What is Risk Management

What is Risk Management

Unless you work in the risk management field, or a related field like insurance, you are likely unfamiliar with the best practices of risk management surrounding you in all aspects of your work environment. However, most of us are already experts in risk management as it pertains to our own lives. Let’s face it, life is risky, and there is some level of risk associated with everything we do.

If you’ve made it this far and are reading this blog, you’ve already successfully managed some of the biggest risks associated with early death (i.e., choosing a career in staffing instead of tight-rope walking). As intuitive as some of these decisions may sound on a personal level, things can become more complex when thinking about risk for an organization or corporate entity. To manage risk in the workplace, it is essential to proactively understand the physical risks and potential hazards of each work environment, so that risks can be mitigated appropriately, and appropriate loss prevention measures can be deployed.

In an industry like staffing, where workers are often deployed at third-party sites and are under the direct supervision of third-party managers, it is even more important to understand and be aware of risk management best practices in the best interests of employees, employers, staffing companies, and other market makers involved in the placement of contract or contingent workers. Sometimes leveraging the power of an employer of record, agent of record, or independent contractor compliance firm like People 2.0 can help your organization to understand apparent risks in your operations, or better yet, absorb this risk and let you focus on core operations.

According to Staffing Industry Analysts, risk management is defined as: “the broad category of activities and best practices suited to minimize, monitor and control the probability and/or impact of event losses.” No matter what industry you are in or industries you serve as a staffing partner, there is some level of risk associated with virtually everything we do. Contingent employment-related risks may include legal risks pertaining to co-employment, resource risk, as well as the safety of human and physical resources. Below are some elements of a company policy or contingent workforce deployment plan that are involved in risk management.

Insurance

Insurance coverage is a key aspect of any comprehensive risk management plan and should include all coverages required to do business in your location and industry. For staffing companies, who may be conducting business across a wide range of industries and states, you should hold workers’ compensation, general liability, crime, professional liability (if applicable), employment practices liability, and some additional umbrella coverage. If you are placing workers in higher-risk industries, such as medical doctors or light industrial workers, then you should also ensure your coverage is applicable to the professionals you place in the locations/environments you need.

Worksite Assessment

Whether it is your own worksite, or a worksite associated with your clients, assessing the risks inherent in a worksite is one of the most critical priorities in an effective risk management program. Worksite assessment includes developing a strong understanding of the general role, responsibilities, and day-to-day operations of the worker in question, their tasks to be performed, if they need to operate machinery, all training requirements, and all personal protective equipment (PPE) requirements. All this information should be formally documented and is vital to classifying workers for workers’ compensation and insurance purposes. Additional aspects of the worksite assessment include photographic work areas, reviewing safety data sheets, reviewing all safety training and safety programs, and reviewing all past injuries, illnesses, and accidents. A plan/schedule to conduct ongoing inspection and safety assurance at the worksite is also put into place.

Record Keeping Requirements

It is an employer’s responsibility to make sure that the way employee records are documented, stored, and communicated must be in accordance with all laws and labor standards. A comprehensive risk management plan will include clear delineations of record keeping responsibilities in a contingent employment arrangement. New legislation and complicated workforce deployment situations can leave an organization vulnerable to liability or government penalties associated with inadequate record keeping. Sometimes relying on workforce deployment experts, like People 2.0, can help you navigate the record and time keeping requirements in your specific state.

Equipment and Safety

A risk management plan makes sure that all personal protective equipment necessary in the workplace is worn always and in accordance with Occupational Health and Safety Administration (OSHA) standards. Under a comprehensive risk management strategy, safety training programs are reviewed and adapted as needed to encourage a safer workplace. Communication protocols for accidents or injuries are also established as part of the plan, particularly in an employment arrangement that involves more than one party.

Implementing a comprehensive and effective risk management strategy touches on just about every corner of your organization’s operations. Understanding the risks of doing business, or employing contingent workers, is only the first step to avoiding potential pitfalls and maintaining a productive work environment. These are just a few of the aspects that make up the art and science of risk management; People 2.0 can help you develop a complete risk management plan as well as the operational processes and training to create a lower-risk work environment.