Top 3 Strategic Risks in Human Resources

Written By

O'Ryan Hughes

Date

February 2019

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Written By

O'Ryan Hughes

Date

February 2019

Share

Typically the focus of human resources in many organizations is on the administrative and functional aspects of managing people.  This type of focus puts emphasis on efficiency rather than effectiveness.  If an organization wants to leverage their workforce as an asset for competitive advantage a more strategic approach should be taken.  Assessment of risk is a key component of strategic planning.  The following is a list of the top three strategic risks for organizations in relation to human resources.

1. Succession Planning

Ask yourself, who are the most critical people within my organization?  Now ask yourself, what do we do if these people are no longer with the organization?  Who will take their place; are they trained to step in immediately; who will backfill the roles behind them?  A clear plan should be in place for each key person within an organization. A failure to be prepared for these types of change can lead to potentially significant loss. A comprehensive succession plan can help mitigate this risk.

2. Performance Management

Most organizations do some form of periodic appraisal of their employees.  These processes are typically done on a yearly basis before raises are given.  This process is generally an unpleasant, ineffective, backward-looking administrative process that leaves employees true potential untapped.  The risk is wasting human capital with an ineffective process.

 A different approach that extracts more value from employees is a performance management process that looks to not only recognize performance but also help an employee continuously improve.  Taking a forward-looking approach with an emphasis on an employee’s development can help to achieve maximum value for an organization.

3. Measuring HR

What gets measured gets done, right? So why does HR get missed on the KPI dashboard? Measuring HR’s effectiveness is not easy, but it can be done.  Many organizations use the Net-promoter Score as an evaluator of their customer’s experience.  This same process can be done internally to measure how likely a current employee would recommend working within the same organization.  This is just one example of measuring HR’s effectiveness. Strategically HR should be viewed as a value-add; therefore, it should be measured.

 

O’Ryan Hughes, M.B.A.

Managing Partner

Stoppler Hughes

www.stopplerhughes.com