0 2 mins 4 weeks

People risk refers to the potential for losses or negative outcomes stemming from human behavior, decisions, and interactions within an organization. This type of risk assessment focuses on identifying, analyzing, and mitigating the risks posed by employees, managers, and other stakeholders.

In risk assessment, people risk encompasses several dimensions, including human error, fraud, misconduct, and inadequate personnel management. Human error might involve mistakes made due to insufficient training or oversight, while fraud and misconduct can arise from unethical behavior or intent to deceive. Poor management practices, such as ineffective communication, lack of leadership, or failure to enforce policies, further amplify people risk.

Assessing people risk involves several key steps:

Identifying Risks:

Recognizing areas where human factors can lead to negative outcomes. This can include reviewing past incidents, conducting employee surveys, and analyzing job functions.

Analyzing Risks:

Understanding the likelihood and impact of identified risks. This typically involves evaluating the potential consequences of human errors or unethical behavior and the probability of these occurring.

Mitigation Strategies:

Implementing measures to reduce people risk. This can involve enhanced training programs, stringent hiring processes, robust internal controls, and fostering a positive organizational culture.

Monitoring and Review:

Continuously tracking the effectiveness of mitigation strategies and making necessary adjustments. This step ensures that new risks are identified and managed promptly.

Effective people risk assessment not only safeguards an organization against potential losses but also contributes to a healthier workplace environment. By prioritizing the human element in risk management, organizations can enhance resilience, boost employee morale, and maintain a strong ethical foundation.