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Where Human Capital Management and Risk Management Align


February 7, 2019 – Having the right people in the right role is critical to the success of your business enterprise, and your human resource (HR) representative or department plays a vital role in the investment and placement of human capital. Why? Because the people factor is the driver of your business. Moreover, people are an organization’s most critical asset.  If we care about the sustainability of our organizations, we must care about the people who make it sustainable.


Your HR department has a bird’s eye view of the labor force needed to achieve the organization’s goals and objectives successfully, and can aid in developing taskforces. Unnecessary frustrations and risks have the potential to emerge when human capital management and HR team members are isolated from an organization’s decision-making process, because the element of human influence is omitted.


Human Resource departments are generally defined by six main components; recruitment, employee relations, benefits and compensation, training and development, labor law compliance, and job safety. Let’s take a closer look at the interface of human capital management and risk management within these components beginning with recruitment.



The success of a recruiter is contingent on their ability to find candidates who fit your organization’s established culture. One of the best means of achieving this task is asking the right questions during the interview process. The candidates’ responses will give the recruiter insight on how well of a fit the candidate will be. By the conclusion of the interview, the recruiter will know if the role will keep the candidate engaged in their essential job functions and if they have the capacity to expand it beyond its present state. If the role limits innovation, the candidate has the potential to become disengaged, which can result in them becoming a distracted employee. A disengaged and distracted employee is more susceptible to making mistakes or incurring a work related injury.


Employee Relations

Employee relations is a HR discipline used to strengthen the employer-employee relationship through the resolution of workplace issues, providing insight on performance management systems, and measuring employee morale and satisfaction. Workplace issues can range from discriminatory allegations to the working conditions of the organization. Organizations need to ensure the HR professionals in charge of handling internal investigations, and mediating employee complaints, are well versed in employment law practices. Additionally, having a good rapport within the workforce and being viewed as a trusted resource are also critical components of the HR department. Your workforce is more likely to voice their concerns to a HR department they feel hears and values them as employees.


Training and Development

Training and development programs arm your workforce with the tools necessary for their success. This method of training exceeds the onboarding process as it includes ongoing professional development. Frontline supervisors are the champions of this process as they have a true pulse on the individual needs of their direct reports. Frontline supervisors can schedule job specific trainings, certifying proper use of company equipment, resulting in increased workplace safety. Additionally, frontline supervisors can assign training paths aligned with the long-term career goals of their direct reports. All of which aid in keeping the workforce engaged, and employee morale high.


Labor Law Compliance

Job safety and labor law compliance are two variables your organization has to keep at the forefront of its initiatives. Noncompliance may result in complaints from employees about their working conditions and unfair employment practices that will ultimately affect profitability and productivity. Anchoring your safely program(s) with a commitment to doing what is right will render different results than solely basing it on regulatory compliance. You can have all of the elements of a world-class safety program (i.e. policies and procedures, reports, training, audits, hazard assessments, injury investigations, management involvement, KPI’s and goals, etc.) in place, but if you do not have the right safety culture in place, your outcome will be suboptimal.


The HR staff must remain current on Fair Labor Standards Act, Title VII of the Civil Rights, and the National Labor Relations Act provisions and hold the organization to their standards. Hosting annual employee and managerial trainings on the applicable subjects helps to increase awareness, which lessens likelihood of possible infractions.


Job Safety

Organizations that prioritize job safety cultivate a safety culture. When establishing your organization’s safety culture it is encouraged to let your workforce know how valuable they are, solicit their input on best practices, share stories to support the culture’s “why,” and always remember to treat your workforce like people. Workplace injuries should be addressed immediately with careful consideration of those involved. Moreover, the injured worker shouldn’t be made to feel like a letdown or a claim’s number in queue.



IBTX understands the importance of intertwining human capital and risk management together. Our Risk Management team can be used to conduct a gap analysis, and executive and managerial trainings highlighting the points of intersection of human capital and possible risks. As we noted early, your most critical assets are your people. Your safety plan, productivity and profitability are all dependent on the capacity of our workforce. Contact us today as we’d love the opportunity to work alongside your leadership to align your goals/objectives with your workforce to optimize the success of your business model.

Posted by in Blog, Human Resources, Property & Casualty, Safety

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