{"id":841,"date":"2019-08-13T22:57:51","date_gmt":"2019-08-13T22:57:51","guid":{"rendered":"https:\/\/courses.lumenlearning.com\/wm-humanresourcesmgmt\/?post_type=chapter&#038;p=841"},"modified":"2024-04-25T01:46:05","modified_gmt":"2024-04-25T01:46:05","slug":"risks-in-human-resources","status":"publish","type":"chapter","link":"https:\/\/courses.lumenlearning.com\/wm-humanresourcesmgmt\/chapter\/risks-in-human-resources\/","title":{"raw":"Risks in Human Resources","rendered":"Risks in Human Resources"},"content":{"raw":"<div class=\"textbox learning-objectives\">\r\n<h3>Learning Outcomes<\/h3>\r\n<ul>\r\n \t<li>Identify the risks associated with human resource activities<\/li>\r\n<\/ul>\r\n<\/div>\r\n<blockquote>Almost everything that can go wrong in a business has a human capital component.\r\n\r\n\u2014David Creelman, Creelman Research[footnote]Lower &amp; Associates. \"<a href=\"https:\/\/blog.lowersrisk.com\/human-capital-risk\/\" target=\"_blank\" rel=\"noopener\">5 Critical Areas of Human Capital Risk.<\/a>\" The Risk Management Blog. August 8, 2013. Accessed August 20, 2019.[\/footnote]<\/blockquote>\r\n<img class=\"alignright wp-image-2369\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/4056\/2019\/08\/11214758\/photo-1450101499163-c8848c66ca85-300x200.jpeg\" alt=\"Decorative image.\" width=\"350\" height=\"234\" \/>The Center for Safety and Health Sustainability notes the \u201cAn organization\u2019s human capital includes the skills, knowledge and abilities that workers bring to their work as well as how they use them.\u00a0.\u00a0.\u00a0. Effective management of an organization\u2019s human capital underpins corporate performance and sustainability.\u201d[footnote]\"<a href=\"https:\/\/www.centershs.org\/human-capital.php\" target=\"_blank\" rel=\"noopener\">The Human Capital Project.<\/a>\" Center for Safety &amp; Health Sustainability. Accessed August 20, 2019.[\/footnote] Human capital risks include dangers to personnel and risks arising from loss of or inappropriate use of those skills, knowledge and abilities, including unauthorized use or distribution of confidential or proprietary information.\r\n\r\nRisk mitigation consulting firm Lowers &amp; Associates identifies the five critical human capital risk areas:[footnote]Lower &amp; Associates. \"5 Critical Areas of Human Capital Risk.\" The Risk Management Blog.[\/footnote]\r\n<ol>\r\n \t<li style=\"font-weight: 400;\"><strong>Complacency.<\/strong> For perspective, the Risk Management Society states that \u201ccomplacency comes from a place where \u2018I don\u2019t know\u2019 and \u2018I don\u2019t care\u2019 run rampant.\u201d<\/li>\r\n \t<li style=\"font-weight: 400;\"><strong>Turnover<\/strong>\r\n<ul>\r\n \t<li style=\"font-weight: 400;\">Companies pay between 25% to 250% of an employee\u2019s annual salary to replace that employee<\/li>\r\n \t<li style=\"font-weight: 400;\">Direct and indirect costs including temporary staffing, training, lost productivity, reduced morale and loss of clients and know-how<\/li>\r\n<\/ul>\r\n<\/li>\r\n \t<li style=\"font-weight: 400;\"><strong>Occupational fraud.<\/strong> Costs businesses 5\u20137% of annual revenue, including management costs and damages to brand, employee morale, external business relationships, regulator relationships and stock value<\/li>\r\n \t<li style=\"font-weight: 400;\"><strong>Catastrophic workplace events<\/strong>\r\n<ul>\r\n \t<li style=\"font-weight: 400;\">Injuries and illnesses, fatalities and homicides<\/li>\r\n \t<li style=\"font-weight: 400;\">Potentially significant damage to people, brands and profits<\/li>\r\n \t<li style=\"font-weight: 400;\">The annual cost of workplace violence for employers is estimated to be roughly $121 billion[footnote]Johnson, Denise. \"<a href=\"https:\/\/www.insurancejournal.com\/magazines\/mag-features\/2017\/04\/17\/447940.htm\" target=\"_blank\" rel=\"noopener\">Risk Management: Employers Benefit from Mitigating Workplace Violence<\/a>.