The Role of Human Resource Management in Risk Management
Bernard L. Erven Department of Agricultural, Environmental and Development Economics Ohio State University Human resources have two roles in risk management. First, people are a source of risk, e.g., shortage of employees, people doing sloppy work, an employee refusing to take on additional responsibility or a key employee leaving two months after completion of a one-year training program. Second, people are important in handling risk, e.g., people using their ingenuity to solve unexpected problems, employees going the extra mile for the good of the organization, a key employee redesigning her own job to avoid unnecessary delays in getting work done, or an employee persuading a talented friend to apply for a position in the business. Human resources include more than regular full-time employees. They include: all management and labor personnel, family and non family members, full-time and part-time people, and seasonal and year around employees. Human resources play important roles in farm businesses of all sizes. Orientation and training matter as much for one employee as for 20 employees. A business with just two people can have serious conflicts that jeopardize the business’ continuity and success. No team of people is so small as to avoid the need for leadership or so large as to make leadership impossible. Risk specialists have traditionally focused mostly on important causes of risk such as weather, disease and natural calamities, and ways to deal with the risk. Risk management has paid little attention to human resources and human resource calamities such as divorce, chronic illness, accidental death or the impact of interpersonal relations on businesses and families. Including human resources in risk management reflects the fact that people are fundamental to accomplishing farm goals. Human resources