For the second part of our series on risk mitigation, we’ll talk about one of the most important assets in business — employees. 

The People Risk and How it Affects Business 

People can help you build your business. But they can also be the reason for its collapse. Here are some examples of people risk: 

  • Leadership failure 
  • Mismanagement 
  • Hiring the wrong people 
  • Low employee morale 
  • Bad office politics 
  • Stagnant career development 
  • Inappropriate behaviour in the workplace 
  • Uncontrollable urges, desires, decisions, and actions which can harm the business 
  • Harsh, uncalculated decision-making 

Failure to take immediate action to mitigate such risks can lead to financial loss, a poor company image, a toxic work environment and slower growth. 

Where Does Employee Risk Mitigation Begin? 

Employee risk mitigation begins at the core of your business – the reason why you started it in the first place. 

You can’t hire the right people if you don’t have a clear idea of where you want to take your business. You can’t implement sound policies with vague company values. And you can hardly promote good company culture if you don’t set the right example. 

Mitigating people risks start from the top executives, directors, stakeholders, managers and trickles across to the employees. 

Business leaders influence how their employees behave and perform – this is why you should promote a positive work environment before trying to resolve issues like low productivity with band-aid solutions. 

Basic Practices to Mitigate People Risks 

Risk mitigation doesn’t have to be complex and sophisticated. In fact, you can start by applying these fundamental principles: 

  • Good leadership – How do the leaders within your organization shape and develop their respective teams? 
  • Open communication – Can your staff express their thoughts and opinions freely? 
  • Transparency and authenticity – Are you transparent with company policies and issues in your organization? How do you deliver information across departments? 
  • Active support to employees – How do you help employees achieve their goals? 

The best employee risk mitigation approach is to develop a mutually beneficial relationship with your employees. Rather than seeing them as threats, consider them as your partner for growth and success. 

Risk Mitigation Strategies 

Let’s dive into strategies you can focus on in giving your employees a better experience in the workplace. 

Seek ways to improve employee satisfaction

Research revealed that a significant percentage of employees quit their job due to a lack of appreciation. Note that the average turnover costs for hiring new staff can reach up to 20% of a salary. 

Money isn’t the major driving force for employees but rather people focus on factors such as recognition, certainty, culture, equality, mutual respect and a comfortable work environment. Finding the balance between these elements can boost employee satisfaction.

Satisfied employees tend to be more productive and innovative, and this translates to lower levels of absenteeism and staff turnover and ultimately overall better business performance.

Provide work/life balance 

Providing employees with an opportunity for work/life balance enables them to be engaged and resilient. They also deliver better work performance and develop positive well-being. 

Cultivating your employees’ wellbeing is an excellent long-term strategy to reduce absenteeism and staff turnover – importantly this translates into positive business results.

Offer opportunities for career progression 

Another reason why employees leave their jobs is because of a lack of career progression. In a study, 82% of employees stated this as the reason for quitting. 

Like mentioned earlier, it is important to develop a mutually beneficial relationship with your employees – they also have goals they want to achieve; they’re also geared for success. 

As a business leader, make sure there’s a clear pathway for your employees. Have regular one-to-one catch-ups with your staff to find out what they want and figure out how you can help them achieve their goals. 

In Conclusion 

The workplace is a community where different types of people try to make a living. It’s a place where everything is interconnected, where every action can leave positive or negative consequences and where someone’s growth can have a positive impact on the business. 

Start with the leaders in your organization. Cultivate a culture of trust, transparency, accountability, and openness. Give your people a better place to work. Show them that working in your business can improve their way of life by offering them opportunities to achieve satisfaction, work/life balance, and career progression.  

Click here to read part 1 of this article.

Let Us Help 

If your business has a turnover of over $1 million, ABJ Solutions is offering a complimentary one-hour meeting to help answer questions and model critical decisions with you. Get in touch with us today so that we can help guide you through these challenging times.

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