Risk Management in the Employment Process

1. Managing Employee Risk
Hiring
Training
Monitoring
Review /
Enhancement

2. Risk Management Tips - Employment
1. Sound hiring practices. Hiring new full- and part-time employees is a risk area for business owners.
Employers should evaluate current hiring practices when recruiting new employees including establishing
written policies and procedures for conducting and verifying potential employee’s background, credentials,
experience and education as well as skills testing and interviewing. Documentation of hiring practices and
periodic reviews assists in enhancement of the hiring process as well as auditing the process to ensure
compliance with federal and state laws.
2. Orientation and training. Successful integration of a new employee and risk of error and loss decreases if
there is a focus by the employer on orienting and training all new and existing employees in the Company’s
policies and work practices and procedures. The formality of the training will vary based on the complexity of
the task, but written policies and procedures as well as individual desk handbooks are encouraged to clearly
identify the workflow process and the expectations of performance for each employee.
3. Active supervision. Supervising and auditing employment practices and employees’ workflow processes as
well as evaluations for individuals at every level of the Company is a key component of mitigating risk and
ensuring compliance with the employer’s workplace laws, regulations, policies and procedures. It also assists
in identifying policies and or procedures that are ineffective and or inefficient. Holding employees accountable
means objectively identifying employees’ performance, but also reviewing and enhancing the processes as new
laws, products, systems and technologies are introduced. Encouraging and responding to employee feedback
increases productivity, creates and ensures a positive workplace environment.
4. Loss & Accountability. Employers need to ensure that every employee understands that there is a process in
place in the event there is a loss or problem. The process should encourage employees to report problems or
losses so that the Company can mitigate the risk and comply with all laws and regulations relating to the
problem or loss. Accountability should focus on (i) allocation of responsibility, (ii) identification of what
action should be taken to avoid or mitigate future losses and (iii) ensuring there is an objective and equitable
process in place that complies with state and federal laws.