While every business has its own risks, these risks are also opportunities, points out Brian Dershaw, a partner in Taft Stettinius & Hollister LLP’s Labor & Employment group, during our conversation with him on the topic of risk mitigation and the tie to employee engagement and culture.

Brian Dershaw talks risk mitigation

Photo Courtesy of Taft.

Dershaw has broad experience serving as employment and labor counsel and outside general counsel for companies of all sizes, across a variety of industries. He’s appeared in state and federal trial and appellate courts in discrimination, harassment, retaliation, wrongful discharge, non-compete, trade secret, and contract litigation.

Dershaw also works with clients to help prevent, investigate, respond, and manage the people-side of compliance efforts, including in the areas of wage and hour, employee classification, cyber security, and data privacy. In part one of our series, we focus on what we learned from Dershaw about some of the biggest business risks for the new year. Here are 3 of those risks.

1. Leadership That Isn’t Listening

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“The more a company understands their workforce, the better off they will be in terms of managing risks,” says Dershaw.

Dershaw explains that employers who look to better understand their employees are the ones who can successfully build trust in their leadership through that process.

The problem for some companies is that they’re holding on to methods of gathering and providing feedback that aren’t effective in today’s work environment. An example of an ineffective practice that far too many companies are still using is the yearly employee review, which opens many companies to unnecessary risk.

Today’s workplace moves too quickly for 12-month goals or feedback to be as useful as it could be. For example, more project-oriented workflows and three-month and even two- to four-week assessment cycles are more appropriate. Companies are expected to react to the market more quickly than ever; more frequent feedback and communication about employees’ work can help fine-tune work more efficiently and more appropriately match the pace of today’s working world.

“Some companies are using their performance appraisal as a rubber stamp,” explains Dershaw. “Let’s say your company lost a huge client, and you know you have to lay several people off. This company may respond, ‘We’ll use our review ratings as a factor for employee selection, and layoff those with poor reviews.’ Then they look through and realize that everybody got the same review,” says Dershaw. “Or there is no way to discern performance variations when each manager views the process differently. As such, yearly performance reviews don’t always provide enough reliable information for this type of decision-making,” he explains.

Adopting more frequent and less-invasive check-ins with teams can also help leaders better identify issues before they become a large liability. It helps to encourage problem-solving within the culture and autonomy, it helps to set more clear goals, and it develops a more transparent culture where employees feel that the company is investing in them.

“Performance management” as we know it has changed: in 2017, look to how leaders can seek feedback, listen, train, and equip talent to do their best and to be connected to their work.

Bringing up this idea only once per year is not going to be enough to grow and retain your people—or to discover potential issues and risks along the way.

“Employees want to be ‘empowered’ and ‘inspired,’ not told what to do,” reports Josh Bersin, Principal and Founder of Bersin by Deloitte in his recent report, Predictions for 2017: Everything is Becoming Digital.

“They want to provide feedback to their managers, not wait for a year to receive feedback from their managers. They want to discuss their goals on a regular basis, share them with others, and track progress from peers,” he writes.an engaged culture can mitigate risk

“Think about the performance appraisal and review process as something that should be a tool for your company. As a tool, it can be used to improve that employee’s results and experience or to begin the cycle of that employee leaving the company for another opportunity,” explains Dershaw.

“When you make decisions, whether it’s for that individual person, or whether it’s to restructure your whole organization, you actually will have a tool that promotes an objective approach relevant to your organization, on an ongoing basis, with Talmetrix.”

Tools like Talmetrix are built so that this process of collecting and gathering data can be documented, as well as the decisions that were made based on that information. That alone can be evidence that reduces risk for an organization.

“If you’re tasked to be a decision maker in your organization, and you’ve got this objective study and data demonstrating who is engaged and how they’re engaged, Talmetrix has given you a valuable tool to help you make your decision. You have potentially mitigated your risk because you will be able to show just why those decisions were made,” says Dershaw.

2. Threats to Company Reputation

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The more that employees feel empowered and connected to their work, the less likely they are to speak negatively about the company where they work.  In fact, per Gallup, highly engaged employees are 5 times more likely to recommend a friend or relative to their company.

No company can ever completely reduce the risk of an employee damaging its reputation in some way, but what a company can do is make sure they are setup to listen, interpret, and support employees that they want to keep. “Again, the more a company can do to understand their workforce and to listen to them, the better off they will be,” explains Dershaw.

Bersin says this is one of the biggest issues of 2017: “The biggest trend in 2017 is not that engagement is an issue—but rather how we are dealing with it. Today, like never before, companies are adopting ‘always-on’ listening tools to monitor engagement,” he reports.

“My research shows that most employees feel ‘committed’ to their companies—and they all have opinions, feedback, and gripes for you to hear. If you give the organization the right ‘listening culture,’ then you can unleash this information and drive up engagement,” says Bersin.

Even while cultivating a “listening culture,” employers are worried about company reputation management in the social media space specifically, says Dershaw. “Remember that if you have workers who feel like they’re being heard, who feel like they’re participating in the company, who feel like they’re contributing, they should be less likely to spread negative information about the company to outsiders. They will know they have an effective internal path to resolve their issues,” he says.

3. Challenges with Mergers & Acquisitions

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Merging cultures can be a complex and complicated process. Employees are greatly impacted by a merger or acquisition. The ability to gather relevant feedback from those employees is critical to being able to successfully integrate cultures.

“You don’t necessarily know the people who make the business go, whether those are employees in the plant, the office, or on the road; you don’t have time to sit down to talk with each of them during this time,” says Dershaw. “On top of this, many organizations will have offices in various cities, so a geographically diverse organization will also have its own challenges.”

“No two offices will be impacted the same way, so this kind of real-time feedback—the kind of data that can be segmented across a variety of factors—has to be acted upon quickly to reduce potential liabilities or challenges,” adds Dershaw.

“You might think, at an enterprise level, you are seeing the information and you have everything figured out, but the people in [one city in particular] might have their own set of engagement challenges, and you have no idea of that unless you have a tool that goes beyond just looked at the aggregate level.”

It should not solely be HR’s responsibility to manage the organizational culture and the new standards that will need to be created, implemented, and supported to manage risk. HR leaders may lead or initiate the effort, but support must also come from all business units and disciplines.

Instead of making assumptions about how employees are feeling and what support they need, a tool like Talmetrix helps you to capture, analyze, act, and improve the employee experience as you manage change. Ultimately, the ability to diagnose and act on the workforce insights that are being collected is what will determine the success or failure of a culture integration.

Final Word

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Dershaw’s final words were the most prophetic, “Employment related lawsuits are likely to increase in the near future. Understanding your workforce so that you can take proactive and preventative measures will help you mitigate risk, if not avoid claims.”

Use Workforce Insights to Get Real-Time Feedback from Your Employees

Talmetrix cloud-based software connects existing organizational data (facts) with real-time employee feedback (feelings) providing a clear view of the impact the employee experience has on your business.

Contact us today to set up your Free Employee Feedback Consultation with one of our Expert Advisors.

Talmetrix does not offer a one-size-fits-all solution. As a rapidly growing company, we initially partnered with Talmetrix to help us measure and manage employee engagement, now our needs have changed and we have a flexible solution that can change with us.

We are not forced to adapt to a prescribed set of engagement questions…[and we’re able to] quickly adapt our employee feedback needs as they occur. We love the flexibility!

-Kim Chapman, SHRM-CP, Senior Director, Human Resources

See the Bersin research report used in this article here.

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