People are an organisation’s number-one asset. Unfortunately, they are also a primary source of risk.
People, by nature, are unpredictable and uncontrollable. We get tired, make mistakes, and make poor or thoughtless decisions. Sometimes we act unethically or even illegally. Major mistakes can lead to significant financial loss for the business, reputational damage, workplace accidents, injuries and death.
Below, we share the key sources of people risk in a typical organisation, and explore how Cited mitigates the workforce compliance side of people risk.
People risk factors differ across sectors
People risk profiles differ greatly depending on business size and type. For example, a mining company’s greatest source of people risk involves site safety – injuries caused by moving machinery and other hazards. A bank, on the other hand, would be more concerned with people risks including cybersecurity, theft and fraud.
Talent risk
Ask any head of HR currently grappling with the Great Resignation and they will tell you that talent attraction and retention is their main source of people risk. Failing to maintain a talent pipeline means businesses:
- struggle to reach their targets
- fail to grow
- spend more on recruitment advertising and hiring costs
- lose key organisational knowledge
- have difficulty delivering on current projects.
Unfilled positions inevitably increase the workload of remaining staff, leading to a cycle of burnout and resignations.
Cultural risk
A toxic or unhealthy workplace culture can lead to higher incidences of bullying, sexual harassment, and other negative behaviours that increase the rate of talent attrition. Other cultural problems can include low levels of diversity and inclusion, or occurrences of bias in decision-making, including recruitment. Sites such as Glassdoor mean poor company cultures are being rated and shared online, leading to talent attraction issues and reputational damage.
Health and safety risk
This area of risk encompasses everything from workforce exhaustion to deteriorating mental health, communicable diseases, and work-related injuries.
Tiredness and burnout increase the likelihood of poor mental health, absenteeism and employee attrition. It can also lead to more errors such as entering the wrong data in a spreadsheet or making a poor decision. In the age of machine learning, even the smallest data error can be compounded into an expensive issue for the business.
Health and safety risk can be mitigated by building a safety culture, as explored in this article from Cited.
Theft and fraud risk
Theft and fraud risk is higher in certain sectors such as banking, healthcare and government. Opportunity is a major factor, with certain professions such as accountants or procurement professionals having access to opportunities to behave unethically.
While protecting your business against theft and fraud takes a multi-faceted approach including strong internal controls, one of the most effective solutions is to conduct regular finance checks for employees in positions of trust.
Cybersecurity risk (human error and malicious insiders)
While much is made of external cyberattacks such as malware, ransomware, phishing or denial-of-service attacks, the strength of any cybersecurity system relies on people doing the right thing. In fact, an IBM Study found that “human error was a major contributing cause in 95% of all breaches”.
The Australian Cyber Security Centre (ACSC) also warns of the dangers of insider attacks, although they are not nearly so common as unintentional errors. According to ACSC, “malicious insiders” can:
- impact external sites, creating public damage to your brand
- prevent your systems from functioning properly
- steal or sell business trade secrets or intellectual property (IP)
- install malware for their own purposes.
Workforce compliance risk
Finally, compliance risk refers to your organisation’s exposure to fines, brand damage and other loss by failing to follow industry regulations. Workforce compliance can be managed with an end-to-end cloud-based digital platform such as Cited.
Lower your people risk with Cited
Cited provides instant visibility of your entire company’s compliance status right from your desktop, regardless of where your worksites are located or the number of staff you’re watching. Cited generates all the reporting and evidence you need to stay on top of risk issues before they even occur, and gives you the power to investigate any past incidents immediately.