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The relationship between risk management and human resource development management

Introduction:

The concept of human resources management has increased in the last years, not only as an ideology but also as a strategy to support an institution.

Modern management believes that the long-term success depends on the relationship between cadres and productivity.

The idea said that employees are supported by industry laws and trade unions activity should be reviewed to ensure continuity of the institution in the long term.

There are two trends of concepts conducted from the experience of human resources management:

  • The vision of human resources management that includes structured development and efficiency growth of individuals in the institution.
  • The vision oriented to a business that requires providing service and creating competition among employees.

These two concepts indicate that if something goes wrong, the individuals and institutions take responsibility, and this will cause loss. However, risk management came to prevent loss for both of them.

Risk management:

It is a process of measuring and evaluating risks and developing strategies to manage them. These strategies include transferring risks to another party, avoiding them, minimizing their negative effects, and accepting some or all of their consequences.

It is also defined as a management activity aimed to control risks and reduce them to acceptable levels. Or more accurately, it is a process of identifying, measuring, controlling and reducing the risks facing the company or institution.

Human resources risk management:

The risk management plan requires full consideration to many aspects. Thus, institutions should implement the risk management plan effectively.

In general, risk management means risk identification, valuation, and ranking in order of importance. If risk management is applied in the field of human resources, this means understanding the risks that face employees and their activities.

Risk forecasting, planning to reduce the likelihood of them to occur and finding risk mitigation solutions are the components of any risk management plan.

The main challenges of a sustainable institution are the risks of individuals, business and challenges, performance, and wages and how to manage all these risks.

Potential human resource risks

The most important risks related to individuals:

  • Risks related to the culture of the institution and misunderstanding of individuals because of their attitudes. They are sometimes negative reactions.
  • Behavioral risks of individuals through illegal matters that are incompatible with business ethics such as fraud, theft, complicity, exploitation of personal matters.
  • Not putting the right person in the right place.
  • Negative effect from the dismissal of qualified employees.
  • Non-compliance of individuals to applicable laws.
  • Employee turnover (affects the team/direct impact on the type of productivity of new employees).
  • Resignation of staff and failure to provide the required one.
  • Reducing the size of many available employees, new retirement and the negative risks associated with expanding employment.
  • Lack of planning of workforce and absence of clearly defined performance standards to measure and manage performance.
  • Lack of training and development to improve performance.
  • Financial abuse, discrimination practices and medical problems.
  • Absence of safety and health laws that meet the needs of employees.

Ways to manage risks:                       

  • Understand human resources management and personnel of risks and identify the risks that face human resources in particular.
  • Assess each type of risk and prioritize them.
  • Develop a strategy to avoid each risk and identify steps supposed to prevent them.
  • Motivate individuals to work, and focus on supporting the employee in agreed and planned tasks.
  • Create an adaptable workforce, not subject to traditional practices.
  • Correct the polarization and recruitment process in a positive way by replacing staff in the rotation or polarization process for whom they have been trained or increased the scientific competency.
  • How to plan human resources and respond quickly to labor policy changes by senior management.
  • Develop the employee’s skills by providing risk management courses and human resources management training courses in London, Dubai, or online.

Recommended article #1: Essentials to a successful Finance, Risk Management and Corporate Governance

Recommended article #2: Human Resource Management training courses in London | LPC Training

The reason of applying the risk management of human resources

Most institutions start developing a separate risk management plan because reaching strategic goals depends on individuals at first. It is likely to improve performance and provide better service and productivity.

Conclusion

The human element is the main source of to manage risk by working so that the risks of human resources threaten the continuity and sustainability of the institution, and therefore all staff must gain a correct understanding of the risk management methodology with a strategy that avoids making mistakes and helps to achieve the objectives.

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