Why Is Human Risk Management Key for Your Business?

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What is Human Risk Management?

Human risk management, or HRM, is at its core the assessment of risks that the human element of your business can pose to its success. There are many angles to human risk management, as it pertains to carefully examining every aspect of your company that could be liable for human-related error, failure of criminality. One of the more common facets of risk management in recent years involves cyber-security, as an employee with poor training or lack of skill could result in your business losing crucial data, information or even money to phishing scams or other cyber-crimes. 

Other elements of human risk can occur via compliance – for example: HR departments inadvertently contravening employment law in the treatment of certain employees, landing legal action for your business; or technical supervisors lax on health and safety laws indirectly causing injury from a workplace incident.

What Kind of Business Needs to Be Successful with Human Risk Management?

Realistically, human risk management should be a real concern for every business. Automation is not yet a dominating factor in any industry bar certain corners of manufacturing, and even then human engineers are required to understand the machines and processes, as well as be able to repair the machines. The only other businesses which would not need to consider the impacts of human risk are those of sole traders who work alone; managing the risks they incur to their own work should be part and parcel of their work, and any failures purely affect their own income.

The Benefits of Successful Human Risk Management

Peace of mind is the key benefit to creating a human risk management program for your business. Identifying key weak points in your organisation, and applying requisite training, recruitment or adjustment initiatives is a preventative measure, enabling you to avoid future difficulty – whether financial, legal, medical or shareholder.

An excellent argument for this preventative approach lies in your financial department alone. Mismanagement of accounting, especially where tax and wages are concerned, can cause serious headaches for a business in audits and potential fraud cases resulting from inadvertent underpayment of tax. Retaining the use of a tax consultancy service may cost a little up front, but can unearth gaps in your systems and recommend human-oriented actions to close them.

Applying this approach to each corner of your business not only closes up any gaps in knowledge for your business’ future success, but can have a galvanising effect in the short term. With a qualified, skilled and well-trained team all working together, the synergy of your smoothly-operating business can increase moral and productivity in lockstep.

 

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