The risks facing today's business leaders are overwhelming. Across industries, today's businesses are expected to account for shortfalls in customer demand, anticipate regulatory oversight and thrive under competitive pressure -- all while overseeing M&A integrations and managing account irregularities. In order to combat risks associated with each area, many business owners engage multiple vendors. In doing so, they realize -- and often too late -- that they are creating a fractured approach to managing their overall cost of risk.
All business entities face risk. Some aspects are insurable while some are not. But just because the risk is insurable, does that mean you should buy insurance? Organizations today are transitioning from simply purchasing insurance to establishing a full risk management plan. Today, successful business leaders are not just buying an insurance policy, they are relying on a trusted resource to safeguard their business, promote workplace culture, ensure compliance, manage risk -- and ultimately create financial savings.
An enterprise risk management plan should evaluate and avert threats in four distinct zones: people, operations, compliance and risk financing. This article offers strategies that your business can use to optimize your workforce, elevate business operations, remain compliant and appropriately transfer business risk.
Empower your people.
Your workforce is the lifeblood of your business. For employees to stay happy and healthy, their work environment should enhance the understanding and overall perception of your benefits program. Investing in a wellness and loss control program can help impact the culture of your organization and generate financial savings. It is important to remember that education is a process, not an event. Educate employees on your benefits and their wellness year-round, not just during open enrollment.
Leverage operations and infrastructure.
Integration between systems can cause frustration -- especially when information fails to pass from one platform to another. To ensure data integrity and a seamless user experience, it is important to evaluate all current-state systems and identify areas for improvement. Technology can improve workplace communication and support efforts to educate employees on opportunities to embrace their benefits package, further lowering the cost of risk.
Adhere to regulatory measures.
With seemingly constant changes to the health care industry, it is important to identify responsibilities that fall on the employer to properly implement and remain compliant. The plan should include executive leadership and be sophisticated enough to communicate expectations, articulate deadlines and assign responsibilities at the carrier, consultant and client levels. Your benefits advisor should perform a compliance review with you.
Adopt risk transfer strategies.
Risk financing is much like any other financial decision. It should support the organization's overall strategic plan, including changes to structure, ownership and planned perpetuation. When risk is calculated at the enterprise level, it can account for input from strategic, operational and financial team members.
Insurance may help manage hazard risks, but strategic, operational and financial risk requires strong management processes to control. When looking to manage risk at an enterprise level, business leaders should consult an advisor that understands that the goal is to buy less insurance and compress costs.
• Rusty Magner is managing director -- Chicago benefits advisor with TrueNorth Insurance & Financial Strategies in Rosemont.