From the course: Certification Prep: SHRM-CP

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Risk management

Risk management

From the course: Certification Prep: SHRM-CP

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Risk management

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- Lee Iacocca once said, "Even a right decision is wrong" "if taken at the wrong time." Risk management is proactively identifying situations that could become a problem before they're an issue. Then taking measures to eliminate or reduce their impact. It's about making the right decision at the right time. Effective risk management is systematic and aligns processes to the company's strategic goals. In the HR world, risk falls into four categories. Strategy risks are ones that prevent the company from reaching its strategic goals. One example is an ineffective work force plan. Operations risks are ones that affect how the company maintains a profit. One example could be rising health care costs, which can cause an increase in expenses thereby reducing profits. Reporting risks are risks that affect the accurate reporting of financial data, such as the misappropriation of funds. Compliance risks are those that might affect the company remaining in legal compliance, like with the…

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