Human Resource Risk Management Concepts

Abstract: The German Supervisory Board as intended by the German stock corporation act should not only supervise the Executive Board, but also be able to advise and steer it (not in day-to-day business, but strategically). As part of this task, the Supervisory Board needs adequate information on the risks the corporation faces, in all areas of business, e.g. finance, marketing or human resource. As strategic management is a core responsibility of the executive board and supervisory board and personnel risks are an essential part of strategy development and execution, information on the prevalence and severity of personnel risks are essential for a sound debate on strategic issues in the Supervisory Board. Like all risks, the management of personnel risks must be an integral part of a cyclical and company-specific strategy process. Currently, however, the area of human resource risk management plays only a minor role, which may be due to the supposedly comparatively more complex quantifiability of personnel risks or the complexity of human factor interactions. But risks in the domain of human resources are not only an important part of risk management because of current regulatory developments e.g. in the area of corporate social responsibility (CSR), but also because of the important role human resources play at companies in general. Personnel risks cannot be seen independently of a corporate strategy as humans execute them: Every strategy risk is linked with human resources.We therefore have analyzed existing human resource risk concepts with the aim of how such concepts could be used in Supervisory Boards especially for members of the employee representation to be able to advise and steer the Executive Board. We found a number of existing studies dealing with personnel risks from different angles and a few concepts for managing personnel risks. We also found that evidence is scant for personnel risks as a whole category, not only focusing on one area like motivation or health in general, but more broad categories like management risks or adaption risks. The aim of this paper therefore is to first provide a rationale for human resource risk management, second to provide an overview on existing studies and concepts in this field and third to summarize the various concepts into one for the potential usage in the Supervisory Board. This paves the way for more empirical studies on personnel risks and their relation to strategic management or enterprise risk management.

Keywords: Personnel risk, Human Resource Risk Management, Risk Management

DOI: 10.54941/ahfe1002796

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