Managing Human Capital Risks: How to Help Your Organization Thrive
February 12, 2025
At a glance
- The main takeaway: Effectively managing human capital risks can be a key differentiator for organizational success.
- Impact on your business: By aligning human capital management practices with business objectives, companies can mitigate potential risks associated with talent deficits, skill misalignment, and employee disengagement, ultimately leading to stronger, more resilient organizations.
- Next steps: Aprio provides tailored audits and assessments to help you evaluate your workforce’s skill sets in relation to your business goals. Contact us today.
Have any questions? Schedule a consultation with our team today.
The full story:
Managing human capital risks has never been more important. According to Principle 5 of the COSO Enterprise Risk Management Framework, aligning human capital with an organization’s strategy is essential to success. However, as organizations face new challenges—driven by technological advances, globalization, and shifting demographics—the risks associated with human capital can significantly impact long-term performance.
Identifying and Mitigating Talent Deficits
Your people are your most valuable asset, but without a strategic approach to talent management, there’s a high risk of losing institutional knowledge and key skills—especially as Baby Boomers retire and the generational landscape in the workplace shifts. The impending talent shortage and the competition for skilled professionals are creating new complexities in talent management.
A firm should attract, train, mentor, evaluate, and retain key individuals within an organization. Implementing structured development programs and recruitment strategies to secure and retain top talent can help minimize the risk of a talent deficit and preserve essential institutional knowledge.
Aligning Skills and Capabilities with Your Evolving Strategy
As your organization adapts to new market conditions, your business strategy is likely evolving as well. However, this shift may not always align with your employees’ current skills and competencies. If left unaddressed, this misalignment can lead to disengagement, lower productivity, and higher turnover, which ultimately jeopardizes your strategic objectives.
Developing a comprehensive plan to ensure your employees are equipped to meet the demands of your changing business environment can help improve engagement and reduce the risk of turnover.
Reducing Broader Organizational Risks
The risks associated with disengaged or underperforming employees go beyond morale. When employees are disconnected from the organization’s goals, it increases the likelihood of operational inefficiencies, compliance issues, and even fraud. A lack of oversight in their daily responsibilities can also escalate financial and reputational risks for the company.
Identify these risks early on by evaluating your human capital management practices. Maintaining accountability and rewarding performance can help your firm appropriately reward employees for acceptable behaviors, and ultimately increases alignment between their actions and the company’s strategic objectives.
By proactively addressing potential human capital risks, you protect your organization from operational and financial pitfalls, while ensuring a more engaged, productive workforce.
The Benefits of Proactive Human Capital Audits
Investing in human capital audits isn’t just about identifying risks. It’s about seizing opportunities to enhance performance, align strategy with execution, and develop the talent necessary to drive your business forward.
Partnering with Aprio to conduct human capital audits ensures that you have a clear, ongoing understanding of your workforce’s capabilities and alignment with business goals. We provide actionable insights into the areas where your organization is excelling and where improvements are needed. With our deep industry experience and proven frameworks, we can guide you through the complexities of human capital management and help you build a resilient, adaptable workforce that is prepared for tomorrow’s challenges.
The bottom line
Aprio specializes in auditing human capital risks, helping you proactively address these challenges to safeguard your organization’s future. Our audit services can help you assess your current workforce and identify critical gaps in your talent. Through a detailed assessment of current roles and responsibilities, Aprio can pinpoint areas where skill gaps exist and recommend targeted upskilling and training initiatives. We can provide recommendations to help you foster a culture of accountability, reward high performance, and ensure that your employees understand their roles in achieving strategic objectives.
As a trusted partner, we offer more than just risk assessments—we provide strategic solutions that align with your business objectives. Our team will bring deep industry experience in human capital management and risk mitigation, and we will work closely with your team to create tailored solutions that address your unique needs. With our audit and assessment services, you’ll have the tools, strategies, and insights to unlock the full potential of your workforce, ensuring that your organization remains competitive, resilient, and primed for future success. Contact our team today.
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About the Author
Cecilia Ng
Cecilia Ng is a seasoned manager in Aprio’s Governance, Risk & Compliance (GRC) Practice, specializing in corporate governance, enterprise risk management, internal audit, and SOX compliance. She has audited financial statements for public, private, and not-for-profit clients and has specialized in employee benefit plan audits. Cecilia has worked with clients from real estate, financial institutions, insurance, manufacturing & distribution, and telecommunications. An alumna of Emory University's Goizueta Business School, she also holds executive education credentials from Cornell University and an AICPA Certificate of COSO Enterprise Risk Management.
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