Identify, Measure and Manage Workforce Related Risks Effectively.
Risk Management professionals have the important task of ensuring obstacles that could jeopardize the organization's earnings, shareholder value and strategic plans are mitigated. As a result of the new Securities and Exchange Commission (SEC) regulations passed on February 28th, 2010, Boards of Directors have been delegated far-reaching responsibilities related to shareholder risk management including discovery, monitoring and reporting on a quarterly basis.
When 7 to 41% of earnings is lost due to inefficient Human Capital Management processes and systems, it becomes an essential domain of Risk Management executives.
It is not uncommon to include a statement in your 10-K (if you are a public organization) regarding your ability to attract and maintain quality employees or effectively develop leaders for succession planning. Unforeseen challenges associated with your human capital strategy could include such factors as:
- Shortage between the business' labor requirements and the actual supply of skilled labor
- Unnecessarily long time-to-fill periods for revenue producing positions directly resulting in lower profitability
- Excessive amounts of leave and extended work schedules resulting in measureable increases in accidents, lost revenue, delayed strategic projects and lost customers
- Excessive overtime due to inefficient recruiting and retention processes
- High turnover of top performers in high impact and mission critical positions
- Poor human capital performance across certain business units
- Imbalance of minorities across the board, especially in leadership positions
- State and Federal minimum wage requirements and other regulations
Your workforce affects every aspect of the organization, placing business initiatives at risk, lowering your KPI's and increasing earnings and shareholder risks. Delayed decisions and execution on projects, production and distribution result in poor customer service and lost goodwill and opportunity costs. A lack of leadership or management skills or poor order fulfillment can lead to low sales and high turnover.
Consider the case of the distracted or overworked plant maintenance worker who makes a simple mistake resulting in a plant explosion, shut-down, over a billion dollars in lost revenue, environment impacts and even the death of employees.
You may be a risk manager for a major retail organization on track to achieve its annual goals, when the top performing network analyst leaves a group of unmotivated employees during the holiday season. They carelessly allow the primary T-1 network supporting the entire web sales system to crash resulting in frustrated and often lost customers.
These are real examples of a single employee's impact on an organization. So why isn't more attention being paid to, undoubtedly, the most important component of your strategy? Because I wasn't until now that there has been a way to quantifiably measure or monitor this risk.
SonarVision answers your workforce and labor related questions. This workforce planning and analytics system equips leadership with the tools and information to plan, direct, manage and optimize nearly all other mission critical systems, projects, programs and operations.