Managing Risks in Human Resources

Risk management for human resource professionals means to mitigate potential risks that affect the financial health of an organization.  More narrowly ensuring HR tasks are compliant with all state and local laws, workplace fairness to avoid costly lawsuits, ensure good hiring practices, health, safety, retaining talent, and having a healthy organizational culture.  In this article, we will discuss potential risks and activities that need to be assessed and measured to avoid financial losses.


Hiring on the surface seems to be straight forward, but some practices can lead to bad hires. Discriminatory practices and unsuitable candidates are two potential risks.  It is important to follow well thought out practices and routines to ensure there are no discriminatory practices.  This includes crafting job descriptions to fit the needs of the role.  Making sure the screening of candidates is being completed in a fair manner.  Ensuring that hiring managers are not making promises that cannot or will not be honored.  Making sure all laws are being followed.  It is important to measure and collect data on all your candidates and hires; including source, interviewers, collect recruitment feedback surveys, etc. Use this collected data for an HR risk analysis.  Keep in mind discrimination can cost employers, lost time and productivity, decreased worker satisfaction, lawsuits, and fines.  

Hiring unsuitable candidates also pose a risk as well.  It is important to make sure recruiters, hiring managers, and human resource professionals are properly vetting candidates and verifying education and work histories. However, this also needs to be done in a quick fashion in order not to lose the right candidate from taking too long to hire someone.   If you hire an unqualified person that person could cause accidents, make costly errors, or jeopardize your company’s overall financial health.  It is important to measure your candidate’s skills and interview properly to ensure the candidate has the skills and experience you need.  If they do not, it is important to make sure they are professionally trained and monitored during a probationary period.  

Employee Supervision

Employee supervision is also a potential avenue of risk.  Some avenues of risk are potential abuse, toxic environments, and privacy issues.  To avoid potential hazards, it is important to measure and evaluate managers and supervisors. To measure and evaluate supervisors it is recommended using 360s and other assessments on a quarterly basis.  Poor management is the number one reason employees leave jobs.  Develop training and orientation programs for both supervisors and employees.  Use performance management systems for evaluations and task tracking.  Having inadequate supervision also poses risks as well, performance management systems assist with ensuring staff accountability for employees as well. 

Employee supervision will remain a potential risk factor if HR professionals inadequately collect data or fail to conduct timely and fair evaluations for employees and management. Using performance management systems improves accountability and helps identify risk factors in management and employee conduct before they become major issues.  However, if the data is not collected accurately or inconsistently the data would be unreliable.  It is important to have a trustworthy performance management system like beepHR. beepHR is built on blockchain technology with a powerful AI that tracks tasks, communication, and performance automatically from a single dashboard built for everyday use.  

Risk Management

Risk management can be difficult, but HR must be committed to mitigating risks at every level.  However, risk management is not just for the accounting and HR departments it is up to everyone in the organization to mitigate risks.  It is up to companies to establish a culture that embraces principles that promotes risk management.  Everyone has a role in risk management form the CEO to the entry-level employee. Collecting data, promoting communication, and employee engagement will lesson any potential risks and improve productivity and employee satisfaction.  

beepHR, a New HR Evaluation Tool for Everyday Use
"Since HR evaluations are only checked when setting and reviewing goals, employees tend to lose their sight of goals during their day-to-day operations. Often employees are working at cross purposes because they are not aware of their tasks linked to their goals."
beepHR allows employees to see how well they accomplished their goals, encourage their colleagues by sending “likes” and “thank you(s)” freely, while enabling them to keep track of their tasks. Getting in the habit of using a daily HR evaluation tool will help to make more accurate evaluations.
  • Manage targets such as qualitative, qualitative and OKR
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  • Talent management decisions using Data
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