We usually think of HR helping to avoid employment-practice risks such as wage-and-hour claims, discrimination and harassment litigation, and wrongful termination lawsuits. Leave management, including ADA and FMLA, is another core area where HR reduces exposure. HR also plays a key role in broader enterprise risk management and in helping the company grow strategically.
To align HR with overall company risk controls, consider integrating HR strategy with your broader risk program; for an overview of enterprise-level approaches, see Risk Management Overview.
Other HR risk areas
- Workers compensation -- Insurance carriers finance claims, so a single comp claim can raise your experience modifier ("mod") and increase costs over several years. That makes early and appropriate return-to-work programs critical. Has HR helped develop a comprehensive return-to-work plan?
- Cyber liability -- Employee practices can create system vulnerabilities. HR should coordinate with IT and security on onboarding, termination procedures, mobile device returns, password controls, and protection of trade secrets to limit exposure.
- Social media -- Social media risk is growing. HR should clarify account ownership, set social media guidelines, and have a plan for responding to damaging or inappropriate employee postings.
- Privacy exposures -- Employee and applicant records (medical, Social Security, financial data) create privacy obligations; HR must limit access and follow secure handling practices.
- Disaster planning -- Natural disasters and extreme weather can disrupt operations. HR should contribute to business continuity and employee communication plans so the business can recover.
- Employee benefits -- With ERISA-related claims and evolving benefits design, HR needs processes to manage vendor oversight, enrollment accuracy, and compliance.
Perhaps the greatest opportunity for HR is helping the company grow by advising on workforce needs, skills, and organizational design. At smaller companies one HR leader may be expected to wear many hats; in those cases it can help to work with outside professionals. For HR-specific services and support options, see Human Resource Consulting Services Insurance.
If you'd like help implementing these steps or reviewing your programs, ask an agent to discuss options and resources.
Frequently Asked Questions
How can HR reduce workers' compensation costs?
HR can reduce costs by creating a return-to-work program, improving safety training, documenting incidents promptly, and coordinating with carriers to manage claims.
What should HR do when an employee is terminated to limit cyber risk?
HR should coordinate with IT to disable accounts, retrieve devices and badges, change shared passwords, and secure any confidential information the employee accessed.
Are social media policies enforceable?
Clear, consistently applied social media policies help set expectations and are more defensible; HR should align policies with applicable employment laws and include examples.
When should a company bring in outside HR consultants?
Consider outside consultants when internal capacity is limited, during major organizational change, or when specialized compliance or benefits expertise is needed.