Employees are the weakest link in enterprise risk management. While applying risk management across your company’s operational setup, human resources should be a critical focus area. Risk management in human resources helps you to anticipate potential risks, implement solutions for combating them, and ensure they don’t recur.

Organizations with an HR risk management plan can recruit employees who fit their skill requirements and values easily. Moreover, the onboarding process will also get streamlined, eliminating issues in the screening process, contract issues, and biases in recruiting employees. Moreover, implementing HR risk management results in higher employee retention rates. Employee turnover is in itself a risk, but it’s preventable.

As we dive deeper into mitigating risk and creating a risk register, make sure to keep in mind that every state and country has its own laws and regulations. 107 countries enacted laws concerning data privacy rules. Before creating a risk register for your company, look up any local and federal laws to ensure compliance. 

hr risk register
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The Benefits of Creating HR Risk Registers

An HR risk register enables you to prevent or proactively deal with challenging employee situations. Here’s how it ensures the well-being of your team and organization:

  • Provides a Proactive Approach to HR Issues

Recording potential risks help you resolve them before they become full-blown threat events. The proactive approach to HR risk management allows you to navigate the risk landscape better and adapt to future risks quicker.

  • Regulatory Compliance

It’s easier to comply with HR-related regulations if you map out the risks to be wary of. Besides, as the weakest link in your regulatory chain, employees are vulnerable to risk. A risk log helps you implement a robust compliance framework, thus minimizing legal issues. The United States does not currently have any law that solely focuses on data privacy, but multiple organizations do require it, such as HIPAA, FCRA, FERPA, and others.  

  • Preserves the Organization’s Reputation

Without a risk register, minor issues can quickly escalate into notable conflicts that portray your organization poorly. The registry enables you to document employee-related issues and address them early.

Areas of Risk in HR

HR practitioners must watch out for the following risks:

Workforce Risks

Hiring and onboarding new staff poses a challenge to both small and large organizations. Employee retention, workplace conflict, and poor employee engagement can prevent an organization from thriving. An HR risk management strategy should focus on addressing such issues before they become more perverse problems. 

Data Management

Data privacy and cybersecurity are risk areas for all organizations in today’s highly-regulated corporate landscape. Every organization needs a data policy, which should outline the management of employee data collection. 

Furthermore, employees who handle sensitive data should be held to high standards. Breaches and misuse of personal data can leave your company vulnerable to costly lawsuits and other ramifications. HR risk management primarily entails ensuring sensitive data is handled securely and used appropriately. In a 2021 study, researchers discovered that the average cost of data breaches is $4.24 million per incident. It’s more important than ever to ensure your data management process keeps all data safe. 


Your organization’s HR policies and activities must match regulatory requirements. Nonetheless, you can only stay on top of HR compliance by keeping yourself apprised of labor and workplace safety laws. That could entail ensuring that employment contracts comply with relevant regulations and statutes.

Ethical Risks

HR departments play a critical role in ensuring ethical standards get upheld by employees. Doing so goes a long way in eliminating the risk of employee-employer disputes. The ethical policies you may want to maintain include:

  • Equal opportunity recruitment.
  • Providing a non-discriminatory workplace.
  • Impartial termination procedures.

Compensation and Benefits

Fair remuneration should be maintained for everyone working at your organization. The HR department should play a critical role in balancing the organization’s financial interests and remuneration packages for employees. It’s equally essential to maintain pay equity to ensure compliance with regulatory requirements, lest employees feel they are treated impartially.

Learning and Development

The HR department should ensure the organization hires and maintains staff with the appropriate proficiencies. Conversely, employees will want to grow in their careers by broadening their skills. Although learning opportunities are primarily based on competency needs and organizational capabilities, HR teams must be at the forefront in providing such opportunities. Limiting who can access these opportunities may seem prejudicial to employees who get excluded.

How to Create an HR Risk Register

Although each organization has unique HR risk management rules, procedures, and policies, creating an HR risk register is similar across the board. When creating an HR risk register, you may want to include the following ten essentials:

1. Risk Identification Numbers

One of the most critical components of a risk register is the risk identification number. It organizes your HR risks into specific categories and helps your organization to monitor multiple entries and responses. You can create risk identification numbers using alphanumeric codes or a traditional numeric system. With a risk identification number, it becomes easier to identify risks quickly by merely scanning the log.

