This article has been written by Tejashree Solanki pursuing a Personal Branding Program for Corporate Leaders from Skill Arbitrage.

This article has been edited and published by Shashwat Kaushik.

Introduction

Human resources are the most important function in any organisation. Employees, workforce, manpower, labour, and personnel are the main characters in the development of any organisation as soon as business operations commence. However, there are certain risks involved in the motivated functioning of these resources. There are several factors that might affect it, starting from recruitment to the time the resource is released. The resources need some kind of motivation in order to be productive, which helps in the business profitability and scaling of operations. Human resource risk management and productivity go hand in hand. Managing human resource risks for increased productivity becomes crucial for any business organisation.

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What is HR risk management

HR risk management plays a pivotal role in the business operations of any organisation. Due to the evolving nature of business operations and diverse workforce, there is an increasing demand for HR risk management in any organisation. Risk management in HR starts at the very beginning of running any business. In today’s evolving times, employees pose a huge risk to  the operations of the company. Analysing risks and preventing their occurrence are the major roles of human resource management. Risk management is a structured framework to mitigate risks aimed at achieving organisational goals. It helps in increasing management efficiency to prevent or minimise risks by reducing operational costs and increasing productivity, which increases company profits and helps in company success.

What is productivity

In simple language, productivity is the amount of work done by any employee in any business setup. It is the output generated by an employee by working a number of hours in an organisation. Productivity depends on the number of factors that can relate to an employee’s behaviour. Employees must be motivated to be more accountable and responsible in order to take proactive ownership, which will increase employee productivity. The productivity of an employee is directly proportional to the profits of any business. Any business depends on how much the employee is willing to work for it to run smoothly. Inversely, less productivity is the effect of the employees will to work. Demotivated employees tend to work less as compared to motivated employees.

Factors affecting productivity

Talent acquisition

Talent acquisition is a methodological approach that helps in identifying, hiring and recruiting people to achieve long term organisational goals. Acquiring the right employee is of utmost importance for any organisation. Recruitment is the process of identifying, screening, interviewing, selecting, hiring and onboarding candidates to achieve organisational goals. Modern talent acquisition encompasses both the process of hiring and the strategies that elevate hiring outcomes. Attracting the right candidates. Building a strong employer brand, creating a positive candidate experience. Identifying the most important skills and selecting candidates accordingly. Failing to source the right candidate can affect productivity as the candidate may leave the company in the short term or failing to analyse the right skills can result in less productivity as the candidate may have to be trained, which results in a loss of time and effort.

Work culture

Work culture can largely  affect the productivity of an employee. It is like the health of the company. A motivated, independent work culture can make employees take ownership and responsibilities in any organisation. Negative work causes increased turnover, lack of clarity, office gossip, absence of core values, etc., affecting the productivity of the organisation as a whole. Making it a conducive organisation to work with where the employee can be heard can boost the morale of the employee. Work culture should boost accountability, responsibility and ownership at any given instance in order to maximise employee productivity. Transparency among the teams and the management can help the employees take ownership and result in a more productive workforce.  

Work environment

The work environment is specifically the physical space where the employee performs their duties on a daily basis. A work environment is a combination of following: Physical environment, social and cultural aspects. The office layout and amenities like desk space, lighting, location, temperature, cafeteria, cleanliness, concierge, restrooms and many more are included in the physical environment. A positive physical environment can help improve employee wellbeing, job satisfaction, mental health and productivity. Cultural and social aspects include DEI, building meaningful relationships with colleagues, making employees feel like family and aligning employee behaviour with company values. Company values must be a part of everyday behaviour. Careful nurturing of people of different ages, races, ethnicities, abilities, disabilities, genders, religions, cultures, and sexual orientations will help build a trusted bond between teams and create a sense of respect, collaboration and trust, which will help increase productivity.

Compensation

In simple terms, compensation is the monetary benefit offered to any employee in exchange for their services. In today’s dynamic market, the compensation provided to employees must be competitive. Formulating a compensation strategy is an important activity for all organisations, including startups. Employee productivity is increased by offering lucrative financial benefits to  employees. However, the compensation strategy must be affordable, structured, and reasonably competitive in alignment with the company’s goals. Providing direct and indirect compensation like competitive salaries, annual incentives, ESOPs, child care, health insurance, retirement contributions, paid time off, etc. can boost enthusiasm in employees, which will contribute to a more productive workforce.

