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The ABC of Risk Management
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Risks to your business can arise for many reasons - interest rate or price increases, your competitors’ activities, injuries through hazards in the workplace, skilled staff leaving, natural disasters or terrorist activities. Managing those risks is an important part of running your business.
Risk management is a systematic process of making a realistic evaluation of the true level of risks to your business.
Before risks can be properly managed they need to be identified - you can begin with these questions:
- What can go wrong?
- What can we do to prevent it?
- What do we do if it happens?
A good plan is to develop a risk register to document each potential problem, its level of seriousness, what is required to fix it and who will fix the problem.
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Risk Management Planning
Thein an organisation are associated with human capital issues. The following provides a guide to managing risks.
Risk Identification
Risk can be spotted by using a combination of brainstorming and reviewing a standard risk list. Risks should be defined in two parts. The first is the cause of the situation (Vendor not meeting deadline, Business users not available, etc.).
The second part is the impact (Budget will be exceeded, Milestones not achieved, etc.). Hence a risk might be defined as "The vendor not meeting deadline will mean that budget will be exceeded". If this format is used, it is easy to remove duplicates, and understand the risk.
Risk Quantification
Risks need to be quantified in two dimensions. The impact of the risk needs to be assessed. The probability of the risk occurring needs to be assessed and given a rating on a 1 to 4 scale. The larger the number, the larger the impact or probability..
Risk Response
Some common responses to risk are:
- Avoid the risk. Do something to remove it.
- Transfer the risk. Make someone else responsible.
- Mitigate the risk. Take actions to lessen the impact or chance of the risk occurring. If the risk relates to availability of resources, draw up an agreement and get sign-off for the resource to be available.
- Accept the risk. The risk might be so small the effort to do anything is not worth while.
A risk response plan should include the strategy and action items to address the strategy. The actions should include what needs to be done, who is doing it, and when it should be completed.
Risk Control
The final step is to monitor risks to identify any change in the status, or if they turn into an issue. It is best to hold regular risk reviews to identify actions outstanding, risk probability and impact, remove risks that have passed, and identify new risks.
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‘Open Work’ Business Model – Tomorrow’s Flexible Solution
There are a number of converging forces that are changing our work styles and needs, our market place to one that is global and complex, remote workforces, a growing desire for flexibility and establishing a talent mindset versus a talent management program.
Moving beyond a work environment developed for the industrial age, and adopting a flexible approach in order to yield maximum results, is the focus of the business of tomorrow. An ‘open work’ system.
A mix of full time assigned workers who use a company provided and dedicated workplace; flexible workers who work both in the office and off site, and home assigned workers, who put in 3-5 days per week with company provisioning support, is the model for tomorrow.
These categories of workers all operate exclusively using specific work/management practices under specific engagement agreements.
One of the solutions to building these types of new businesses is to incorporate flexible workforce management and contracting services into the corporate HR systems and processes. Freelance provides a suite of products and services that can help manage the global perspective, create greater workforce productivity, reduce overheads and increase corporate and individual benefit
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Costing Employer Corporate Overheads
Corporate overheads are essentially internal infrastructure costs associated with supporting an organisation in delivering core services. They include the following functions:
- Governance and executive services
- Asset and facilities management
- Financial management
- Human resources management
- Records and information management
- Information technology and communications
- Office services and procedures
- Legal services
Costing corporate overheads is complex because a job or a position may only partially involve a corporate overheads function.
Freelance provides direct management of all services associated with the role of contractors as part of the corporate human resources management function. Our involvement includes contract negotiation, all back office administration including payroll, full compliance for all taxation, insurance and financial legislation requirements and general risk management.
Our expertise across industrial relations, workforce assessment and contractor and payroll management ultimately ensures we not only deliver the best workforce management solutions but guarantees total compliance and corporate governance