Before numbering your HR risks, it’s best to assess them and determine potential mediation actions. While at it, ask yourself these critical questions:

  • What is the frequency or probability of the risk occurring?
  • Is the risk preventable?
  • What are its potential consequences?
  • Can the consequences be minimized?

2. Risk Descriptions

This component of the HR risk register explains the nature of your risks and provides additional information that could help you define the risks better. The additional information can include risks related to consumer markets, costs, service or product quality, technology, and company performance. Typically, risks become events as a consequence of projects failing.

Assessing ROI and undertaking continuous risk assessments can provide a clear picture of how feasible your projects are and the risks therein. Suppose an organization decides to install a new HR system. It can potentially disrupt employee services, especially if the installation takes time. Employees may be left confused about how to navigate the new system. That’s despite the fact that the new software got installed to streamline HR matters.

3. Likelihood of Risk Occurrence

Identifying and describing your HR risks alone can only help so much when you’re looking to mitigate them. In this regard, go a step further and gauge the likelihood of risk occurrence. A scale with numerical indicators implying high, medium, or low will help you assess the possibility of risk occurrence. Also, remember that the likelihood of risk occurrence can vary based on your team’s resources and capacity.

For instance, it’s easier for a leading corporation with considerable funds and expertise to prevent HR risks. Conversely, smaller organizations may not have the expertise or resources to manage some HR risks. Thus, it’s no surprise that such companies outsource HR risk management.

4. Potential Impacts of a Risk

Your HR risk register also needs to highlight the potential impacts of the employee-related risks you face. The possible impacts of risk often affect an organization’s performance and finances but can extend to employees, investors, customers, and other stakeholders. While creating the risk register, everyone beyond the HR department needs to get involved. It will help you gain feedback and get a clear picture of the potential impacts of your HR risks.

5. Risk Intensity

Effective HR risk registers highlight the intensity of the identified risks. This is done by assessing the likelihood and potential effects of risk. A higher likelihood translates into higher intensity. Such risks should get a higher intensity score.

Risk intensity expresses the significance of risk plans and enables HR practitioners to prioritize HR risk management strategies accordingly. You can classify risk intensities using high, medium, or low or create a measurable representation of each risk’s intensity.

6. Preventative Actions

Preventative actions are a critical component of a risk register. They outline the measures you intend to take to prevent the risks from occurring. It could be risk acceptance, transferring the risk to your insurers, or avoiding risk in the first place. Remember that HR risks can be positive or negative. Either way, outlining preventative actions will help prevent the risks from impacting your organization negatively.

7. Contingency Plans

A contingency plan seeks to address the effects of risks when they become threat events. It focuses on mitigating the impact of HR risk consequences on your organization’s productivity and teamwork. A contingency plan is particularly helpful when responding to emergencies since they prioritize your team’s well-being and safety.

8. Progress Updates

The HR risks you face change by the day, but there’s no better way to plan for your risks than updating your HR risk management strategy. That explains why progress updates should be part of your HR risk register. Monitoring your HR risks and noting your progress in the risk register helps you prepare for potential hazards and respond to them as they arise.

If a risk occurs, progress updates in the HR risk log will help you monitor your contingency plan’s success levels. In doing so, HR managers can provide progress updates while reviewing risk registers at the department level.

9. Risk Status

After noting all details regarding your organization’s HR risks and creating a preparation plan for them, you should designate risk status in the register. It could appear as demarcations like “waiting,” “open,” “in progress,” or ”closed.” These designations highlight the urgency of each risk and how best to respond when they morph into threat events. It also helps you track the risks you’ve handled in the past and determine how best to handle them if they recur. 

10. Register Reviews

After creating HR risk registers for your organization, ensure they get reviewed regularly. Risk registers can only function as intended if HR teams review them after each project cycle. It will allow for better HR risk management and streamline collaboration between teams.

Key Takeaways

Today’s business ecosystem is highly dynamic and volatile. HR risk management, in particular, has become more essential than ever. Nonetheless, your HR department can only keep up if it has risk registers that enable it to approach issues proactively before they cause business disruptions.

HR risk logs should be a critical component of your organization’s risk management plan, regardless of its size and industry. It helps you monitor and prevent potential risks more effectively while mitigating the potential impacts of threat events. Furthermore, a risk log allows HR managers to effectively manage employees involved in your organization’s risks and make better hiring decisions.