AICPA Insurance Programs

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As firms like yours are taking on a holistic approach to employment practices risk management, many are realizing that what sets successful businesses apart is the degree to which their business strategies are aligned with their people strategies. And, it's the degree to which all employees, not just senior management, are fully committed to understanding a firm's overall risk as it relates to their employment policies and procedures. The higher level of commitment by employees contributes to reducing the risk of your firm incurring an employment practices liability claim.

There is no single approach to implementing a risk management program. But, more and more, firms are finding that focusing on physical risks is not enough. A firm must consider the people aspect of its business, and realize that it's employee engagement that plays a key -- and often overlooked -- role in shaping its culture and ensuring the effectiveness of its risk management initiatives.

By and large, organizations that manage risk well, manage all else well, too -- their human resources are more effective and efficient, and the overall culture is more positive. Accordingly, fully committed or engaged employees who understand their firm's risk management goals are more prepared to meet the short and long-term priorities of the business. And, employees who share in a responsibility for implementing policies and procedures, can more readily help reduce the chances of litigation - and make a positive impact on your firm's overall culture.

A key to getting employees engaged in your risk management process is to involve them in every step. Engaged employees feel part of a team when they share in the decision-making. As a result, they can positively impact your firm's culture by:

• Moving to a proactive, rather than reactive focus
• Reinforcing decision making
• Enhancing accountability and trust
• Making better use of time and resources
• Improving teamwork
• Demonstrating confidence in the firm's processes
• Developing solutions and metrics to better manage risks
• Shifting the thought process from "blame," to "identify and manage"
• Moving from the perspective of "how does this affect my area?" to "how does this affect the firm?"

When you take a holistic view of managing your firm's overall risks, you may first consider taking some steps to fully engage the staff at your firm. By answering some initial questions, you will have a better sense of your firm's culture and general level of employee commitment and, from there, you can begin to develop concrete action plans. Such as:

1. Consider your firm's current level of employee commitment to and understanding of risk management as it relates to employment practices.
   • Do employees understand what constitutes risks with regard to services offered by your firm?
   • Do they trust the leaders and share their values and concern for risk management?
   • Do employees feel a sense of responsibility to help supervisors and your firm reduce risks and improve its reputation?
   • Do they strive to improve their skills and make sacrifices to help their group?
2. Assess the firm from the employees' perspective.
   • Do employees feel that you are interested in involving them in decision-making and building a sense of loyalty and dedication?
   • Do they know, understand and believe in your firm's mission and vision? Do they understand their role in achieving these things?
   • Do they know and understand your firm's risk management objectives? Do they know and understand their role in achieving these?
3. Determine which work environment issues have the greatest impact on employee commitment.
   • How are employees affected by internal and external factors in the workplace?
4. Develop quantifiable, strategic and locally-based action plans.
   • Choose key risk management issues based on business and people needs and keep them in balance.
   • Communicate risk management issues and employee practice policies and procedures to all staff. Relate activities to business needs and goals.
   • Push responsibility for developing action plans to all levels.
5. Evaluate your progress.
   • Assess the relative success of each action plan. Did it solve the underlying problem?
   • Assess the effect of each plan on bottom-line business metrics.
   • Measure improvements in employee commitment and work environment. Identify new issues.
   • Communicate results to those involved in the process.
   • Hold yourself and all involved accountable for getting engaged and following through.

Next, to begin helping your employees at all levels get engaged in your risk management and human resource initiatives, develop an education and introduction plan. Here are some steps to include:

• Emphasize the importance of "doing the right things," as opposed to doing things right.
• Create job descriptions that not only define what risk management functions require, but how they should be performed, including the processes and patterns of behavior related to exemplary performance.
• Make sure risk management policies and procedures and overall strategies are clearly articulated and understood.
• Help managers create alignment between their team's risk management goals and larger organizational goals.
• Introduce and monitor a process that ensures rewards are directly tied to achieving risk management objectives.

Engaging employees is an ongoing, cyclical endeavor, in which you must continually balance business objectives and people impact. All in all, it's a process that you can foster -- linking together individual commitment and the objectives of your firm. Although initiating this change may seem daunting at first, the improved culture will help protect your firm, and improve service to your clients.