HR standards can help mitigate organizational risk in three key ways:
1) The HR risk standard provides a framework for systematically identifying and managing people-related risks that could negatively impact organizational objectives.
2) HR audits against the standards can assess risk areas and identify underperforming practices in need of improvement.
3) Consistently applying the HR standards and addressing risks identified in audits helps build a robust risk management culture and more professional HR function aligned with business strategy.
3. Global HR trends
• Strategic HR as foundation for HR success
• HR business partner role
• Talent management
• HR Governance – making better and ethican
decisions about people
• HR Risk Management
• HR Technology + social media
• Innovating the HR function and business
• OD focus in HR work – employee engagement
• HR measurement – big data & metrics
• HR competencies and standards
5. Top facts about HR
• Human Capital is the biggest concern for
CEOs (PwC).
• Only 18% of CEOs feel confident that they
have the right people in place to execute
strategy (CEB).
• Human Capital is the biggest risk in
business (HCI Africa).
• Skills crisis is the top obstacle to economic
growth.
• Strikes cost SA R 200 million+ per day.
6. More facts about HR
• SA losing R12 billion a year due to absenteeism.
• Only 19% auditors feel they use HR optimally (CG
Index – Institute of Internal Auditors)
• Only 5% employees understand business strategy.
• World-wide 13% of employees actively engaged.
• Companies with engaged employees outperform
others by 202% (Dale Carnegie).
• Companies with good HR Practices outperform
others by treating HR as critical business function,
these companies are 105% more profitable.
• Average ROI on wellness programmes: 300%.
8. What are standards really?
• A level of acceptable quality
• Good enough in terms of professionalism
• What is good or normal or usual
• A guideline for practice
• A foundation for reasonable expectations
and sound judgement
• A framework for managing risk
• A basis for measurement (M&E)
12. HR RISK MANAGEMENT
STANDARD
DEFINITION
HR Risk Management is a systematic
approach of identifying and addressing people
risks (uncertainties and opportunities) that can
either have a positive or negative effect on the
realisation of the objectives of an
organisation.
SABPP (2013)
14. HR Risk Management
OBJECTIVES
3.2.1 To increase the probability and impact of positive events and decrease the
probability and impact of negative events caused by people factors on the
achievement of organisational objectives.
3.2.2 To align HR and people management practices within the governance, risk
and compliance framework and integrated reporting model of the organisation.
3.2.3 To ensure appropriate risk assessment practices and procedures relating to
people factors are embedded within the organisation.
3.2.4 To ensure appropriate risk controls are designed and applied to HR activities
and interventions.
3.2.5 To contribute in creating and sustaining a risk culture in an organisation
which also encourages innovation and creativity.
SABPP (2013)
15. 181 babies died in state hospitals last year.
Human errors, faulty equipment
& cover-up by senior medical staff were key
factors.
Infection-control nurse retired, and her post not
filled.
Critical shortage of nurses & clinical engineers
who are responsible for maintaining ventilators.
Senior doctors presented inaccurate stats to their
bosses to cover up poor management practices.
Doctors failed to alert DoH to the crisis, even
though a few nurses had raised the alarm to
management.
