Why HR can be a risky business and how to mitigate those risks?

Human resources is about people. In reality, it’s a business we all understand. The formula is relatively simple – happy people leads to happy customers which leads to better profits. Simple to understand, yet as most HR leaders will tell you, very difficult to implement. The reason – well, we are dealing with people and people are complex and situations arising from people are often even more complex. Nothing is straight forward when dealing with people.

As an HR practitioner I often found myself in situations where my experience and dealings with the people I worked with raised a number of red flags. Most HR people are able to point out with relative accuracy who they feel is a flight risk or which teams are at risk from a bad manager or which members of staff are less engaged than others. The challenge in these situations is empirical proof and can often lead to a credibility crisis.

Credibility and trust are the cornerstones of any HR department. The role of HR is to ensure the wellbeing of their people and cultivate a safe working environment as only in such a work environment can people thrive. In most cases, practitioners are able to use their wisdom and experience to manage situations before they reach a crisis point. There are cases however, especially when the members of staff involved are perceived to be influential due to their position, earning potential or tenure within the company, when things can become quite complicated. As with any people situation, it’s never clear cut.

I have often wished I was working in finance where numbers would guide my arguments. Numbers never lie and are universally understood. There is a clear black and white with numbers and arguments based on them gain instant credibility. It’s very clear cut. With people one often inhabits the grey zone and questions such as credibility, objectivity and bias hang over every situation like a dark cloud. This often leads to anxiety inducing situations that even the most seasoned HR professionals find challenging. In many cases it can prejudice HR to take a hands-off approach to any situation that in any way challenges the status quo or presents a dilemma.

This is when analytics and statistics can help build a case – free from bias and prejudice. Numbers can offer a representation of what is going on in a clear and demonstrable way. Attrition rates on particular departments is a red flag and will strongly indicate that there is something not quite right with particular managers. Engagement surveys will clearly point out the red flags that need to be addressed. Vacation leave and sick leave analytics will immediately raise the red flags in terms of abuse, burn out and stress which directly impacts the engagement of staff and performance of the company.

Analytics can sometimes be quite daunting. HR professionals are used to dealing with words not numbers. Yet a good set of analytics can not only boost the credibility of HR but allow for an objective and unbiased assessment of challenging people situations. Used well, analytics in HR can be as powerful in terms of information as a P&L statement. Let us not forget that the highest cost to any business is their wage bill. People matter. Understanding your people matters more.