\" Insurance Journal. April 17, 2017. Accessed August 20, 2019.[\/footnote]<\/li>\r\n<\/ul>\r\n<\/li>\r\n \t<li style=\"font-weight: 400;\"><strong>Negligent hiring or retention.<\/strong> Perspective point: employers lose 75\u201380% of negligent hiring claims<\/li>\r\n<\/ol>\r\n<div class=\"textbox tryit\">\r\n<h3>Practice Question<\/h3>\r\nhttps:\/\/assess.lumenlearning.com\/practice\/5455508c-f712-4a4a-adbc-1a2d2503b3f3\r\n\r\n<\/div>\r\nTo elaborate on the fourth point, with increased socio- and geo-political tension and instability, there has been an increase in business risk, including risk to people. According to OSHA, \u201cacts of violence and other injuries [are] the third-leading cause of fatal occupational injuries in the United States.\u201d[footnote]\"<a href=\"https:\/\/www.osha.gov\/SLTC\/workplaceviolence\/\" target=\"_blank\" rel=\"noopener\">Workplace Violence<\/a>.\" Occupational Safety and Health Administration, United States Department of Labor. Accessed August 20, 2019. [\/footnote] Bureau of Labor Statistics data indicates that 458 of the fatal workplace injuries that occurred in the United States in 2017 were cases of intentional injury by another person. A March 2019 Society of Human Resource Management (SHRM) press release reported that one out of 7 people don\u2019t feel safe at work, \u201c[demonstrating the] need for more workplace violence education, prevention and training.\u201d[footnote]\"<a href=\"https:\/\/www.shrm.org\/about-shrm\/press-room\/press-releases\/pages\/2019-workplace-violence-research-report.aspx\" target=\"_blank\" rel=\"noopener\">With Workplace Violence on the Rise, 1 out of 7 People Don't Feel Safe at Work<\/a>.\" Society for Human Resource Management. March 19, 2019. Accessed August 20, 2019.[\/footnote] Underscoring both the sentiment and recommendations, SHRM\u2019s 2019 study of workplace violence found that almost half of HR professionals indicated their organization had experienced a workplace violence incident and over half of those who reported workplace violence indicated their organization had experienced an incident in the last year.","rendered":"<div class=\"textbox learning-objectives\">\n<h3>Learning Outcomes<\/h3>\n<ul>\n<li>Identify the risks associated with human resource activities<\/li>\n<\/ul>\n<\/div>\n<blockquote><p>Almost everything that can go wrong in a business has a human capital component.<\/p>\n<p>\u2014David Creelman, Creelman Research<a class=\"footnote\" title=\"Lower &amp; Associates. &quot;5 Critical Areas of Human Capital Risk.&quot; The Risk Management Blog. August 8, 2013. Accessed August 20, 2019.\" id=\"return-footnote-841-1\" href=\"#footnote-841-1\" aria-label=\"Footnote 1\"><sup class=\"footnote\">[1]<\/sup><\/a><\/p><\/blockquote>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignright wp-image-2369\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/4056\/2019\/08\/11214758\/photo-1450101499163-c8848c66ca85-300x200.jpeg\" alt=\"Decorative image.\" width=\"350\" height=\"234\" \/>The Center for Safety and Health Sustainability notes the \u201cAn organization\u2019s human capital includes the skills, knowledge and abilities that workers bring to their work as well as how they use them.\u00a0.\u00a0.