With business growth come challenges, rewards, gratification … and, inevitably, risks. Your success depends on your ability to successfully identify, minimize and manage them.
Here are five employment risks you should strive to reduce in order to stay profitable and competitively strong for the long run:
- Weak Operations Compliance
You need to prioritize areas with the greatest legal exposure and highest resource demand. Then, consider streamlining, automating or outsourcing related activities.
- Outsourcing reduces liability and improves the focus of resources on your core competencies. It can also help you capture opportunities that you may otherwise miss. For example, it may be beneficial to outsource health benefits or your employee savings or retirement plans.
- Failure to Build Your Operational Infrastructure
You may be so centered on your company’s ability to produce and meet targets today that you overlook the need to build an infrastructure to sustain that growth over time.
- Operational infrastructure refers to the systems that support your company and its growth. These include work procedures, communication channels, decision-making, information processing, planning, performance management, rules and policies, goals and metrics, rewards and recognition, staffing, and training and development.
- Don’t confuse infrastructure with overhead. Infrastructure is the operational components required to successfully deliver your product or service to market, care for your customers, generate revenue, and sustain competitiveness.
- Declining Quality
Product and service quality can become a risk factor if there is a prolonged lack of attention to your operational infrastructure – and the collateral damage to your business will be immediate and potentially devastating. In short, you need to ensure that your customer needs are not overshadowed by your growth needs.
- Focus on profitable growth versus “growth for the sake of growth.” Educate your employees that it is five times more expensive to land a new customer than it is to increase sales to an existing one.
- Inability to Capture Data
This risk factor encompasses inefficient data collection, slow decision making and poor performance management – from top-level corporate results to individual employee productivity.
- Remember: What gets measured gets done. Keep measurements simple, and identify and zero in on your company’s key success factors. Then, once you streamline processes for maximum efficiency, integrate your systems to capture the data you need.
- Lack of Due Diligence
Create a robust due diligence process and team – and stick to them.
- You can use your due diligence team as a developmental assignment, but make sure there’s a reasonable continuity to it. Assess people and cultural match issues. Weaknesses in this regard are the leading reason why most mergers and acquisitions fall short of performance expectations.
When it comes to employment risk management, you don’t have to go it alone. Lyons HR, an ESAC-accredited and IRS-certified professional employer organization (PEO) can help keep you compliant, relaxing your risks and protecting your most valuable assets. Contact us today to learn more.