Risk in HR and how to manage it Anna Denton-Jones n avigating employment law.

Risk in HR and how to manage it

Anna Denton-Jones

navigating employment law

Why this topic?

• Organisations often have a less sophisticated understanding of people risk than other risks they face eg:- strategic, operational, financial

• HR criticised for not owning the issue/taking responsibility


What is risk?


DictionaryNoun - exposure to the chance of injury or loss; a hazard or dangerous chance.

verb (used with object) to expose to the chance of injury or loss; hazard or to venture upon; take or run the chance of.

Idiomsat risk, a.in a dangerous situation or status; in jeopardy b.under financial or legal obligation; held responsibletake / run a risk, to expose oneself to the chance of injury or loss; put oneself in danger; hazard; venture.

What is people risk?

• Discussion


Bill Windle, adviser on people risk

• “counterproductive behaviour, from inadvertent to malicious, on behalf of the organisation or the individual”.


Deloitte’s definition

• We can define people risk as “the risk that people do not follow the organisation’s procedures, practices and/or rules”, i.e., that they “deviate” from expected behaviour. Such deviation can be broken down into two components: deliberate deviant behaviour and non-deliberate deviant behaviour.


Rick Freeman, VP at Capgemini

• Aggregation of the following:o Personal risk – what risks can an individual

pose?o What risks relate to what the organisation is

asking of individuals? Eg:- long hours culture, reward systems incentivising the wrong behaviours etc

o Environmental risks eg:- redundancies where individuals feel threatened


Dalila Dabbicco, Prudential

• Focus on lost opportunities: what are we missing out on?


Perry Timms, People & Transformational HR

• Your definition will need constant redefining – get used to that


Your views vs views on the ground

• Discuss with your departments where they feel the top 3 risks are when it comes to people?


What external things will be of influence?

• Environment: location, economy etc• Government support (or not)• Education systems• Immigration levels• Ageing population• Competitors


HR risks

• Exercise

• What are the main sources of people risk for HR?– Recruitment– Induction– During the employment relationship– At the end of the relationship


Keys to creating the right risk culture

• Senior level commitment• Caring about risk not just compliance

– understanding why it is important and matters

• Hire people for the right values – train for the rest

• Risk of tick box exercises• Sustaining the effort over time


Risk Management Framework

Risk description Potential impact of the risk

[low, medium, high]

Probability of the risk

[low, medium, high]

Overall risk

[low, medium, high]

Controls/systems to mitigate the risk

Individual (s) responsible for mitigation of the risk

Monitoring the effectiveness of the controls/systems to mitigate the risk


Risk scoring


C

O

N

S

E

Q

U

E

N

C

E

LIKELIHOOD

RARE (1) UNLIKEL

Y (2)

POSSIBL

E (3)

LIKELY

(4)

ALMOST

CERTAIN

(5)

INSIGNIFICA

NT (1)

LOW

RISK

LOW

RISK

LOW

RISK

LOW

RISK

MODERA

TE RISK

(5)

MINOR (2) LOW

RISK

LOW

RISK

MODERA

TE RISK

MODERA

TE RISK

MODERA

TE RISK

(10)

MODERATE

(3)

LOW

RISK

MODERA

TE RISK

MODERA

TE RISK

HIGH

RISK (12)

HIGH

RISK (15)

MAJOR (4) LOW

RISK

MODERA

TE RISK

HIGH

RISK (12)

EXTREM

E RISK

(16)

EXTREM

E RISK

(20)

CRITICAL (5) MODERA

TE RISK

MODERA

TE RISK

HIGH

RISK (15)

EXTREM

E RISK

(20)

EXTREM

E RISK

(25)

Risk Map

Likelihood

Impact

1

5

710

2

9

8 3

6

4

1.2.3.4.5.6.7.8.9.10.

What are the top risks I think as a lawyer HR departments are running?

In no particular order…………..


Blockages

• Those people who ‘block’ performance in teams not being dealt with

• The problem being moved elsewhere


What are the top risks?

• Inadequate line manger training and coaching and development– How to do investigations– How to conduct hearings– How to manage absence– Recruitment– Performance management– Conflict management



• Short-staffing/burden on teams– Poor performance – Ill-health and wellbeing issues– Dissatisfaction and disengagement– Turnover– Working time risks



• Inter-generational issues– One size does not fit all anymore


More specific issues

• Auto-enrolment• Bribery Act• Equalities and Diversities• Whistleblowing• Equal Pay


Action planning

• Discuss with your neighbour 3 things you are going to do after today


Risk in HR and how to manage it Anna Denton-Jones n avigating employment law.

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