\u00a0. Effective management of an organization\u2019s human capital underpins corporate performance and sustainability.\u201d<a class=\"footnote\" title=\"&quot;The Human Capital Project.&quot; Center for Safety &amp; Health Sustainability. Accessed August 20, 2019.\" id=\"return-footnote-841-2\" href=\"#footnote-841-2\" aria-label=\"Footnote 2\"><sup class=\"footnote\">[2]<\/sup><\/a> Human capital risks include dangers to personnel and risks arising from loss of or inappropriate use of those skills, knowledge and abilities, including unauthorized use or distribution of confidential or proprietary information.<\/p>\n<p>Risk mitigation consulting firm Lowers &amp; Associates identifies the five critical human capital risk areas:<a class=\"footnote\" title=\"Lower &amp; Associates. &quot;5 Critical Areas of Human Capital Risk.&quot; The Risk Management Blog.\" id=\"return-footnote-841-3\" href=\"#footnote-841-3\" aria-label=\"Footnote 3\"><sup class=\"footnote\">[3]<\/sup><\/a><\/p>\n<ol>\n<li style=\"font-weight: 400;\"><strong>Complacency.<\/strong> For perspective, the Risk Management Society states that \u201ccomplacency comes from a place where \u2018I don\u2019t know\u2019 and \u2018I don\u2019t care\u2019 run rampant.\u201d<\/li>\n<li style=\"font-weight: 400;\"><strong>Turnover<\/strong>\n<ul>\n<li style=\"font-weight: 400;\">Companies pay between 25% to 250% of an employee\u2019s annual salary to replace that employee<\/li>\n<li style=\"font-weight: 400;\">Direct and indirect costs including temporary staffing, training, lost productivity, reduced morale and loss of clients and know-how<\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\"><strong>Occupational fraud.<\/strong> Costs businesses 5\u20137% of annual revenue, including management costs and damages to brand, employee morale, external business relationships, regulator relationships and stock value<\/li>\n<li style=\"font-weight: 400;\"><strong>Catastrophic workplace events<\/strong>\n<ul>\n<li style=\"font-weight: 400;\">Injuries and illnesses, fatalities and homicides<\/li>\n<li style=\"font-weight: 400;\">Potentially significant damage to people, brands and profits<\/li>\n<li style=\"font-weight: 400;\">The annual cost of workplace violence for employers is estimated to be roughly $121 billion<a class=\"footnote\" title=\"Johnson, Denise. &quot;Risk Management: Employers Benefit from Mitigating Workplace Violence.&quot; Insurance Journal. April 17, 2017. Accessed August 20, 2019.\" id=\"return-footnote-841-4\" href=\"#footnote-841-4\" aria-label=\"Footnote 4\"><sup class=\"footnote\">[4]<\/sup><\/a><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\"><strong>Negligent hiring or retention.<\/strong> Perspective point: employers lose 75\u201380% of negligent hiring claims<\/li>\n<\/ol>\n<div class=\"textbox tryit\">\n<h3>Practice Question<\/h3>\n<p>\t<iframe id=\"assessment_practice_5455508c-f712-4a4a-adbc-1a2d2503b3f3\" class=\"resizable\" src=\"https:\/\/assess.lumenlearning.com\/practice\/5455508c-f712-4a4a-adbc-1a2d2503b3f3?iframe_resize_id=assessment_practice_id_5455508c-f712-4a4a-adbc-1a2d2503b3f3\" frameborder=\"0\" style=\"border:none;width:100%;height:100%;min-height:300px;\"><br \/>\n\t<\/iframe><\/p>\n<\/div>\n<p>To elaborate on the fourth point, with increased socio- and geo-political tension and instability, there has been an increase in business risk, including risk to people. According to OSHA, \u201cacts of violence and other injuries [are] the third-leading cause of fatal occupational injuries in the United States.\u201d<a class=\"footnote\" title=\"&quot;Workplace Violence.&quot; Occupational Safety and Health Administration, United States Department of Labor. Accessed August 20, 2019.