Public sector case study
16. HR RISK MANAGEMENT PROCESS
Assessment of
risk tolerance
for each risk
Identify and
evaluate impact of
HR risks
HR practices,
programmes, metrics to
manage risks
HR Risk Map
HR Risk
Register
Organisation’s risk
management
structures and
processes
HR Risk
Register
HR Risk
Management
Plan
HR Risk Map
MONITOR &
EVALUATE
17. H R R I S K S – 8 African countries
• Safety - accidents
• Skills shortages/gaps
• Incompetence
• Employee
disengagement
• Strikes & poor
employment
relationships
• Fraud/corruption
• Stress
• Staff turnover
• Low staff satisfaction –
impact on customer
satisfaction
• Cyber security
• Conflict/disputes
• Diversity problems
• Sexual harassment
• Expatriate issues
• Non-compliance
21. BUSINESS STRATEGY – HR BUSINESS ALIGNMENT
Strategic
HRM
5.0
Talent
Management
4.3
HR Risk
Management
4.1
FUNCTIONAL & CROSS FUNCTIONAL HR VALUE CHAIN
HR VALUE &
DELIVERY PLATFORM
Work-
force
Planning
4.4
Learning
5.7
Perfor-
mance
5.3
Reward
4.7
Well-
ness 5.5
ERM
5.8
OD
4.7
HR Service
Delivery
5.6
HR Technology
(HRIS) 4.6
Prepare
Imple-
ment
Review ImproveMEASURING HR SUCCESS 3.8
HR Audit: Standards & Metrics
HRCOMPETENCIES
SELF RATINGS – OVERALL AVERAGE MAY 2016
400
responses
22. BUSINESS STRATEGY – HR BUSINESS ALIGNMENT
Strategic
HRM
6.0
Talent
Management
4.8
HR Risk
Management
6.5
FUNCTIONAL & CROSS FUNCTIONAL HR VALUE CHAIN
HR VALUE &
DELIVERY PLATFORM
Work-
force
Planning
5.8
Learning
6.5
Perfor-
mance
6.3
Reward
6.3
Well-
ness
6.6
ERM
6.6
OD
5.7
HR Service
Delivery
5.6
HR Technology
(HRIS) 5.6
Prepare
Imple-
ment
Review ImproveMEASURING HR SUCCESS 4.9
HR Audit: Standards & Metrics
HRCOMPETENCIES
AUDIT SCORES – OVERALL AVERAGE MAY 2016
17 audits
23. Link to risk
• The HR Risk Standard provides you with the
methodology and steps to identify and
manage people risks.
• Any standard scoring less than 60% in an
audit puts the organisation at risk.
• Build robust risk mitigation strategies in all
underperforming areas.
• Create a culture of continuous improvement.
24. Value of HR Audits
HR Audits as valuable instrument to mitigate
HR risks and to improve HR impact
Email: hraudit@sabpp.co.za
Tel: (011) 045 5400
27. What the Auditors are looking for?
Positive trend in
results?
Sustainable?
Targets met?
External benchmarks?
Approach vs results?
Quality of
results
Across whole
organisation?
Up and down the
organisation?
Extent of
application
Sound?
Systematic?
Integrated?
Reviewed & updated?
Quality
approach
28. RATING SCALE TO ASSESS HR
PROBLEMATIC MEDIOCRE EXCELLENT
High Risk Medium Risk Low/no Risk
HR practice is non-existent,
has a low uptake or is applied
poorly. Little, no or poor
results are evident. Requires
urgent attention to move to
medium risk over short or
medium term.
Some pockets of excellence,
but they are isolated, and
applied inconsistently in
certain parts of company.
Some occasional positive
results comparable to typical
average HR standards. Should
be addressed before it
becomes problematic.
HR leading practice is well
infused, aligned and integra-
ted across the company and
applied consistently with clear
results. Comparable to world-
class standards. Should be
maintained, reinforced or used
as a model for other
companies.
29. SUSTAINABLE PERFORMANCE
“Whether a company sustains exceptional performance
depends first and foremost on whether it continues to
have the right people in power.”
30.
31. Can HR Standards mitigate risk?
• The 13 HR standards are positioned as a
risk-based framework to manage your
people risk in organisations.
• The HR Risk standard provides specific
focus on people risks.
• Identify and mitigate your HR risks.
• HR audits can be used as part of the 5 lines
of assurance in accordance with King IV.™
• Apply the HR standards (and HR Risk) and
get your HR function audited.
32. Conclusion
HR Standards usher in a new period of
institutionalising people management as a
best practice for sound HR professionalism in
organisations. As HR practitioners you are the
specialists who can make this change
successful. Let us build great organisations
with great people and HR functions in driving
our business strategies, while mitigating HR
risks in the process.