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How is Risk Management Changing the Way We Hire Employees?

Hiring is a complicated process for most businesses. The hiring process and who you hire are equally important, as both complement each other. Onboarding a new employee has significant effects on your company. While the right hire bolsters your organization, increases productivity, and promotes company growth, the wrong hire can slow productivity, cause conflicts, and probably lead to several lawsuits.

To avoid this, HR and other hiring managers should adopt various risk management strategies during the hiring process. A constant risk management strategy is consulting employment lawyers before making any hire. Other risk management measures that impact the hiring process are discussed below.

1.    Standardized Application Process

Using a standardized application and hiring process is the only way of ensuring that you make quality hires. Besides making the process rigorous and thorough, don’t forget to document everything if an applicant alleges that the process was flawed, has inconsistencies, unfairness, or illegal. Note that this doesn’t imply that you change the application and hiring process. Simply ensure that all measures are applied consistently once the process has been initiated.

2.    Pre-Employment Background, Physical Checks, and Drug Tests

One of the dangers of making new hires is the uncertainty that the new employees bring along. The past of potential hires might be full of significant positives or surprisingly unknown dangers that can affect your business. Therefore, doing the necessary homework is important before onboarding applicants.

Conducting background checks and drug tests can help avoid bad brand reputation and lawsuits brought by third parties after hiring an applicant. Note that these checks and tests should be done according to employment laws. As such, always consult legal professionals before changing the procedures or implementing these recommendations.

Background checks help identify unlawful and risky behaviors of potential hires. This is especially important when filling a position where the applicant will access large sums of money, sensitive information, safety positions, or has direct contact with customers. Common things to look out for include arrests and jail terms related to embezzlement, theft, fraud, violence, and unethical behaviors.

Drug tests are mandatory for several positions, such as law enforcement officers and CDL drivers. Potential hires who fail drug tests or have prior legal infractions due to drug abuse can steal or cause third-party damages while at work. On the other hand, pre-employment physicals help uncover pre-existing ailments or conditions that can affect the employees’ ability to work safely. This saves your business from the costs of covering workers’ compensation claims future.

3.    Employee Handbook

Employee handbooks are essential tools for any organization and crucial to proper risk management. Most handbooks outline the business expectations for anyone applying for a vacant position. It should also outline rewards and possible disciplinary actions that follow unacceptable behaviors. Some benefits of using this handbook for risk management include;

     Introduces new employees to company culture, objectives, and mission.

     Communicates what is expected from employees and leadership

     Outlines key company policies

     Showcases the company’s benefits and allowances package

     It is a requirement by federal and state laws

     Helps in defending your business against employee claims

To avert hiring risks, employers should tailor their handbooks towards their specific niche. The handbook should also be regularly reviewed and updates communicated to all employees.

4.    Managing Temporary, Part-Time, and Volunteer Employees

Poor classification of part-time, temporary, and full-time employees is among the common legal issues that small businesses face. Factually, part-time, full-time, and temporary employees cannot be treated equally with the same benefits. That said, most businesses face legal infractions because of this confusion. Therefore, hiring managers should consider the following to avoid possible risks after hiring;

     Train temporary and part-timers as aggressively as full-time employees since they handle the same tasks, only for a shorter period.

     Hire temporary and part-time employees with the same scrutiny as full-time employees. This includes background checks, drug tests, and physical checks.

     Provide an employee handbook to part-timers and temporary employees. However, their versions should include adjustments that suit their specific assigned tasks.

     Include part-time and temporary workers in your worker’s compensation insurer contract according to workers’ compensation laws in your state.

Note that handling part-time and temporary employees significantly vary from volunteers. Volunteers don’t present many risks to your business since they have restricted roles. Therefore, they might not require an employee handbook and rigorous training. Besides, they aren’t included in worker’s compensation cover. As such, consider purchasing a medical insurance policy that covers injuries and other risks that volunteers face during their period of service.

Bottom Line

Businesses should take all the steps necessary to avoid lawsuits. Instituting proper risk management measures, especially when making hires, can help avert such complications. As such, ensure that you develop an employee handbook, sexual harassment policies, safety protocols, and other guidelines that will steer your business efficiently while avoiding future legal problems. Without a doubt, these measures significantly affect employee hiring and termination.



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