HR’s Role in Risk Management – Sometimes it’s simply get out of the way!

Posted By | 2017-11-01T16:39:21+00:00 September 1st, 2016|Employers|

In 20 years of practicing HR, I have learned a few things and seen a few things… Some things have made me very proud of my profession while others make me a little curious as to why some HR professionals act the way they do.

Take for example, HR’s Role in Risk Management… Most HR professionals know that we play a crucial role in identifying risks and then formulating risk mitigation strategies.  These strategies are to either eliminate the risk or at the very least identify it.  Now, most of the time, accountants will line up saying that this is their role and it is a challenge they would be happy to assume on their own.  However, in actuality it’s a collective role with HR because there are critical controls that are needed when you want to address risk both financially as well as from a people perspective.

What I find fascinating about the role of HR in identifying risk and then formulating a risk mitigation strategy is the number of times that I have seen HR insert itself into the solution.  Take for example, an HR software program designed to help an organization from a recruitment or talent management and costing analysis perspective.

Kudos to you, HR team, on identifying the risk or issue that we are trying to solve for the organization! But it does not mean this is an opportunity for HR to try to add value by attempting to do the process themselves.  It is not the time to think “we can build that in house”. Or to have the mentality that “if we rely on a third party, what will the executive think about us not fulfilling the role ourselves?”  HR teams sometimes seem to feel that by relying on a third party service or product, there will be an unwelcome perception within the organization that HR doesn’t know how to recruit, or manage people, or recognize the costs incurred for each.

When this mindset takes hold, the HR approach to mitigating the risk is to become the barrier.  It troubles me each time I talk to people in those companies that have a product or service that can help an organization and they roll their eyes when someone says, you need to talk to HR.  When I worked in HR, I once had a boss tell me that if I couldn’t get past my reluctance to see the solution and that it will cost some money, that I was the barrier to the business making money.  The example was simple, pay $200,000 for a recruitment firm to bring us the right people to make the company $1M dollars a day or have the multimillion dollar equipment sitting idle.  Simple really.  I learned a great lesson there which I hope to pass on to other HR professionals.

The HR team are not engineers that want to build it better or IT that can rework and code a better system.  Sometimes we are simply the shepherds of bringing in the right solution. That is an important role for HR in risk management as our roles continue to evolve in organizations.