Risk management coupled with engaged employees is a powerful mix.
Employee engagement is regularly seen as a key company priority and is a common senior leadership goal.
It is based on research that shows engaged employees commit longer-term to a company. They embrace its culture, are more productive and through this, contribute to the company’s overall success.
But how does this engagement help in the area of risk management?
Well, while employee engagement is most often seen as a way of helping secure revenue goals, getting projects successfully across the finish line, and other methods of company growth.
It is also a powerful tool in realising the benefits of risk management, namely a reduction in accidents, incidents, failed projects, and the preservation of brand and company standing.
As such employee engagement, when motivated for risk management, is a powerful way to prevent or reduce costs, thereby adding to the company’s bottom line profitability.
An untapped asset valued at more than 50% of your operating budget
In most organisation’s employee costs are 50-70% of the operating budget.
That is with, salaries, taxes, benefits, recruitment, equipment and training & development costs, a good standard metric is 50-70% of the organisation’s budget is related to its people.
As a company asset or investment, that’s a big one to tap into and leverage for risk management within your company.
Also, its one that is probably already being leveraged, through engagement, for the growth of the company – reducing staff turnover, improving productivity and efficiency, retaining customers at a higher rate, etc.
So, broadening its focus to cover risk management should not be too much of an additional management and leadership task
Four keys to improving employee engagement with risk management
These four keys are not different to the standard parts of an employee engagement strategy.
But their use as a broader tool, one that brings in risk management, needs to be considered.
Plus, they may be tools that those charged, at a formal level, with risk management in a company, may not be familiar with.
1. Build alignment through leadership and management
Show employees how they can help make the organisation more successful, through risk management.
Communicate core values and the importance of risk management in updates and reviews, but most importantly through leading by example
Coach and mentor a culture of risk management at the team and individual level, and then acknowledge and celebrate examples of success to reinforce.
The importance here is to get senior management to champion risk management as something that is owned by everyone in the company, not just a department such as Health & Safety.
2. Create proficiency in risk management,
Train, coach and manage the team in knowing what to do.
Define, clearly, what the expectations, skills and competencies needed are, in a framework or roadmap of what is being worked towards, and (most importantly), why.
This extends to, or starts with, the recruitment process.
Sure, you recruit for the role and task, but at the recruitment stage, state the company’s approach to risk management, how it benefits everyone and how it is a key component in the company’s culture and measures of success.
Continue this in the training and development of the team, helping them continue to integrate a culture of risk management into their day-to-day activities and longer-term planning.
Of course, this is a two-way street, as opportunities for training and development are always topping the lists of what employees want from a company to feel engaged and valued.
Finally, support all of this with risk management being part of the overall management feedback process. Be that quarterly (better) or annually (weaker) and making it part of the day-to-day coaching and mentoring.
3. Give employees the tools and resources they need
But as a general rule, you need to give your employees the right tools to do the job, and ideally, the best tools.
A blunt saw may cut faster with an enthusiastic user, than a sullen user, but a sharp saw and an enthusiastic user will get a far better result.
This approach also underlines the goal of employee engaged risk management, that of lowering or reducing costs.
If the right tools, be that software or hardware can reduce time, save on queries, give better insight (again all of what CMS does), then they will provide a return on investment that can be both measured in cost savings, and also by adding to employee engagement as the employees see how effective they can be.
4. Maintain the impetus
Keeping your employees motivated has rewards in itself and is easier to do with an engaged team. But it is also an example of a virtuous circle, as maintaining impetus helps with engagement, and engaged employees drive the need and desire to maintain impetus.
This brings together all the points above – leadership, proficiency, and resourcing – and by keeping them front of mind and actioned, with a focus on risk management, employees will speak up, point out risks, work proactively to prevent incidents, deliver on cost savings, and help with reputation guardianship.
Obviously, you can’t force employees to be engaged, but by working the above strategies, you will provide an environment where engagement can seed, grow, and blossom.
It will then deliver benefits for the company, which can be summarised in seven areas.
Six benefits of risk management and employee engagement
All of the following points can happen without an engaged employee team.
They are unlikely to happen with a dis-engaged employee team, but equally they are more likely to be realised with an engaged employee team.
In essence an engaged employee team gets you there quicker and in a better shape.
They cover basic measures such as costs, long term standing such as company reputation, and internal areas such as employee attitudes and company culture
1. Saves time and money
With a team of engaged employees, risks are reduced, repetitive issues identified and eliminated and from this cost and time savings will be delivered.
Further, as a company’s risk profile improves, medium term to long term savings will be realised in things like insurance premiums.
These savings all go to the bottom line, as £1 saved in a company delivering a good 20% operating margin, is the equivalent of £5 earned in revenue.
2. Helps prevent reputational threats
Many actions or risks involve a potential for affecting a company’s, or its brands, reputation and standing.
If something bad happens, customers, the public and the markets can take a negative view, damaging the company both in the short and long term.
With a culture of employees engaged in risk management, aware of what the negative side of the risk could be, there is a broader assessment of the risk, clearer decision making on the actions, and better planning for mitigating the risk.
This helps eliminate the not uncommon scramble to address the situation and the reputational fallout when things go wrong, of which there are many examples of.
3. Reduces the impact of the unexpected
Most companies don’t like surprises or unplanned events impacting their actions, projects and plans.
With a company-wide attitude of risk management the impact of the unforeseen can be minimised.
This is accomplished by reducing the number of unforeseen events, but also by alerting to their happening.
With an engaged workforce the attitudes of “someone else will spot it”, or “it’s not my place to say”, will be removed and employees will speak up and flag when something is wrong or heading that way.
4. We’re all in this together
Every company faces risks. It is an inevitable part of business and companies, leaders, managers, and individuals are often defined as risk adverse or risk takers.
However, many employees regard risk management as someone else’s responsibility or problem. But, by engaging employees on the benefits of risk management, this can be changed, and a whole ownership of the topic taken forward across the company.
5. Jobs become safer
Health and safety is everyone’s responsibility.
This is obvious in physical work environments such as construction sites, where huge strides in safety have been made in the last decades. But it also applies to the office environment, where risks are less overt, but do have the potential for real harm.
Again, a culture of employee engagement, encouraging all to look after each other, helps minimise risk and keep people safe.
6. Improves internal communication
Communication is oft cited as one of the top five major issues in a company.
No matter the size or structure of the company.
By having an engaged workforce, with a focus on risk management, another channel and reason for communication is opened.
Allowing for more discussion and dialogue both horizontally and vertically, and the breaking of the silo mentality.
The benefits of this will flow into other areas of discussion within the company as the internal networking is established and fed by the risk management dialogue.
While employee engagement is a key leadership and management goal in any company or organisation.
It is mainly desired as an asset that helps with company growth and revenue targets, that is it has an external bias.
However, it is equally valuable when motivated and internally focussed on risk management.
Here it can deliver cost and time savings, reduce the likelihood of reputational damage, and help foster an even stronger company culture.
One that helps further the employee engagement, creating a virtuous circle.
How CMS can help
Our SaaS platform helps organisations take better control of their risk management in the areas of fleet operations and remote worker safety.
If you would like to find out more about how we can help, please contact us using this form or call us on +44 (0)345 241 9449