Risk Best Practices: The People Factor
When starting to build your risk program and risk best practices, companies quickly learn that developing a Collaborative Culture of Risk Management (CCR) requires an equal balancing of people and resource management. It sounds as easy, yet it still eludes organizations of all sizes in all industries.
If you get it wrong your own people can become one of your greatest risks. Get it right, and they will continue to be your greatest assets.
This article is the third in our series of the Steady State of Risk Management, where we look at different ways risk manifests itself in the organization, as well as different strategies and best practices for managing those risks across a continuum.
When do Your People Become a Risk?
Your people are always your greatest asset, but employees can also put the company at risk, intentionally or otherwise. When they work remotely, when they have insufficient training, or they may simply be overworked, overwhelmed, or plain and simply burned-out, your risk best practices could be the differentiator in how your employees positively or negatively impact the company.
Churn , equally, can quickly become a significant risk factor, the most nefarious of which could be sabotage, albeit this is relatively rare. Nevertheless, the costs associated with simple breaks in process consistency, on top of training requirements and time needed onboard new employees can quickly take a toll on your company.
Developing strong risk management best practices that both evaluate and engage your people is an important part of your risk program. Here are some of the questions for consideration.
Employee Turnover Self Assessment:
What is our average annual churn rate?
Which levels/roles are most impacted?
What happens if the resources are to go to a competitor?
What is our training spend per employee versus churn cost?
What happens the very next day regarding ongoing processes, audits in transit, or overdue tasks left uncompleted by the departing resource?
People Risk or People Assets
We do know that companies that invest in employee training often have manageable turnover versus organizations that do not invest in training and engaging their people. Engagement is often the key. The most valuable employees are those who want to be an integral part of organizational processes, not just followers.
The same applies to risk management. One of the principal ways to reduce your employee risk is to actively engage them in the process of risk management, which has the added value of reducing all risk. Organizations that develop guidelines and principles for employees to feel part of the risk management process see higher success of collaboration, execution, and development of future talent.
Perhaps you principal risk best practice is employee engagement.
These people factor principles should include:
Explain the “Why” and “What” is important in your risk best practices
Promote positive behavior towards the risk event management
Involve the employees in the decision-making process
Communicate often relevant compliance risk management data to the employees.
Take human factors into account. People will make mistakes.
Be transparent and inclusive to the risk profile impactful events that hurt the company.
Leadership should respond to change
Encourage the correct interaction with the various employees. Risk management tasks are not the only job they hold in the company.
The Importance of a Risk Management Platform
We said this before. Your employees want to be an integral part of organizational processes, not just followers. If you invest in people, part of that investment should be in a platform to make them successful.
The ability to integrate seamlessly and efficiently with a risk program, without being diverted from primary roles and responsibilities can make the difference between success and failure. Ensuring that people have access to a platform, where they are able to either share or extract the information that is relevant to them will engage your leadership, your practitioners and your non-practitioners – the former who need current, relevant date to make impactful decisions, and the latter who often hold information vital to your risk management program.
Finally, while you can make people integral to your risk management program, the program likely fails if they are the only constant. Your platform should be the driver of your process so it is repeatable, available and operable by your current and future workforce.
The right platform can reduce your people risk and all risk through engagement, integration, and continuity.