Top 8 Issues in Risk Management

Whether it’s addressing workplace accidents, keeping up to date on legal compliance issues, or handling unemployment claims, risk management is important for any business or organization.

Top 8 Issues in Risk Management - Resourcing Edge

Risk management programs aren’t just about minimizing crippling risks; they’re also an opportunity to reduce costs, save time, and gain the competitive edge.

But, there’s only so much you can do on your own. Learn about the top 8 issues in risk management and how a Professional Employer Organization (PEO) like Resourcing Edge can help.

What is Risk Management? 

Risk management means different things to different people, but generally it refers to the management of anything that might jeopardize organizational goals. This includes liability and legal risks, financial risks, workplace safety, fraud, and data security.

Since each organization is different, there is no one-size-fits-all approach. This is why it’s so important to hire a Professional Employer Organization to help identify and mitigate the risks that are unique to your business.

In the world of human resources, risk management deals with things such as workers’ compensation, unemployment claims, and compliance and regulatory issues.

As a business or organization, you want to minimize potential risks as much as possible. Investing in risk management allows you to save time and money, reduce accidents, and be prepared when crisis strikes. 

Top 8 Issues in Risk Management

  1. Workers’ Compensation

Workers’ compensation claims cost businesses over $60 billion every year. In order to prevent accidents and injuries, save on workers’ compensation insurance, reduce the direct cost of premiums, and save on all the indirect costs of on-the-job accidents, it’s important to take a proactive approach.

Indirect costs can include hiring and training replacement employees, adjusting work schedules, investigating accidents, and implementing safety procedures and corrective measures.

Here are some things you can do to reduce workplace accidents and injuries:

Effective Hiring and Training 

It’s important to hire qualified employees to reduce employee mistakes and increase productivity. Make sure you have sufficient time to find the right employee. Careful selection makes sure you have the best employee for the job.

Consider using:

Once you hire the right person, there should be appropriate training that incorporates a combination of different learning styles. Keep in mind that training should never stop. All employees need periodic refresher training. 

Safety Programs and Guidelines

Prevent workplace accidents before they occur by teaching employees safety standards and procedures.

A PEO can help you set up:

Remember, safety programs aren’t just documents. Hands-on, on-the-ground training is absolutely necessary for putting safety standards and procedures into action. There should be proper supervision and ongoing evaluation and support from management.

Return-to-Work Program 

Despite proactive safety measures, accidents still happen. It’s beneficial for both parties to get injured employees back to work as soon as possible. The longer a workers’ compensation case remains open, the more expensive the claim becomes.

A return-to-work program helps employees get back to work even if it is on a part-time schedule. Getting employees back to work helps maintain workplace ties and increases the chance of employees returning to work.

How a PEO Helps

A PEO helps manage workers’ compensation costs and claims, while also increasing the safety of your employees and business.

A PEO can help:

  1. Payroll and Tax Management

All the reporting and filings associated with payroll must follow federal, state, and local laws and regulations. Complying with payroll regulations requires specialized HR expertise.

A PEO can help:

Payroll administration can present many potential risks, including wage and hour compliance, regulatory reporting, and federal, state, and local tax compliance.

The expert payroll professionals at Resourcing Edge can take care of the burden of payroll and tax management for you. Our online tools give you access to our Payroll Solutions 24/7, weekends and holidays included.

  1. Technology

Technology, or lack thereof, can be a huge risk. You want to make sure your data is secure and develop a plan in the event of an IT crisis. Technology risks include hardware and software failures, human error, viruses and malicious attacks, and natural disasters such as floods and fires.

The increase of our dependence on technology has led many companies to develop an Information Technology Risk Management (ITRM) program. The goal of an ITRM program is to discover, anticipate, and avoid risks before they turn into problems that could harm the organization.

As businesses and organizations rely more and more on technology, the need for technology risk management increases. What are you doing to protect your digital data?

This is the time to assess whether or not you have a proper program in place to manage technological risk. Companies that ignore the risks associated with technology will end up paying the price later.

Here are some things to consider:

  1. Third Parties

No company is an island. Today, every organization works with third-party intermediaries, usually in the hundreds or thousands. As organizations continue to interact with more and more third parties, it becomes increasingly important to monitor and identify the risks associated with them. 

While it can be a challenge to determine third party risk, it’s important that Chief Risk Officers (CROs) and upper management thoroughly vet third parties before signing up. Third party vetting should also occur on a continual basis.

