Risky business Is it time to re-evaluate your risk management plan?
It’s not a question of “if” something will happen. It’s a matter of when. Municipal leaders know they have to have their proverbial ducks in a row when situations occur. That’s why having a risk management plan is critical to a community’s infrastructure: so the powers that be can identify, analyze, plan for and ultimately contain any potential problem that may come along.
In this period of economic recovery, it’s important for communities to take the time to re-evaluate their risk management plan, identify issues that need to be addressed and shore up any trouble spots that appear. The person to do this is your professional risk manager, who has the expertise to detect those universal issues that affect any size city and town, as well as those that may be specific to a particular area.
“Unfortunately, I see time and again where a community hires the mayor’s nephew, and he may not have the experience necessary to do the job effectively,” said John D’Agostino Jr., a certified risk manager who has specialized in the field for over 20 years. “When your risk manager has the job because of who he knew and not what he knew, it’s a big problem. In the short term it may be penny-wise, but in the long term it’s pound-foolish.”
A professional risk manager’s role is to help municipal leaders recognize where potential problems can occur and develop solid strategies to decrease the chance of negative outcomes. One of the issues municipalities have been struggling with in recent years is their employment practices, including the hiring, training, supervision and retention of employees.
Ever since the recession, slashed budgets have become the new normal, causing everyone to do more with less. Not only does this mean a reduction in staff, but also in the programs needed to train them. D’Agostino said that when staff members are inadequately trained for the tasks they need to perform, it disrupts production and can result in an increase of workplace injuries, workers’ compensation claims, safety violations and wrongful termination claims.
“There is definitely more employer liability, and training is key. You can’t let someone who has 30-years experience walk away and expect the next person to have the same type of knowledge and be up and running right away. You have to bring them up to speed quickly but thoroughly so that they can perform the job properly.”
Training problems can be especially difficult in areas with high turnover rates, but they make all the difference when it comes to managing risk. When communities reduce their training programs and offer one big seminar where employees can note the discrepancies between their training and the recommended best practices, it can lead to litigation.
“They think, ‘That’s not the way they trained me’ and see an opportunity to cash in,” he said. “When the economy has a downturn like it did a few years ago and people are struggling, they look for other avenues to bring in money. What better way than a lawsuit?”
Safety and compliance
Proper training is only half the battle. In municipal risk management, it’s also important for employees to know about the current Occupational Safety and Health Administration regulations for their workplace, and that all equipment is maintained properly so that it can stay in compliance with all regulations. This not only heads off workplace injuries, but also municipal liability when accidents occur.
D’Agostino said even though no one wants to believe something could occur, it will. Worse still, Murphy’s Law suggests it will always happen at the wrong time.
“Accidents never happen at a normal time of day when there are plenty of people available to help,” he said. “They always happen in the middle of the night when you have two people out sick and at least one truck broken down. That’s why it’s critical to keep your equipment inspected, your workplaces in compliance with OSHA and have enough personnel to handle whatever comes up.”
Events in Paris last fall are a powerful reminder than no community is safe from threat. Whether man-made or a natural disaster, having an emergency preparedness plan should be the top priority for municipalities, regardless of size.
“We want to believe that something like Paris or a 9/11 can’t happen in a small community, but it can and does. In the last few years small college towns have become the scene of horrific crimes, so no place is completely safe. You have to have the protocols in place so that your employees know what to do and who to call in the event of an emergency, and how to communicate the situation to the citizens.”
The most popular way communities communicate is through social media. Social media and computerized transactions have helped streamline municipal operations, but the technology can lead to privacy issues as well. For instance, while property taxes are a matter of public record, how they are paid are not. When data breeches occur, they not only compromise a municipality’s data, but its residents as well.
We’ve all heard about how retailers are often the targets of computer hackers, but it also happens in the municipal sector. Before offering constituents the opportunity to pay online, it is important to make sure their sensitive information will be protected. If a breech occurs, have a contingency plan in place to notify those who may be affected.
The other issue of cyber liability concerns social media. Communities are fighting an ongoing battle with their employees who use the medium for unprofessional reasons.
“There is no downtime in this 24/7 world we live in. You can say one damaging thing online about a coworker and it can spread like wildfire; when you know if you had just waited and cooled off a bit, you never would have said it in the first place,” D’Agostino said. “Municipalities now have to have policies in place to council employees on the acceptable use of social media and progressive discipline for violating these policies as well. That’s all part of risk management. It’s an ever-changing, ever-evolving field that must be re-examined periodically by every municipality.”
Regardless of how solid your risk management plan may be, resolve to revisit it in 2016 so that you can identify what improvements need to be made for the year ahead.
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