1. RISK MANAGEMENT AND INSURANCE
TOPIC 9
HUMAN RESOURCE MANAGEMENT RISKS

2. Introduction
 There is a ruthless and increasing competition in all economic sectors.
Quality became important for competitiveness, specially in the service firms.
Quality is a fundamental factor in increasing the competitiveness and realizing the goals and performances of firms operating in the service industries.

3. Why Do we Study HR Risks?
In the last decade, RM has emerged and progressed rapidly in business management field.
The scholars were focusing on identifying a missing link in RM field, which is the human link.
This is why the scholars study the role of human in the organizational risk issues – HR Risks.

4. What is HR Risk?
HR risks are happenings that prevent employees from fulfilling their responsibilities upon the organization’s goal fulfilment. (Maria I. Marshall, Corinne Alexander, 2009).
Young & Hexter, (2011), defined “Human Capital Risk” as: The uncertainty arising from changes in a wide range of workforce and people management issues that affect a company’s ability to meet its strategic and operating objectives.
The term “HR Risk” is also referred as “Human Capital Risk” and “talent risk” since firms deal with identifying and mitigating these risks within their talent management strategies.

5. Negative Outcomes of HR Risks
Lack of suitable HR risk management, in addition to other factors in business, leads to poor governance, poor service quality and poor competitiveness of organizations.
HR risks can threaten a project and part or whole of an organization,
Failure to manage HR risks may threaten the sustainability of organizations.
Therefore, people are key for attaining organisations’ objectives and goals.

6. What is HR Risk Mangement?
National Standard on HR risk management, (Marius Meyer, C.E.O of SABPP, 2015) defined Human resource risk management as;
“HR Risk Management is a systematic approach of identifying and
addressing people factors (uncertainties and opportunities) that can
either have a positive or negative effect on the realisation of the
objectives of an organisation.”
HR risk management concentrates on identifying, evaluating and mitigating risk situations before threatening the plans and impeding a part of or the whole organization (Maria TĂTĂRUSANU, 2009).

7. Significance of HR Risks

8. General List of HR Activities and Potential HR Risks

9. Examples of Human Risks

10. Potential HR Risks According to Marshall and Alexander,(2009)
Item No
Potential HR Risk 1
Death 2
Disability (temporary or permanent) 3
Divorce 4
Management Error or Incompetence 5
Unexpected Temporary Leave 6
Poor Employee Management Practices 7
Employee Turnover
Source: Marshall and Alexander,(2009)