Human Resources Risk Management Robert A. Milligan Cornell University

People Determine the Attitude of the Business Toward Risk Risk is bad and must be minimized OR The business must be managed to thrive in a time of increasing change The decision to view risk as threat or opportunity is a choice the people in the business must make

Dimensions of Human Resources in the Farm Business Family and nonfamily Management and labor Full-time and part-time Seasonal and year around

The Human Dimension is Increasingly Crucial Increasingly technical production processes Increasing competitiveness Increasing role of interpersonal skills and employees Increasing importance of environmental responsibility and food safety

Dual role Source of risk Resource to mitigate, manage and prosper from risk.

Sources of Human Resource Risk

Human Resource Calamities Tragedies -- accidental death, illness, injury to owners Can undo even the most carefully planned risk management decisions

Management Succession Every business eventually has different managers A significant source of risk Family member career decisions have huge impacts Human resource considerations should drive succession

Owner/Managers Management Capability Increasingly broad job description of a manager Competitiveness makes each decision more crucial

Labor markets Image of agricultural employment “Special” labor legislation Local labor markets conditions

Sources of Human Resource Risk Human Resource Calamities Management Succession Owner/Managers Management Capability Labor markets

Resource to Mitigate, Manage and Prosper from Risk

View Risk as an Opportunity to be Managed Manage to thrive in a period of increasing change Look for opportunities presented by risk and change Involves seeking, analyzing and implementing risk-reducing strategies Crucial to have an attitude of optimism and hope

Managers Must Understand Risk Identify those risks that can severely damage or ruin the business Must insure against or have a plan for these risks Insure against or manage risk that put the business at risk -- Do not bet the farm

Source: J. Edward Russon, Johnson Graduate School of Management, Cornell University.

Managers must Understand Decision-Making Not all good decisions result in the most favorable outcome A bad outcome does not does not mean the decision was wrong Must analyze and learn from ALL decisions Must learn from unfavorable outcomes rather than get discouraged

Everyone Is Committed to the Business Everyone is passionate about the business Great job satisfaction is integral to high productivity Structures and systems are in alignment with the business purpose Use modern management practices People are valued by the business leadership and the business culture.

Training Establish a continuous improvement culture Never allow an untrained person to do any task!!!!!! Major source of risk reduction Understanding of risk, risk management, change and change management is necessary

Recruit and Select the Best Qualified People A challenge because agriculture does not have a favorable image as an employer Must compensate highly skilled and motivated employees Takes time to recruit hire, train and develop excellent people.

Resource to Mitigate, Manage and Prosper from Risk View Risk as an Opportunity Managers Must Understand Risk Understand Decision-Making Everyone Is Committed to the Business Training Recruit and Select the Best Qualified People

Conclusion People must be viewed as the resource to manage, mitigate and prosper form risk including human resource risk The decision to view risk as threat or opportunity is a choice the people in the business must make The business must be managed to thrive in a time of increasing risk and change