Mitigating risk in the workplace: Getting all stakeholders involved

Workplace safety has taken on greater significance since the start of the pandemic, with employers concerned about how to best protect their workers from COVID infections. But risk management existed well before the pandemic and includes much more than worker health.

Identifying and mitigating risks is an essential part of any company’s ongoing success. And the responsibility extends beyond risk management teams to include all stakeholders, from top-level C-suite execs down to individual workers. Princess Castleberry, interim head of people & wellness at Aclaimant and owner and principal consultant at Castle Risk & HR Consulting, recently shared some thoughts on how employers can ensure everyone is taking an active part in risk management.

What can businesses do to ensure all of their employees are aware of potential risks in the workplace?

Risk awareness-building begins at the top with executive leadership guidance and strategic plans that fund and prioritize the work of an inclusive enterprise risk management function. Right now, corporate boards are most concerned about ESG (environmental, social, and governance) risks with almost two-thirds of directors (64%) saying their strategy is tied to ESG issues. This increased risk focus will undoubtedly impact desired skills in CEO hiring and subsequent leadership positions, resource budgets, and executive sponsorship for corporate initiatives. The tone at the top will drive communication and awareness at all levels of management if done effectively.

So how can leaders ensure employees are aware of potential risks in the workplace and build an aware, risk-savvy culture? Building a diverse group of functional leaders that are engaged to identify, prioritize, and develop risk mitigation solutions will be critical to a successful risk mitigation strategy. Each department plays a critical role in identifying and mitigating problems in the workplace. For example, while HR leaders are at the helm of organizations’ most prominent risk mitigation functions, such as DE&I programs, COVID-19 response strategy, equitable compensation, benefits structuring, and fair employment practices, the marketing team leads internal and external crises and determines organizations’ official positions amid global social justice, civil rights, political, and economic events and catastrophes. Additionally, operations leaders ultimately determine the viability of companies’ risk programs based on what they learn from employees, customers, and partners and apply those to the overall business strategy.

Bringing this diverse group of leaders to the table creates the opportunity to reassess past risk registers and help properly quantify and prioritize new exposures in the context of today’s social climate, labor market, and global supply chains. These leaders will contribute invaluable insights to inform the risk management process and will serve as champions, proliferators, and enforcers of risk communications throughout the workplace.

In addition to creating a strong leadership team that is passionate about creating a risk-minded culture, leaders and managers can sit down with employees in 1:1 meetups, lunch and learns, or company-wide meetings to educate the workplace on basic knowledge and language used to identify risks. Businesses can also encourage their employees to participate in risk assessment training courses or comprehensive workplace safety training to prevent injuries and better understand, identify, and mitigate future potential risks.

What benefits do businesses see when employees at all levels identify potential risks and develop solutions to these problems proactively?

A siloed, purely reactive risk management function in today’s world is as dangerous as no risk management function at all. And the risks and complexities facing businesses are numerous these days between talent shortages, supply chain disruption, employment compliance, workplace safety, and data privacy issues. More deeply engaged function-specific risk managers can help properly quantify and prioritize those exposures in the context of today’s social climate, labor market, and global supply chains. Additionally, risk managers that can capture the attention of employees and promote a risk-oriented mindset within workers will find they have more engaged, safer employees.

With more engaged employees comes more involvement in shaping initiatives that keep the workplace safe, such as developing solutions to reduce or eliminate future potential risks. When the knowledge of identifying risks and the tools to countermeasure those risks are combined, a risk-minded culture that’s prepared for any and all potential workplace hazards emerges. This leads to faster escalation and resolution of employment practices, problematic workplace behaviors, customer/vendor service, and contract issues; deeper employee engagement with identifiable contributions to expense reduction; business decisions that are aligned with companies’ risk appetite and tolerance; and well-designed and fully socialized risk plans yield more measurable, predictable outcomes that ultimately lead to risk control.

Are there any best practices on how leaders and managers can embed an understanding of risk prevention to their employees?

The best way leaders and managers can ensure employees have an understanding of risk prevention is to clearly communicate the expectations surrounding risk identification. Having one place where employees can go to learn about risks, report workplace hazards, and overall program management across all levels will help employees better understand risk prevention. Technology plays a critical role in streamlining risk assessment and incident reporting and acts as the main hub of shared risk knowledge to strengthen risk awareness with high-quality training and meaningful enforcement.

Another best practice is to recognize that all leaders are risk managers, whether or not they serve in a traditional capacity or carry specific professional designations, and to lead by example. If leaders show they’re being proactive about identifying risks, developing solutions, and creating a safe workplace environment, employees will follow suit. For instance, if a manager sees someone slip and fall, the manager should report the incident, identify how the slip happened, and create a solution like putting up a sign so someone else doesn’t get injured in the same spot. This will encourage other employees to do the same by following in their manager’s footsteps to keep themselves and others safe and aid in consistent compliance enforcement.

Why is it important for businesses to reduce risk exposure? How does this benefit the company as a whole and employees?

Businesses must reduce risk exposure because it involves minimizing the impact of loss exposures before (and sometimes after) they occur rather than trying to eliminate them altogether, which will lead to a better and safer company culture and save the company’s bottom line profits by reducing and controlling loss expenses. After companies identify and assess their risks, they must take measurable action and monitor their mitigation strategies to establish control – which ultimately is the desired outcome of the risk management process. Companies that intentionally reduce risks still recognize that some degree of loss is inevitable.

Once an employee learns how to properly identify and mitigate risks, they’ll feel more comfortable reporting a workplace hazard in the future, thus promoting a safe work environment. Having a strong risk management strategy can aid in limiting workplace hazards and preventing workplace accidents before they even happen. Building physically, technically, mentally, and emotionally safer workplaces reduces risk exposure and helps companies report fewer claims, which helps them maintain a favorable insurance position and proactive claims defense position.

Beyond that, when a company shows they care about their employees’ wellbeing, employees are more likely to be satisfied with their job and retained at the company. This positive impact on employee retention helps companies save money on recruiting and hiring costs while also increasing productivity, profitability, and overall business operations.

What risks are on the horizon for the new year that employees should already be thinking about?

Employers can’t afford to leave risk and safety outcomes to chance or continue to use antiquated methods for risk identification and incident tracking while their employees, investors, and customers hang in the balance. Lack of technology integration is one of the biggest threats to businesses today. ​​Leaders across your organization can benefit from the adoption of a platform that digitally links all departments to streamline critical risk management processes and report and manage incidents. Whether your organization is centralized or decentralized, platforms can optimize HR system integration, safety and OSHA reporting, claims and legal document management, COVID-19 tracking, and return-to-work processes.

The key is to evaluate these emerging risks – such as the surge in Covid cases, labor shortages, and social, economic, and political changes – in the context of your own organization. Building an inclusive cohort of risk leaders from diverse functions, proliferating awareness from the board and executive levels all the way to the front lines, and adopting an integrated risk technology platform can mean the difference between meaningful updates to your road map, policies, and mitigation solutions or huge oversights that damage your organization financially and relationally.

The risks are more numerous than ever facing risk managers, and therefore risk managers’ roles will change to address these evolving challenges. One thing employees can expect from risk managers and leaders in 2022 is to be more involved in the company’s risk management strategy so they can proactively identify and quantify problems and develop meaningful solutions to those risks and enhance the business as a whole.