\" id=\"return-footnote-841-5\" href=\"#footnote-841-5\" aria-label=\"Footnote 5\"><sup class=\"footnote\">[5]<\/sup><\/a> Bureau of Labor Statistics data indicates that 458 of the fatal workplace injuries that occurred in the United States in 2017 were cases of intentional injury by another person. A March 2019 Society of Human Resource Management (SHRM) press release reported that one out of 7 people don\u2019t feel safe at work, \u201c[demonstrating the] need for more workplace violence education, prevention and training.\u201d<a class=\"footnote\" title=\"&quot;With Workplace Violence on the Rise, 1 out of 7 People Don't Feel Safe at Work.&quot; Society for Human Resource Management. March 19, 2019. Accessed August 20, 2019.\" id=\"return-footnote-841-6\" href=\"#footnote-841-6\" aria-label=\"Footnote 6\"><sup class=\"footnote\">[6]<\/sup><\/a> Underscoring both the sentiment and recommendations, SHRM\u2019s 2019 study of workplace violence found that almost half of HR professionals indicated their organization had experienced a workplace violence incident and over half of those who reported workplace violence indicated their organization had experienced an incident in the last year.<\/p>\n\n\t\t\t <section class=\"citations-section\" role=\"contentinfo\">\n\t\t\t <h3>Candela Citations<\/h3>\n\t\t\t\t\t <div>\n\t\t\t\t\t\t <div id=\"citation-list-841\">\n\t\t\t\t\t\t\t <div class=\"licensing\"><div class=\"license-attribution-dropdown-subheading\">CC licensed content, Original<\/div><ul class=\"citation-list\"><li>Risks in Human Resources. <strong>Authored by<\/strong>: Nina Burokas. <strong>Provided by<\/strong>: Lumen Learning. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by\/4.0\/\">CC BY: Attribution<\/a><\/em><\/li><\/ul><div class=\"license-attribution-dropdown-subheading\">CC licensed content, Shared previously<\/div><ul class=\"citation-list\"><li>Sign here. <strong>Authored by<\/strong>: Helloquence. <strong>Provided by<\/strong>: Unsplash. <strong>Located at<\/strong>: <a target=\"_blank\" href=\"https:\/\/unsplash.com\/photos\/OQMZwNd3ThU\">https:\/\/unsplash.com\/photos\/OQMZwNd3ThU<\/a>. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/about\/cc0\">CC0: No Rights Reserved<\/a><\/em>. <strong>License Terms<\/strong>: Unsplash License<\/li><\/ul><\/div>\n\t\t\t\t\t\t <\/div>\n\t\t\t\t\t <\/div>\n\t\t\t <\/section><hr class=\"before-footnotes clear\" \/><div class=\"footnotes\"><ol><li id=\"footnote-841-1\">Lower &amp; Associates. \"<a href=\"https:\/\/blog.lowersrisk.com\/human-capital-risk\/\" target=\"_blank\" rel=\"noopener\">5 Critical Areas of Human Capital Risk.<\/a>\" The Risk Management Blog. August 8, 2013. Accessed August 20, 2019. <a href=\"#return-footnote-841-1\" class=\"return-footnote\" aria-label=\"Return to footnote 1\">&crarr;<\/a><\/li><li id=\"footnote-841-2\">\"<a href=\"https:\/\/www.centershs.org\/human-capital.php\" target=\"_blank\" rel=\"noopener\">The Human Capital Project.<\/a>\" Center for Safety &amp; Health Sustainability. Accessed August 20, 2019. <a href=\"#return-footnote-841-2\" class=\"return-footnote\" aria-label=\"Return to footnote 2\">&crarr;<\/a><\/li><li id=\"footnote-841-3\">Lower &amp; Associates. \"5 Critical Areas of Human Capital Risk.\" The Risk Management Blog. <a href=\"#return-footnote-841-3\" class=\"return-footnote\" aria-label=\"Return to footnote 3\">&crarr;<\/a><\/li><li id=\"footnote-841-4\">Johnson, Denise. \"<a href=\"https:\/\/www.insurancejournal.com\/magazines\/mag-features\/2017\/04\/17\/447940.htm\" target=\"_blank\" rel=\"noopener\">Risk Management: Employers Benefit from Mitigating Workplace Violence<\/a>.