Owning a business is risky enough. You invest lots of personal capital, countless hours, and trust that the people you have hired are competent and looking out for your company's best interests. That requires developing a bulletproof risk management strategy.
Instead of placing this extremely complex task on your internal team, you can partner with a vendor who can provide you with risk management consulting and use their risk management experts to help your business remain compliant and safe.
What is Risk Management?
Risk management is a process by which you identify, test, and prioritize risks to your company's assets, people, and profits. These threats to your business can come from many different angles: competitors, market changes, accidents, natural disasters, legal liabilities, or strategic management errors.
For example, if your small or mid-sized business makes a new hire to work in construction, you need to provide them with adequate training. This requires a new-hire training program that encompasses legally needed regulations.
When an employee suffers an injury on the job, government agencies and insurance companies will see if the employee was provided proper training. Without a comprehensive training program, they may find that your company failed to provide adequate training, resulting in costly fines to your company.
5 Reasons to Outsource Risk Management
Using an outsourced risk management service, you can help to minimize the risk your business faces. There are five key benefits your company will see.
Hiring an internal employee dedicated to risk management processes costs much more than outsourcing to a third party. While your internal team may have the best intentions, they may not be skilled experts in the field of risk management. Delegating this complex task to an unskilled employee is outright dangerous.
Partnering with a third party gives you access to their risk management experts. Part of their role as risk experts is to keep your business compliant. They do this by reviewing and analyzing your business practices and offering guidance to help you make specific changes that will further minimize your risk.
Risk management professionals have experience creating world-class safety programs. Ensuring your employees understand safety regulations and best practices will help keep them safe on the job and minimize your risk when accidents do happen. Without outsourcing your risk management to experts, your company is at greater peril for compliance violations and fines.
Federal, state, and local governments regulate businesses of all sizes and industries. The construction industry is one of the most highly regulated. Ensuring your business is compliant with Occupational Safety and Health Administration (OSHA) regulations is a full-time job in and of itself.
Outsourced risk management experts know how to keep your business compliant with OSHA regulations, among other risk management issues. Instead of relying on one in-house employee, you gain access to a team of experts with decades of experience who can help keep your business compliant and profitable.
By outsourcing risk management, you reduce the stress and workload on yourself and your internal team. This frees you up to focus on your core business needs — growth and profitability.
When your internal team sheds the time-consuming and stressful duty of risk management, they can focus on building a company culture that helps you attract and retain top talent in your industry. Increasing your employee engagement and reducing turnover creates more loyal employees and increases your profits.
Internal employees have a vested interest in keeping the boss happy. Many employees have trouble speaking truth to power and would instead provide rosy information to secure their job.
A third-party risk management expertise will provide you with direct and blunt analysis. This information will give you a clear picture of where your business might be vulnerable. They will then provide you with guidance on how to reduce your vulnerability and increase the effectiveness of your risk management processes.
Your outsourced risk manager's job is to keep your business secure. They will not hesitate to give you the information and data you need to hear, even if it does not paint the rosiest of pictures.
Mitigate Risk with PEO Outsourcing
While often overlooked, if properly attended to, risk management processes can help keep your business compliant, avoid costly and embarrassing fines, and keep your employees safe.
Outsourcing risk management is an excellent way for your business to gain access to experts whose sole goal is to keep your business compliant with complex regulations and other risks your business may face. The most comprehensive risk management outsourcing solution is a Professional Employer Organization (PEO).
Partnering with a PEO gives you the confidence that your risk management processes are being handled by dedicated experts who have your company's best interests at heart. Managing risk is time-consuming, costly, and ripe for errors and mistakes.