Role of HRD in Risk Management

These days, the importance of Human Resource Management can not be neglected especially when companies are operating in such a volatile and unstable environment. The department plays a vital role in risk management. Needless to say, handling people is one of the most difficult tasks in the world and human resource department of any company has to handle them and other related issues every now and then. Risk Management is not only about controlling or reducing the negative effects of physical and financial threats to the organization. Rather it also includes handling and controlling the risk arising from shortage of employees, their refusal to work and many other issues.

It’s human capital who can make or break the organization. It can take it to new heights or can weaken it. It is, therefore, very challenging to handle and manage the risk resulting from people of the organization. It is only human resource that helps management in dealing with risk. The situation would be worst if they themselves become a risk factor. People use their skills and intellect to solve expected or unexpected problems. But what if when they themselves become the greatest source of risk or other problems? This is when HRD plays a key role. Let’s discuss what Human Resource Department of any organization can go the extra mile to manage risk.

Human Resource Management is not only about making policies for the organization. In today’s unpredictable environment, it is certainly the indispensable part of an organization. The major function of HRD is to get the job done from employees and that too ensuring the interest of both the parties - management and employees. Managing the labor, handling their issues, proper and regular supply of human capital, motivating employees to perform their task in a better way, avoiding unnecessary conflicts and using people to handle risk are what HRD is supposed to do.

When we talk about HR related risks, the subject includes problems related to recruitment and retention, adjusting skill-confidence level of employees, stress management, maintaining industrial relations and many more. All these risks can threaten the smooth working of an organization. HRD and risk management are inter-related as they both deal with expected and unexpected problems arising in any organization.

Risk management plans are specially developed and implemented to manage the risk and reducing its negative effect on the organization. It may or may not be a part of HRD. If the company is facing financial or physical threats, the risk management may not be a part of human resource department. But if it is related to people, industrial relations, conflict management and stress management, it is definitely a part of HRD. It always deals with crisis of human resources of the company. Recruiting, training and retaining people are the major issues that need to be addressed timely.

HRD also has to deal with people calamities such as accidental death of an employee, temporary or permanent paralysis, constructional accidents, labor discrimination, etc. Like other risk management plans, plans and programs developed for handling HR issues are not free from problems. They also have some flaws that need to be addressed by HR managers as and when required.


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