\" Insurance Journal. April 17, 2017. Accessed August 20, 2019. <a href=\"#return-footnote-841-4\" class=\"return-footnote\" aria-label=\"Return to footnote 4\">&crarr;<\/a><\/li><li id=\"footnote-841-5\">\"<a href=\"https:\/\/www.osha.gov\/SLTC\/workplaceviolence\/\" target=\"_blank\" rel=\"noopener\">Workplace Violence<\/a>.\" Occupational Safety and Health Administration, United States Department of Labor. Accessed August 20, 2019.  <a href=\"#return-footnote-841-5\" class=\"return-footnote\" aria-label=\"Return to footnote 5\">&crarr;<\/a><\/li><li id=\"footnote-841-6\">\"<a href=\"https:\/\/www.shrm.org\/about-shrm\/press-room\/press-releases\/pages\/2019-workplace-violence-research-report.aspx\" target=\"_blank\" rel=\"noopener\">With Workplace Violence on the Rise, 1 out of 7 People Don't Feel Safe at Work<\/a>.\" Society for Human Resource Management. March 19, 2019. Accessed August 20, 2019. <a href=\"#return-footnote-841-6\" class=\"return-footnote\" aria-label=\"Return to footnote 6\">&crarr;<\/a><\/li><\/ol><\/div>","protected":false},"author":17,"menu_order":15,"template":"","meta":{"_candela_citation":"[{\"type\":\"original\",\"description\":\"Risks in Human Resources\",\"author\":\"Nina Burokas\",\"organization\":\"Lumen Learning\",\"url\":\"\",\"project\":\"\",\"license\":\"cc-by\",\"license_terms\":\"\"},{\"type\":\"cc\",\"description\":\"Sign here\",\"author\":\"Helloquence\",\"organization\":\"Unsplash\",\"url\":\"https:\/\/unsplash.com\/photos\/OQMZwNd3ThU\",\"project\":\"\",\"license\":\"cc0\",\"license_terms\":\"Unsplash License\"}]","CANDELA_OUTCOMES_GUID":"0d21e114-c8da-426f-8f36-815ab76ee7d9, ee6388b6-3a36-42ad-8892-6e299a80a605","pb_show_title":"on","pb_short_title":"","pb_subtitle":"","pb_authors":[],"pb_section_license":""},"chapter-type":[],"contributor":[],"license":[],"class_list":["post-841","chapter","type-chapter","status-publish","hentry"],"part":825,"_links":{"self":[{"href":"https:\/\/courses.lumenlearning.com\/wm-humanresourcesmgmt\/wp-json\/pressbooks\/v2\/chapters\/841","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/courses.lumenlearning.com\/wm-humanresourcesmgmt\/wp-json\/pressbooks\/v2\/chapters"}],"about":[{"href":"https:\/\/courses.lumenlearning.com\/wm-humanresourcesmgmt\/wp-json\/wp\/v2\/types\/chapter"}],"author":[{"embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/wm-humanresourcesmgmt\/wp-json\/wp\/v2\/users\/17"}],"version-history":[{"count":11,"href":"https:\/\/courses.lumenlearning.com\/wm-humanresourcesmgmt\/wp-json\/pressbooks\/v2\/chapters\/841\/revisions"}],"predecessor-version":[{"id":3411,"href":"https:\/\/courses.lumenlearning.com\/wm-humanresourcesmgmt\/wp-json\/pressbooks\/v2\/chapters\/841\/revisions\/3411"}],"part":[{"href":"https:\/\/courses.lumenlearning.com\/wm-humanresourcesmgmt\/wp-json\/pressbooks\/v2\/parts\/825"}],"metadata":[{"href":"https:\/\/courses.lumenlearning.com\/wm-humanresourcesmgmt\/wp-json\/pressbooks\/v2\/chapters\/841\/metadata\/"}],"wp:attachment":[{"href":"https:\/\/courses.lumenlearning.com\/wm-humanresourcesmgmt\/wp-json\/wp\/v2\/media?parent=841"}],"wp:term":[{"taxonomy":"chapter-type","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/wm-humanresourcesmgmt\/wp-json\/pressbooks\/v2\/chapter-type?post=841"},{"taxonomy":"contributor","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/wm-humanresourcesmgmt\/wp-json\/wp\/v2\/contributor?post=841"},{"taxonomy":"license","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/wm-humanresourcesmgmt\/wp-json\/wp\/v2\/license?post=841"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}