People are frequently cited as an organisation’s biggest asset, so the idea that everything related to risk management comes back to people seems obvious. But what about HR itself? Geoff Trickey, founder of Psychological Consultancy Ltd (PCL), looks at the risk profiles of HR professionals. First published in Personnel Today, May 2016
What are the risk dispositions of HR professionals and how are their judgements and decision-making likely to impact the people risk management equation? Is there a sway towards adventurous risk-takers or wary, cautious types?
HR has a critical role to play as the guardians of people risk management; their perception of both risk and opportunity will shape important decisions, from dealing with critical skills shortages and succession planning to keeping ahead of compliance and regulation. Organisations can fail if they either take too many risks or if they are too risk-averse.
So what do we mean by risk disposition? A person’s eagerness to take risks and the way they handle the risks thrust upon them will be one of their most defining characteristics; one that makes them stand out amongst their colleagues.
Many people assume that risk-taking behaviour falls neatly somewhere between risk aversion and gung-ho recklessness, yet it affects many different aspects of personality including uncertainty, overconfidence, fearlessness, impulsiveness, distractibility and a tendency to be overly alarmed on the one hand or unresponsive on the other.
While someone’s immediate attitude towards risk can flex and change, their fundamental personality remains constant and herein lies the answers to their behaviour. Our research suggests that we can understand someone’s appetite for risk by understanding more about their personality.
HR professionals and the personality risk spectrum
Based on a large body of global research, the Risk Type Compass personality assessment places individuals into one of eight distinct risk types. The compass presents a continuous spectrum in which neighbouring types are similar and merge into each other, while facing types, such as “wary” and “adventurous”, have opposing characteristics.
Mining our database of assessments for HR professionals from a range of roles and industries and comparing them to a global sample of almost 8,000 individuals, we discovered some illuminating differences.
According to our research, by far the highest proportion of HR professionals – almost one-fifth (19%) – were designated as “prudent” risk types, compared with 12% of the general population.
This risk type is characterised as being systematic, orthodox, and detailed. Their primary concern is to establish clarity and order in objectives and processes. They adopt a systematic and methodical approach and seek to eliminate all ambiguity.
The second most prevalent type was “wary”, at 14% compared with 11% of the working population. This risk type tends to be shrewd and vigilant. Very sensitive to any kind of risk exposure, they are zealous in drawing attention to potential dangers and in enlisting others to their mission, passionately seeking to establish order and control events. Together, these results illustrate a fairly strong “pull” within HR towards the organised and controlling side of the compass.
In contrast, just 6% of HR professionals were characterised as the “excitable” risk type, defined as having strong feelings and being anxious, but also as being attracted to change and novelty. Such people have enthusiasm for exciting ideas and new opportunities but they are restrained by their sensitive risk antennae.
Adventurous risk types were also found to be slightly underrepresented in HR (8%) compared to the general population (11%). These individuals tend towards being intrepid, enterprising and undaunted, to be frustrated by resistance and keen to take things forward.
Interestingly, amongst the managers and leaders in our HR sample, the most prevalent was the “composed” risk type, with more than 20% falling into this group, compared with just 5% among non-managers.
Composed types tend to handle stress well, are a steadying and reassuring influence through challenging times and are dispassionate in their decision-making. This cool and calm temperament perhaps marks them out among their peers and leads them to advance through the ranks.
Impact of risk type on behaviour
What implications do these results have on behaviour? HR has a responsibility to provide a front-line defence against people risk.
Any one employee has the potential to wound or ruin a company, either financially or through reputational damage. HR helps to ensure those who enter the organisation are fully appraised and that those already embedded within it adhere to its policies and processes.
Perhaps it is reassuring, therefore, that a significant proportion of HR professionals are the prudent risk type, since their attention to detail, organisation and systematic approach help to ensure risk is minimised.
Similarly, the relatively high proportion of wary risk types helps to uphold an organisation’s duty to stay on the right side of regulation, compliance and ethical behaviour.
On the flip side of risk, however, is opportunity. As prudent and wary types are much more cautious risk-takers, their tendency towards control and attention to detail may lead them to judge others according to similar criteria.
Those employees who don’t prepare as fully for a meeting or send emails riddled with spelling mistakes may be perceived as sloppy and casual. Yet, individuals who are on the opposite side of the risk spectrum to prudent and wary – the adventurous and carefree risk types – may be adept at spotting opportunities, challenging tradition and driving innovation.
In fact, a number of studies have reinforced the view that more adventurous types are likely to be creative and entrepreneurial. For some roles such as sales and product development, these characteristics may be critical to the organisation’s survival.
Being aware of our own risk type as well as others’ can help us keep in check the biases that may affect our decision-making, whether recruiting candidates for a specific role or judging the behaviour of less conventional employees. HR and the broader organisation need a blend of cautious types as well as more adventurous risk-takers to strike the right balance between risk and opportunity. Long-term success comes from people occupying roles that are best suited to their risk type.