Skip to main content

Impacted by wildfires or winter weather? Whether you have a business that's been affected or your personal home and assets are damaged, know that you have a team of people to support you. Find resources here.

July 8, 2025

Employee risk management: Definition, trends, and best practices

Businesses can enhance employee experience and well-being by understanding top industry trends.

Summary

  • What is employee risk management?
  • Top trends in employee risks
  • Employee risk management best practices

Managing employee-related risk is essential for maintaining a safe, compliant, and productive workplace. From ensuring workplace safety to protecting against cybersecurity threats and legal issues, effective employee risk management helps companies safeguard their greatest asset—their workforce. By proactively identifying, assessing, and mitigating these risks, businesses not only protect their operations and reputation but also foster a positive and supportive culture that empowers employees to thrive as well. 

This article explores the top trends and best practices for employee risk management to help organizations build resilience and drive sustainable success.

What is employee risk management?

Employee risk management is the process of identifying, assessing, and mitigating risks associated with a company's workforce. These risks can arise from factors such as safety hazards, employee behavior, compliance with employment laws, and overall workforce dynamics. They impact a company's operations, reputation, and financial performance.

Implementing a robust employee risk management strategy helps organizations reduce the likelihood of disruptions, improve employee satisfaction, minimize legal and compliance risks, and foster a culture of safety and respect.

Noncompliance with workplace safety regulations can result in lawsuits, penalties, and reputational damage. Managing risks minimizes these threats. Additionally, preventing workplace accidents and incidents can lower insurance premiums and compensation claims. Ultimately, a risk management plan strengthens the organization’s resilience and positions it for long-term success.

Top trends in employee risks

Several factors impact the human resources landscape, from employee expectations to expanding regulations. Workplaces must keep up with these three trends to ensure their employees are happy and healthy:

1. Workplace safety

A company is nothing without a staff that feels safe and cared for. Business leaders know this and are taking action. For many employees, a supportive environment is just as important as their pay and PTO. In fact, Deloitte reported that 57% of employees said they may soon quit their current role for a more supportive job.

As a response, the Occupational Safety and Health Administration (OSHA) has increased regulations regarding employee safety. Some key initiatives include:

  • Enhanced recordkeeping: Companies may need to track more detailed data on workplace injuries and illnesses and digitally submit this information to regulatory agencies.
  • Focus on proactive measures: There's an emphasis on preventative strategies like hazard identification, risk assessments, and employee training that can address potential safety issues before incidents occur. 
  • Increased enforcement: Regulatory bodies will now conduct more frequent inspections and impose stricter penalties for noncompliance, including potential fines and legal action. 
  • New hazard categories: Updated regulations address emerging hazards like musculoskeletal disorders from repetitive motions, mental health risks from high-pressure work environments, and exposure to new chemicals or nanomaterials.

2. Absence, disability, and leave

Life is full of uncertainties and surprises. Unfortunately, only 34% of organizations feel prepared to effectively manage workforce risks over the next three years. Sickness, injury, and family emergencies occur unexpectedly, and employees must be able to take time off from work to heal or be present with their loved ones. This creates gaps in organizations’ productivity, which can become a problem if not managed properly.

Small- to mid-sized businesses have especially struggled to stay updated and compliant with absence, disability, and leave benefit regulations. Recent trends include:

  • Compliance complexity: With different states and regions enforcing their own rules, businesses are investing in HR tools and consultants to navigate legal obligations and avoid penalties.
  • Evolving paid leave laws: Many states have introduced expanded paid family and medical leave programs, requiring businesses to offer more time off to employees while managing the financial burden.
  • Flexible leave policies: Employees now expect personalized leave plans, including flexibility to manage caregiving responsibilities, parental leave, and even life event leave for nontraditional reasons.
  • Mental health focus: New policies increasingly address mental health as a valid reason for leave, making it critical for employers to adapt and support employees through awareness campaigns and wellness programs.

