The risks of getting HR wrong

Moira Grassick - Chief Operating Officer

May 19 2023

First Published: May 18th 2023
Last updated May 18th 2023

It’s a cliché but I’ll repeat it, a business is only as successful as its employees.

People are both the most important asset a business has and on the other hand a source of risk if they’re not properly managed.

After a stressful number of years in which health and wellbeing were primary concerns for everyone, the workplace has changed irreversibly and it’s up to business owners to adapt to ensure their people stay happy and in turn deliver business growth.

Some business risks are outside the control of Irish employers. Global geo-political tensions and interest rates continue to impact the cost of doing business but when it comes to your people, it’s different. HR risks are within your control.

With International HR Day falling tomorrow, I’m taking this opportunity to examine some common HR issues faced by business owners and how they can minimise their exposure to these risks:

  1. Stress and burnout: after a challenging number of years, your employees may be suffering from anxiety, stress, or burnout symptoms. These psychosocial issues can have a direct impact on productivity and potentially on the reputation of your business. Employees are more focused than ever on work-life balance and wellbeing. Taking steps to help employees achieve their goals in these areas helps reduce errors, minimise staff turnover and avoid dips in productivity.
  2. Remote health & safety risks: a remote worker’s home workstation is an extension of the workplace and employers need to consider their health & safety obligations in this regard. A risk assessment of the employee’s home workspace should be carried out. The main responsibility for health & safety at work rests with the employer regardless of whether an employee works remotely or onsite. Work-related injuries (both physical and psychosocial), whether they happen onsite or in a remote location could lead to penalties, brand damage and a deterioration in employee relations.
  3. Recruitment and retention: although the labour market shows recent signs of turning back in favour of employers, it’s crucial for business owners to figure out what will help staff build long-term careers with them. High staff turnover is bad for business so engaging with employees and responding to their feedback on what could help them build a long-term future with you will pay dividends.
  4. Workplace culture: serious misconduct like bullying and harassment or theft and fraud can derail a business. It’s vital to manage these risks through the effective operation of appropriate policies and procedures. Staff should be aware of the values they are expected to uphold. Likewise, if employers don’t deal with grievances in the correct manner, they risk demoralising staff who won’t want to work within an uncaring culture. Preventing grievances in the first place should be the aim but failing to manage employee grievances properly will distract your management team from their main tasks, demotivate staff who think colleagues have not received fair treatment and ultimately hurt your business.
  5. Diversity and inclusion: as the Irish population continues to diversify, it’s important to develop an inclusive and diverse working environment. Failing to address this area of HR will limit your access to the broadest possible talent pool and potentially have reputational consequences that hurt relationships with employees, customers and other stakeholders.
  6. Legal and compliance: as well as the challenge of managing the transition away from pandemic-related work practices, employers also have a wide range of new employment laws to consider. The statutory sick pay scheme came into force in January and affects all employers. The transparent and predictable working conditions regulations impact probation periods and employment contracts and documentation. Most recently, a variety of new work-life balance rights including the right to request remote work will soon need to be acted upon by employers. It’s a major challenge for employers and employment law practitioners to keep pace with the volume of recent employment regulations.

The costs of ineffective HR risk management

The costs associated with getting any of these HR risks wrong are multiple. Management spend too much time firefighting, employees take their talents elsewhere and ultimately the bottom line suffers.

With the right approach however, business owners can turn all these HR risks into strengths that will make their business more resilient to setbacks and more productive when trade is brisk.

I look forward to continuing to help Irish SMEs maximise their potential by giving them the benefit of our expert HR and health & safety advice in both the good times and the bad.

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