  1. Fraud and Misconduct

In order to limit financial loss and damaged reputations, organizations need to continually monitor the risks associated with employees, vendors, and third parties to identify and prevent fraud and misconduct.

The majority of insider fraud is caused by collusion of two or more employees. This is because working together creates more opportunities to commit fraud and circumvent anti-fraud controls.

Here are some ways you can reduce the risk of employee fraud:

By monitoring and analyzing employee, vendor, and third party activity, organizations can identify suspicious behavior before any funds, information, or reputations are lost. The additional benefit of having fraud-detection systems in place is that employees are less likely to commit fraud if they know there is a significant chance of getting caught.

  1. Employment

Employment risks cover a large scope. In addition to hiring the right people and providing adequate coaching and training, you also need to worry about wage andhour claims, nonexistent or incomplete job descriptions, workplace harassment, turnover rates, and more.

From discrimination and sexual harassment to wrongful termination and unlawful retaliation, a PEO can help prevent issues from happening in the first place as well as support and represent you in the event that a claim is made.

A PEO can help: 

Our comprehensive Employment Practices Risk Management program helps protect you from the many liabilities associated with discrimination, wrongful termination, harassment claims, and more.

In addition to ensuring compliance and preventing issues from happening in the first place, Resourcing Edge also supports you in the event that a claim is made. This includes claims coverage (Employer Practices Liability Insurance) and claims mitigation (active claims management). 

  1. Legal Compliance and Regulatory Requirements

Laws and regulations, enforced by a variety of agencies, affect every organization. In order to stay aboveboard, it’s important to anticipate and plan for regulations before they are implemented.

There should be protocols and mechanisms in place to manage regulatory change and evaluate current compliance. A PEO can help you assess regulatory risk and maintain compliance effectiveness by through active monitoring, testing, and reporting.

Here are just some of your obligations under the law when it comes to HR compliance: 

This list is far from all-inclusive. It goes on and on. Complying with labor and employment regulations gets more and more complicated every year. 

Prevent potential liabilities and lawsuits by contacting Resourcing Edge for a comprehensive HRAudit. We’ll make sure you are compliant with all federal, state, and local laws and regulations. 

  1. Crisis Management

CROs and upper management should place a big emphasis on crisis management — scenario planning to deal with potential risks and crises, such as cyberattacks, regulatory scrutiny, workplace harassment, compliance challenges, litigation, and more. 

Since these issues often occur without warning, it’s important to have a plan to deal with them when they occur. This can include on-call lawyers, IT experts, consultants, and other professionals in order to take swift action on a moment’s notice.

Top 5 HR Risks 

  1. Employment – discriminatory practices, hiring the wrong candidate, “unjust” employment, errors in employment contracts and employee handbooks, and more.
  2. Labor Protection and Workplace Safety – physical injuries, uncertain working conditions, lack of safety checks, lack of staff training, inappropriate clothing and safety equipment, and inadequate or non-existing safety policies and procedures.
  3. Employee Supervision – insults, harassment, revealing personal information, inadequate job descriptions, no employee manual, disconnect between training and actions, and no adequate monitoring or discipline procedures.
  4. Leaving of Employees – compensation, organizational assets and equipment theft, and not deactivating all access codes and passwords.
  5. Compliance and Regulatory Issues – labor and employment regulations, compensation, payroll, taxes, benefits, and more compliance and regulatory requirements.

Risk management can’t eliminate risk, but you can save a lot of time and money by hiring a PEO to handle your HR functions. This includes proactive measures such as helping you come up with safety programs and ensuring you remain compliant with all laws and regulations, but also mitigation and claims support such as providing representation and active management of claims.

Where to Start

Obviously, there are a lot of risks associated with running a business or organization. Understanding organizational risk — employee, technological, compliance, and more — is critical.

But don’t panic! Rather than trying to tackle everything all at once, simply contact Resourcing Edge for an HR Audit to identify what’s working and what’s not when it comes to risk management.

You can offload many of your HR and employment-related risks and obligations to us. Resourcing Edge is an expert when it comes to human resources strategy, employee relations, and compliance issues.

By using a Professional Employer Organization like Resourcing Edge, you can take your mind off the day-to-day work of payroll, HR administration, and risk management and focus on what’s important — growing your business. 

For more information on Risk Management Solutions for your business, don’t hesitate to contact Resourcing Edge at (214) 771-4411.