RISK MANAGEMENT TRAINING
FOR YOUR ORGANIZATION
FOR YOUR ORGANIZATION
Types of Risk in Organizations
No matter the type of business, there are always risks that come along, and some are more detrimental than others. When it comes to managing risk, it’s important to know about the different kinds of risks that an organization can face.- Economic risk – With every passing day the economy changes as markets shift. It’s important to monitor the market and plan for economic boons and downturns.
- Financial risk – Money is at the forefront of every organization. Financial risks can also be categorized as internal or external and include unexpected costs, employee turnover, rent increases, taxes, cash flow, and credit.
- Operational risk – This refers to day-to-day operations and what internal, external, or combination of factors could affect those. Examples include a natural disaster, property damage, server outage, and loss of power.
- Compliance risk – From the Occupational Safety and Health Administration (OSHA) to the Environmental Protection Agency (EPA) to state and local laws, companies face many regulations they must comply with.
- Security risk – As more business moves online, it’s important to manage and protect personal data from hacking attempts.
- Reputation risk – There’s always the risk that an unhappy customer or disgruntled employee can leave a bad review, or that a product fails to meet expectations. These can lead to negative press and even lawsuits and, in the end, hurt an organization’s reputation.
- Competition risk – Competition is always a risk. Competitors may be offering better solutions for your customers, so it’s important to stay on top of their products and initiatives.
A known risk is a risk that has been mentioned by a stakeholder or an employee. It could have been mentioned in passing or by an industry expert and should be analyzed and documented.
An unknown risk is one that isn’t known so it is unable to be managed, such as weather or a sudden death.
An unknowable risk is a risk that no person is expected to foresee. Examples include system failures or a market crash.
The Role of HR in Risk Management
HR risk management focuses specifically on the risks that employees pose to the business. This includes poor employee management, poor behavior, hiring, and terminations. The focus is on all employees, from seasonal to C-suite, and it helps HR measure and plan for associated problems.Compensation and benefits could face financial risk. Hiring could face legal and compliance risk. The workplace could have safety issues and environmental risk.
All of these potential risk areas make it important for HR to have a thorough understanding of how to address and prepare for them as much as possible.
How Poor Risk Management Can Affect Business
When risk is misunderstood, mismanaged, or ignored, there are numerous consequences that can greatly affect business operations.Projects can become delayed. Unforeseen risks can slow projects down as workers need to analyze them and begin to develop a plan to move forward. This wastes time and could cause a decrease in the project’s overall value.
Not properly planning budgets is a large factor of poor risk management. By not accounting for and identifying probable risks, budgets can be overrun easily.
Customers and shareholders don’t want to be part of something that is seen as high risk. They’ll want information up front to ease their concerns, and information about backup plans and contingencies if things go wrong. If they aren’t given that, they could become unhappy and take their business elsewhere.
Even if you have a plan in place, there is the possibility that the employees won’t buy into it. Not following an established process or using the proper tools will result in a poorly managed situation where risk is involved.
Preview Videos from The BizLibrary Collection
Risk Management: What Are Your Areas of Risk?
This video outlines areas of potential risk that every organization should be aware of as well as the 12 major areas of risk.
Crisis Management Strategy Planning
This video helps identify and manage serious risk in several ways, including identifying threats in advance, planning for business continuity, and ensuring spokespersons are effective.
Risk Management: Best Practices
This video provides information on risk management standards as well as the best practices to use in implementing a strategic plan. It also delves into the five components of the risk management framework.
Establishing a Risk Management Plan
The process for creating a risk management plan has a few steps.
- Complete a risk assessment. It’s important to identify all of the possible risks that could occur, understanding that some are unknowable. There are a few ways to complete a risk assessment – they include interviewing stakeholders and experts, brainstorming with staff, and simply making assumptions and determining if they are valid.
- Evaluate the consequences, impact, and probability of each risk. These factors help to give context and understanding to how bad the risks can be and how to plan for them. If there are a lot of probable risks, consider rating the likelihood that they will occur against the impact they would have to the organization.
- Assign responsibilities to employees for each risk. If a risk becomes an actual issue, the employee assigned to that risk is responsible for following through on any planned actions. However, make sure that all employees are aware of what to do if any risk should arise.
- Determine preventative strategies. A team should brainstorm strategies for response if something happens. There are four main strategies on how to respond to risk – avoid it, transfer responsibility to someone else, mitigate the risk and reduce impact, and accept the fallout.
- Create a contingency plan. These plans are usually put in place for the high priority, high impact risks, and cover what to do if or when these risks happen.
- Measure risk threshold. Risk threshold is the amount of risk a company is willing to take on. Working with stakeholders to see what gambles are worth it and which are not can aid in determining an organization’s risk threshold.
- Continue to monitor risks. Risk management never ceases, as there are so many unpredictable things that can happen. Risk probability can change in an instant, so a risk management plan should be constantly evolving.
How Online Training in Risk Management Can Help Employees
Online training is quickly becoming the best way to teach employees some of the skills they need to do their jobs. Numerous studies have shown that online training is often more effective, and learners retain more information than with classroom training alone.
BizLibrary curates a large and diverse video training library with numerous courses focused on developing all types of risk management skills. Our micro video format breaks content up into smaller, more manageable chunks, making it easier for employees to learn and apply these skills on the job.
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Employees can search our library for the online courses they want to see on ways to improve their risk management skills.
These online courses can be viewed on an individual basis – where employees learn by themselves at work or at home – or as part of a group training environment or discussion. They also utilize modern learning strategies that engage learners and reinforce content, so the information isn’t forgotten.
Help your employees be better at managing and preparing for risk by utilizing modern, engaging training content in an easy-to-use platform. Talk with an expert to learn how our online learning solutions can transform training in your organization.
