Insight

Keeping on top of people risks

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People are a business’s greatest strength, but also present significant risks. Shortage of well-trained, motivated staff can severely impact business performance and the cost of replacing lost staff can run into thousands of pounds. Effectively managing people risks can aid recruitment and retention, boost staff morale and significantly improve productivity.

Importance of high-quality staff

Employing and retaining high quality staff is the hallmark of many successful businesses. People buy from people they like and your clients are likely to use your services because of the quality of your employees. Achieving excellence in people management requires focus and a commitment to putting your people at the heart of your organisation.

Consequences of poor people management 

The alternative, of course, is your business faces unacceptably low levels of staff productivity, high turnover and low morale. Poor people management practices can also lead to conflict and bad employee relations with the potential of staff attrition or costly employment tribunals. In addition, skills shortages will prevent your business from achieving its full potential.

Recruitment and recognition  

Think of the cost and time involved in recruiting and training just one member of staff and multiply this across your business. It will be easy to calculate the benefits of good people management

Reward is clearly critical in recruiting and retaining staff, but it is not the only factor to consider. People value good line management, personal recognition and a clear career progression as much, if not more than cash rewards.

Monitoring competitor salaries 

You can keep an eye on the salaries paid by your competitors by using commercially available salary and benefit surveys. This will help to ensure your rewards are not out of line with your competition.

Training and employee recognition 

Train your line managers to manage staff – its amazing how many businesses expect people to be able to manage staff without any guidance. Also, adopt employee recognition programmes, with clear appraisals and feedback and use talent maps to identify how people’s careers will develop and help you to identify your future senior leaders.

Career progression and succession planning

Giving people career progression is essential to their development, but also to the future success of your business. Develop and implement training programmes to upskill employees. In addition, ensure you have a clear succession plan in place for all senior roles. Suddenly being left with a gap in a critical role can expose a business to unacceptable risk.

Importance of ESG policies 

Nowadays, people increasingly want to work for responsible companies with clear Environmental, Social and Governance (ESG) policies which ensure business performance does not come at the expense of society or the environment. Not having effective ESG policies can make it more difficult to reward and retain quality staff.

Fair treatment and diversity

Equally, for many employees, fair treatment of colleagues with protected characteristics, such as gender, sexual orientation, ethnicity, diversity or disabilities are important factors in deciding whether to work for – and stay with a business. In addition, mishandling staff matters in relation to protected characteristics can expose your business to significant regulatory risk.

Valued Benefits 

Other staff value benefits such as flexible working, health and wellness programmes. Identify and focus on benefits employees most value rather than giving them benefits they do not care about.

Authenticity in social and ethical considerations

Unsurprisingly, people quickly see though businesses which only play lip-service to social and ethical considerations, so it is important for senior management to walk the talk if they want to build employee loyalty and trust.

Mitigating people management risks

You can mitigate people management risks by developing and using HR policies for performance management, conduct, employment disputes, protected characteristics and other areas.

Compliance with employment regulations

Keep on top of employment regulations such as taxation, human rights, modern slavery and employment law. These change over time and getting caught out can expose your business to expensive and time-consuming issues.

Technological risks

Technology also exposes your business to people risks. Have you thought about and planned for skills obsolescence as AI replaces people? There are also risks in relation to data privacy, intellectual property and cyber security.

Staff attitude surveys 

One good way to stay on top of how your staff are feeling is to undertake regular staff attitude surveys. But if you use them, do make sure you feedback and respond to the findings. People will quickly become cynical if they think their views are not being taken seriously.

Well managed and motivated people are a huge asset to your business, but it takes time, effort and commitment – without which you can expose your organisation to serious people-related risks. If you would like to discuss this topic further and understand the implications for your business, please don’t hesitate to contact the team.

Paul Gillett

Paul has 20 years’ experience securing Professional Indemnity insurance for his clients. He and his team support financial and construction professionals with insurance, risk mitigation, and claims management.