The primary role of human resources in risk management focuses on employment practices: avoiding wage-and-hour claims, discrimination and harassment litigation, and wrongful termination lawsuits. Leave management — including ADA and FMLA — is also a major HR responsibility.
Human relations can play a key role in other aspects of managing risk for your business; for a broader perspective see Risk Management Overview.
Other risk areas
- Workers Compensation - Insurance companies don't pay claims, they finance them. When you suffer a Comp claim, your experience modifier ("mod") increases to repay the claim during a three-year period at a high interest rate, so you should do everything possible to get employees returned to work.
- Cyber Liability - Poor employee practices can leave your information systems vulnerable. Coordinate your HR department with IT to make sure new employees receive proper security orientation and that terminated employees are managed effectively.
- Social Media - Risks from social media are expanding every day. HR should make it clear who owns your company Twitter account, set social media guidelines, and know how to respond to any perceived risks.
- Privacy Exposures - Whether it's medical records (HIPAA), Social Security information, or financial information, employees can both generate exposures and be subject to them.
- Disaster Planning - One disaster can wipe out your company overnight. HR can help develop a plan to protect you in the aftermath of a disaster.
- Employee Benefits - With a growing number of ERISA claims and a rapidly changing benefits landscape, HR should be responsible for staying on top of these trends.
Perhaps the greatest risk HR can help with involves growing your business. HR professionals can provide strategic advice about what is needed for growth and how best to move forward.
Because it can be difficult to wear all these HR hats, we'd be happy to offer you our professional advice; learn more at Human Resource Consulting Services Insurance or talk to an agent.
Frequently Asked Questions
What employment risks should HR prioritize?
HR should prioritize wage-and-hour compliance, discrimination and harassment prevention, proper leave administration, and clear policies that reduce legal exposure.
How can HR help reduce workers' compensation costs?
HR can implement return-to-work programs, coordinate with safety and claims managers, and ensure timely reporting and workplace accommodations to limit long-term claims.
Should HR be involved in cyber security policies?
Yes. HR and IT should coordinate on onboarding, access control, termination procedures, and employee training to reduce cyber liability from human error.