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THE NATIONAL STANDARD ON HR RISK
MANAGEMENT
Marius Meyer, CEO: SABPP
14 October 2015
@mariusSABPP@SABPP1
HR Risk Management: It is all about
people factors
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.
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%.
Risk / Readiness Profile
468 HR Leaders developing
HR Standards for South Africa
HR Standards Files
13 standards (2013) 19 standards (2014)
BUSINESS STRATEGY – HR BUSINESS ALIGNMENT
StrategicHRM
TalentManagement
HR RiskManagement
HR ARCHITECTURE
I
HR VALUE & DELIVERY PLATFORM
Work-force
planning
Learning&
Deve-lopment
Perfor-manceMana-
gement
RewardWell-ness
ERM OD
HR Service Delivery
HR Technology(HRIS)
Prepare
Imple-ment
Review ImproveHR MEASUREMENTHR Audit: Standards & Metrics
H R
C O
M P
E T E N C
I E SSABPP HRM SYSTEM STANDARDS MODEL
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)
Do you manage HR risk?
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)
HR Risk?
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
BUSINESS STRATEGY – HR BUSINESS ALIGNMENT
StrategicHRM 4.5
TalentManagement
4.1
HR RiskManagement
4.1
FUNCTIONAL & CROSS FUNCTIONAL HR VALUE CHAIN
HR VALUE & DELIVERY PLATFORM
Work-force
Planning 4.4
Learning5.8
Perfor-mance
5.0
Reward4.3
Well-ness 5.2
ERM5.7
OD4.7
HR Service Delivery
5.9
HR Technology(HRIS) 5.1
Prepare
Imple-ment
Review ImproveMEASURING HR SUCCESS 4.2HR Audit: Standards & Metrics
H R
C O
M P
E T E N C
I E SSELF RATINGS – OVERALL AVERAGE
BUSINESS STRATEGY – HR BUSINESS ALIGNMENT
StrategicHRM 6.1
TalentManagement
4.3
HR RiskManagement
6.8
FUNCTIONAL & CROSS FUNCTIONAL HR VALUE CHAIN
HR VALUE & DELIVERY PLATFORM
Work-force
Planning 6.3
Learning6.2
Perfor-mance
6.1
Reward6.9
Well-ness 5.9
ERM6.5
OD5.6
HR Service Delivery
5.4
HR Technology(HRIS) 5.1
Prepare
Imple-ment
Review ImproveMEASURING HR SUCCESS 4.3HR Audit: Standards & Metrics
H R
C O
M P
E T E N C
I E SAUDITED RATINGS – OVERALL AVERAGE
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
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
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
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.
SUSTAINABLE PERFORMANCE
“Whether a company sustains exceptional performance depends first and foremost on whether it continues to
have the right people in power.”
Conclusion
The National HR Standards have changed the
face of people management in South Africa.
The HR Standards usher in a new period of
institutionalising people management as a
best practice for sound HR professionalism
and business impact in organisations.
HR Risk Management is one of the 3 strategic
HR Standards. Best wishes identifying and
managing your HR risks.
We set HR standards!
[email protected] or [email protected]
(Professional Registration)
[email protected] (CEO office)
[email protected] (CEO & Strategy inputs)
[email protected] (COO)
[email protected] (HR Audits)
[email protected] (Research)
[email protected] (Learning & Quality)
[email protected] (Events & HR Standards files)
Website: www.sabpp.co.za Blog: hrtoday.me
Office: 8 Sherborne Str, Parktown, South Africa
Tel: +27 11 045-5400 Fax: 011 482-4830