3. Employee health and benefits trends

Employee well-being is no longer just a box to check—it’s a key driver of engagement and productivity. Companies that prioritize innovative employee benefits and holistic wellness strategies set themselves apart:

  • Benefits and talent: Offering à la carte options for health, retirement, and lifestyle benefits allows employees to choose plans that fit their unique needs. Additionally, programs like pet insurance, student loan repayment assistance, and childcare subsidies are growing in popularity.
  • Health care costs: Employees demand clearer breakdowns of their health care costs and coverage. In response, companies are leveraging platforms that provide real-time insights into plan usage. Employers are also promoting preventive care through free annual checkups, fitness reimbursements, and chronic condition management programs to keep long-term costs down.
  • Whole-person health: Employers are expanding access to mental health resources, from telehealth counseling to meditation apps, recognizing their direct impact on productivity. There’s also more emphasis on financial wellness, with employers introducing financial literacy programs and employee assistance initiatives. These help reduce stress associated with money management, improving overall workplace satisfaction.

Employee risk management best practices

Want to enhance your employee risk management and make your workplace safer for your team? Here are some best practices to follow:

Develop comprehensive policies

Creating clear, thorough policies is essential to employee risk management. Policies should cover workplace safety, employee conduct, data security, and compliance with industry regulations. Outlining expectations and procedures for addressing risks helps organizations provide employees with a framework to navigate challenges while maintaining alignment with company goals and values.

Conduct regular policy reviews

Policies should evolve to keep pace with changing workplace dynamics, legal requirements, and emerging risks. Regular reviews ensure that guidelines remain relevant, effective, and aligned with the organization's risk management strategy. This approach helps prevent compliance issues and builds employee confidence in the organization's commitment to their well-being.

Identify key employee-related risks

Understanding potential risks related to employees, such as workplace injuries, absenteeism, and data breaches, is critical for risk mitigation. Organizations should evaluate their workforce demographics, roles, and work conditions to pinpoint vulnerabilities and prioritize the most pressing concerns.

Perform risk assessments regularly

A comprehensive risk assessment allows businesses to identify potential threats before they escalate. By evaluating the likelihood and impact of various risks, companies can implement targeted strategies to mitigate hazards, protect employees, and ensure operational continuity.

Ensure employees are trained in workplace safety

Employee safety training equips people with the knowledge and skills to identify and address hazards effectively. Tailored training programs that align with specific roles and environments can reduce the likelihood of accidents and foster a culture of safety awareness.

Provide cybersecurity training

Equipping employees with cybersecurity awareness is critical given the rise of cyber threats. Training should cover recognizing phishing attempts, handling sensitive information securely, and adhering to company protocols to protect organizational data. Employees are the first line of defense in safeguarding digital assets.

Train employees on company policies

Employees should fully understand the company's policies, including those related to conduct, safety, and confidentiality. Regular training sessions keep staff members informed, reducing the potential risk of noncompliance and fostering consistency across the organization.

Assign mentors or peers to support new hires

Pairing new employees with mentors or peers facilitates smoother onboarding and reduces risks associated with unfamiliarity. Mentorship programs provide guidance, build confidence, and help new hires integrate quickly, enhancing retention and productivity.

Foster a safe reporting environment

Creating an environment where employees feel safe reporting concerns without fear of retaliation is crucial for identifying and addressing risks early. Anonymous reporting channels and transparent processes encourage employees to speak up, which helps the organization take proactive measures.

Encourage regular check-ins

Regular check-ins between managers and employees allow for open communication about challenges, progress, and well-being. These conversations help identify potential issues, address concerns, and ensure alignment with organizational goals.

Conduct engagement surveys

On top of regular conversations with staff, employee engagement surveys provide valuable insights into workforce satisfaction and areas of concern. Regularly gathering feedback enables organizations to identify potential risks related to morale, productivity, and retention.

Act on feedback

Collecting feedback is only effective if organizations act on it. Addressing employee concerns and implementing suggested improvements demonstrates a commitment to their well-being and builds trust, fostering a culture of collaboration and accountability.

Identify key positions and personnel risks

Understanding the critical roles within the organization and assessing potential risks associated with their absence or turnover is essential. Succession planning, cross-training, and contingency strategies help mitigate the impact of losing key personnel and ensure business continuity.

Want to ensure your employee risk management practices are up to par with your team’s expectations? Download our Business Insurance Trends report to learn more about solutions for top employee risks.