Risky Business

Human resource and risk management roles complement each other.

By Adam Van Brimmer Mar 1, 2012
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March CoverDennis Healy juggles. Not balls or clubs, but skills. He's a licensed private investigator and qualifies as a first responder for emergencies involving hazardous materials. His showstopper, however, comes from knowledge gleaned working in human resources and risk management—at the same time. Healy recently became assistant director of risk services for Woodland Hills, Calif.-based Poms & Associates Insurance Brokers Inc., but he spent the previous four years concurrently serving as vice president of human resources for the Los Angeles Daily News and director of risk management for the parent company, the Los Angeles Newspaper Group. Healy shares insights on how the human resource and risk management roles complement each other and how leaders in both can work together to mitigate risks and save an employer money.

What risk management issues are employers struggling with the most?

Workers' compensation fears are driving companies' insurance exposure. With reductions in staff and layoffs, we're seeing a spike in workers' comp claims. Workers' comp benefits are more generous than unemployment benefits, and people know it.

We're also seeing an uptick in employment practices liability insurance claims, which come from allegations of discrimination, sexual harassment, defamation or wrongful termination.

Fortunately, as the recovery takes hold and more people come back to work and feel more secure, the number of insurance claims will fall.

It’s good for HR professionals to learn what risk managers do and vice versa, but both sides have to come together.

What role should HR professionals play in these issues?

Human resource and risk management professionals have to join themselves at the hip and institute programs that will mitigate risks—proactive approaches such as safety programs and training, and reactive approaches such as return-to-work and light-duty programs that get sick or injured people back into the workplace sooner.

If HR is going to lay off or terminate an employee, risk managers can help with due diligence so the employee can't claim that the separation was based on age, gender or another protected class.

How can HR and risk management staffs have productive relationships?

They are two separate disciplines, and they should try to respect each other. HR professionals are on the front end and risk managers are on the back end of managing risk, and they can assist each other. Human resource professionals are good at building and maintaining files, keeping up with what's going on in the workplace, and conducting investigations. Once an issue lands on the risk manager's desk, something has happened.

In my time wearing both hats, it was a juggling act. It's good for HR professionals to learn what risk managers do and vice versa, but staffers on both sides have to come together. It's natural for one department or the other to get territorial, to decide they know the other guy's business better than he does. But working together represents an opportunity to reduce claims and the severity of the claims. Once HR managers know the risk management side, they approach everything as if things are going to get ugly.

A recent Corporate Executive Board survey found that information technology security tops the risk "hot spots" for 2012. How should human resource managers mitigate that risk?

It starts with interviewing and hiring IT workers. Select people who value cybersecurity. You can train them on your processes. Cybersecurity is evolving so fast, and most HR and risk management people aren't experts in IT. The IT people are policing themselves. There's this IT cloud, and IT people aren't anxious to share what they do. HR and risk managers need to get their arms around the IT roles.

What HR-related risks often get overlooked, and how can HR professionals help manage those risks?

The biggest overlooked risk involves documents. And it all boils down to privacy. Even today, HR departments are mostly run with paper files that contain personal information. We're transitioning to digital filing, but employee files contain so much historical information, like performance evaluations, many employers can't input all the data. Put all files in a protected database. Then, HR has to make sure the paper files are destroyed.

With so many areas of risk for human resource professionals to track, is there a strategy you would recommend?

Keep your eyes and ears open. You should have your radar on all the time. If you get a feeling something is not right, investigate. Don't let it go. If you see a problem, you have to react. It's called "management by walking around." If you're sitting at your desk behind your computer and don't have your finger on the pulse of the organization, you're exposing yourself to liability.

The interviewer is a business reporter for the Savannah Morning News and a freelance writer based in Savannah, Ga.

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