Employment risk management – what can Owners, Directors and Senior Managers do?

Being a business owner, Director or member of the Senior Management team has never been so challenging. Not only are you required to navigate the impact of the coronavirus, the economic downturn and the continual expectations to pivot and innovate, you must do it all whilst being a good corporate citizen and an employer of choice with an engaged, productive and progressive workforce.

If these expectations were not enough, the increased risks of fines and prosecution continue to grow. This begs the question then, what can be done to manage risks? Of course, throwing your hands in the air and giving up, or doing an academy award winning impression of an ostrich is not the answer. The following are 3 steps that business owners, Directors and Senior Management teams can implement to manage employment risk while importantly increasing employee engagement.

Workplace harassment including sexual harassment

Robust workplace policies are necessary and a good place to start, but they are just a start. Employee education and effective safe reporting mechanisms are also needed. Even more importantly, Owners, Directors and senior employees must model the appropriate behaviour and must act when appropriate. The conduct you walk past is conduct you condone. Employees take their cue from their leaders, and therefore risk management is best served by leaders ensuring their conduct is beyond reproach. Where employees raise concerns, such concerns must be taken seriously and dealt with compassionately but comprehensively. Not all concerns will be founded, however this should only be the outcome after a fair and comprehensive process. This will send a clear message to your employees that you are an employer who genuinely takes these matters seriously and will treat all complaints appropriately.

Workplace Health and Safety (WH&S) and implementing a safety culture

The expectations on Owners, Directors and Senior Managers have increased over time for WH&S, with some States going as far as introducing Workplace Manslaughter offences. WH&S is not just physical safety, but also psychological safety in the workplace.  WH&S today needs to be a shared responsibility. Workplaces that take a collaborative approach to safety are more likely to be successful in identifying and managing risks. This is the case for physical or psychological safety.  Psychological safety is significantly impacted by workplace culture, workplace design and employee engagement. 

The first step in identifying and managing psychological risk is through employee engagement and understanding workplace culture. This can be done in a number of ways, including workplace surveys, focus groups and individual consultation. Establishing a base line for your workplace is an excellent way to identify if you have a psychological safety risk that needs management. Psychological risk is not restricted to occupations which experience workplace trauma, such as emergency services, psychological risk can occur in any workplace where there is workplace culture, structural or systems problems.

Payroll accuracy – systems audit

Underpayment of wages can occur in any organisation. Unfortunately, even unintended underpayments can lead to substantial fines and prosecution. In our experience unintended underpayments far outweigh the rare deliberate choices some organisations make to underpay their employees. However, there are some systemic issues which often lead to underpayments. If your payroll is not configured correctly and/or does not deliver results consistent with your Award obligations, underpayments (or overpayments) inevitably occur. A system’s audit of your payroll can ensure your payroll is correctly set up to pay your employees correctly. A system’s audit however is only effective following confirmation that Award terms have been correctly interpreted and applied.  Interpreting modern awards is not straightforward, adding an extra point of failure in addition to system configuration.

If you would like any assistance with policy development, employee training, Award interpretation or systems audits to maximise the risk management in your workplace, we are able to assist. Please contact our HR Consulting division via the form below or on 1300 200 725.




+61 7 3218 3900

+61 3 9252 0800

+61 2 9922 1166


Author: Cheryl-Anne Laird


Published: 23/3/2021

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