Human Capital Risk (HCR) risks are known to derail the execution of an organization’s strategic and operational objectives. Of recent human capital risk is ranking 4th out of the 11 identified business risks. The c human capital risk happens as a result of:

  • Complacency
  • Turnover
  • Occupational fraud
  • Catastrophic workplace events
  • Negligent hiring or retention

The human capital risks include the following key risks;

  • Skills shortages,
  • Succession issues,
  • Loss of key personnel
  • Selection of the wrong person
  • Absenteeism
  • Presenteeism
  • Unsatisfactory performance
  • Accident/injury
  • Legal compliance issues
  • Fraud
  • Loss of knowledge


Applying a risk methodology to the management of human capital in an organization addresses these (and other) issues. As part of the risk assessment process, organizations will need to be able to measure the impact of their human capital risks, and to evaluate the benefits of various risk mitigation strategies. In addition, by including the risks associated with one of their major assets, human capital, in their other risk assessment processes, executives and boards will have a more complete view and understanding of the risks across the organization and their relative importance.

The above therefore calls for a formal process for HCR management. The existence of poor communication between Enterprise Risk Management (ERM) and the Human capital (HC) functions further complicates the HCR management. The program of HC risk management should include the following;

  • Identification of key risks.
  • Assessment of key risks.
  • Evaluate the impact of the key risks.
  • Mitigate the impact of key risks.
  • Monitor the changing risk picture.

Our team of experts is available to advice you on the risk management strategies which will ensure HCRs are minimized through appropriate risk mitigation strategies.

For further information on the above and other programs, please feel free to contact us