job, but refresher training is not provided. According to some experts, the best time to train employees is about three months after they begin. Most information provided during the first few days of a new job washes over employees due to its sheer volume and the scope of the change they are making. It’s better to provide instruction on company technology and refreshers on corporate policy after new staffers have had time to adjust.
Having a great HR team that operates on up-to-date principles in the field is critical to business success. With Resolver’s risk management software, you can equip that team with the ability to identify risks and reduce their impact before they happen.