Prospective growth

An employee joining any organisation will have aspirations of professional growth, both financially and career wise. With a compensation strategy in place, the organisation should also encourage career growth among employees. This will help to attain job satisfaction, which will enhance productivity. Companies can provide mentorship programmes for the growth and development of their employees. Learning new tasks can help in developing new skills, which will help the employees contribute to new projects. Organisations can conduct leadership development programmes, regular training programmes, career development services, give tuition reimbursements or delegate additional responsibilities to employees. This will foster a sense of belonging and increase productivity.

Leadership

Management practices: Leadership practices across organisations have always made news throughout the history of mankind. Great leadership and management practices have consistently yielded rewards. Organisations should carefully nurture good leaders and set best management practices in line with the goals of the company to boost employee productivity. Positive leadership practices like respecting employee perspective, delegating authority, creating a collaborative vision to attain company goals, clear communication, flexibility, and providing training and guidance can maximise output, enhancing productivity

Company processes

Company processes are a set of collective tasks and activities performed by people to achieve business goals. A well curated and flexible process can ensure an enhanced work rate and increase productivity to achieve targets. Clear communication between teams and an easy approval method can enhance efficiency in the tasks performed by the employees, contributing to favourable results and reaching milestones.

Work life balance

Work life balance has significantly gained momentum in the past decade. Keeping employees happy and engaged is a challenge for all organisations. Happy workplaces attract good employees. Oxford Economic suggests, “Replacing an employee costs on average around £30,000 and it takes up to 28 weeks to get them up to speed.” Hence, it is crucial for organisations to keep their existing employees stress-free in order to retain them. A healthy work-life balance enhances work productivity and takes care of the mental wellbeing of an employee outside of work. Organisations can offer balanced work hours to improve employees mental health and boost productivity. Organisations can roll out offers like a more flexible workplace by providing an opportunity to work from home or gym options on the company premises for long hours of work, having a flexible leave policy that can help employees have a healthy work life balance, and taking ownership of the fulfilment of tasks, resulting in greater productivity.

Mergers and takeovers

Mergers and takeovers can affect the productivity of employees in many ways. Employees can feel stressed and uncertain about their future roles. This can lead to decreased productivity. Mergers can often bring together employees of different organisational cultures, which can result in conflicts and misunderstandings, resulting in less productivity. Work flow is disrupted as mergers can cause realignment of teams, changes in processes and so on, affecting productivity. A change in leadership may lead to a shift in priorities, communication styles and management approaches, leading to dynamic productivity. Employees tend to leave organisations in such cases, which will lead to losing out on the best talent, creating a negative impact on productivity.

HR interventions in HR risk management

HR plays a very crucial role in boosting productivity of the employees in any organisation. HR intervention in the above factors affecting productivity can help in mitigating or avoiding them. Strategic planning to identify HR risks, access them and prioritise the action plan is crucial. Talent forecasting, prioritising niche skills, considering employee referral programmes, and offering m monetary rewards for new candidates can help in finding new candidates faster. Providing a collaborative and supportive work culture, a road map to conflict management, and employee engagement initiatives  will definitely reduce time and efforts to keep the candidates productive. A healthy work culture will boost self motivation to work, indirectly improving productivity and promptly attaining company goals. Creating an environment where the employees feel heard can significantly augment the morale at the workplace, making it a more favourable place to work. Market research for competitive compensation and formulating strategies like performance based rewards and recognition  will motivate employees to work wholeheartedly, thereby increasing their  self inspiration in employees to work. An employee development plan to advance their careers by providing timely training, providing cross functional training  and implementing it throughout can boost productivity. Designing and implementing work life balance solutions to retain employees for the long term can help achieve company milestones at a greater pace. Continuous monitoring of policies and processes for continuous improvement and reframing them can benefit the organisation in achieving long term goals.

Limitations

There can be well defined policies and procedures to mitigate HR risks. However, there will always be limitations in managing HR risks. Factors like insufficient data or partial information, unpredictability, expectation of normality, physiological biases, non- coordination, inadequate foresite or overprioritisation of risks can be limiting factors in mitigating HR risks. 

Conclusion

Although strategic planning and forecasting can lead to minimising risks and increasing productivity, to achieve company goals, there will always be defects and gaps hindering human resource risk management and productivity. In modern times, the management of human resource risks will be more diversified and exhaustive in nature, needing extensive effort for continuous improvement 

References

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