Reducing Risk: Going Beyond Compliance to Business Success
Alex Margolin| Nov 01, 2017
Risk in the human capital management space can take on a variety of shapes. In most cases, it’s referred to in the context of compliance and regulation, but there are also other relevant risks that employers need to understand in order to create positive, engaging workplaces. That’s not to say that risk in the workforce management, payroll, and talent management areas aren’t relevant, just that business leaders need to consider the subject more holistically to make better decisions and arrive at better outcomes.
Outlining the Five Risk Areas
Mollie Lombardi, Co-Founder at Aptitude Research Partners, considers these five key risks pertinent to today’s HR and business leaders:
- Capability Risk:Understanding the skills and capabilities within the organization, and how well they are aligned to business need.
- Capacity Risk:Putting in place the right succession and talent acquisition plans to ensure there is enough volume of talent to support business strategy.
- Cost Risk:Understanding the compensation models and managing the cost of recruiting and retaining the workforce required.
- Connection Risk:Risks around engagement and performance, and how well your organization can share talent.
- Compliance Risk:The very real financial and legal risks associated with noncompliance with union rules, federal, state and local laws, and other regulations.
With them clearly outlined, each of us can understand the role that these various risks play in today’s business environment. However, the concern for many leaders is in how to address these risks in a way that is proactive and informed, not reactive and off-balance. By putting a few key pieces in place, employers can face and overcome risk in a powerful way.
Addressing Workforce Risk
Ask any business leader where their biggest value is, and they’ll say it’s the people. However, if you ask that same audience where the biggest risk is, it also lies with the people. Each of the five risks touches on some aspect of hiring, managing, and engaging employees.
While it’s true that your workforce has the capability to create immense value for customers, it’s also a fact that the risks examined above are not insignificant, especially for those businesses operating in a global capacity. In order to address and mitigate workforce risk, employers need a few things in place:
The Right People
By finding and hiring the global talent that aligns with your values, you can create an environment where people can succeed regardless of distractions or obstacles. Additionally, with today’s globalized workforce, you can find amazing workers around the globe with ease.
The Right Technology
By leveraging the right technology to hire, onboard, and manage your workforce, you ensure that you are never at risk of compliance with regard to payroll issues. Additionally, the right technology will provide the right balance of transparency and connectivity as a foundation for scaling a great workplace culture.
The Right Execution
Just having the right technology and the right people isn’t enough. To truly succeed, employers also need to have the right strategy for execution. Putting the elements together in a way that is compliant ensures that costly regulations and fines don’t trip up the business just as it’s hitting its stride.
The question to ask yourself is this: which of these areas does your business truly need to focus on? Is it the people, the technology, or the execution? Once you have these pieces of your strategy in place, you can reduce risk across the board, preparing your business for ultimate success and growth. For those interested in delving deeper into research on global workforce risks, the 2017 Papaya Global HR Practices report explores this concept more fully.