Risk Observations- HR department

Observation 1
Human Resource Risk (People Risk)
Risk Description
Skill shortages in recruitment and replacement for high level positions (BM) or Sr.LOs put pressure
on HR team to find the right peoples for the right positions in timely and effective manners.

Risk Approach
Risk Officer talked with head of HR to understand HR processes and their activities

Potential Outcomes
Hiring of less skillful employees could affect operation and credit risk. Moreover, hiring
unqualified employees will not only demotivate other team members, but it also put the whole
team at risk of operation, credit and reputation risks.

Risk Strategy and Action Plan:

By Mitigate and Control,
Management should not plan very hastily to hire more skillful labor forces and HR should not rush
hiring unqualified and unskillful employees.

Observation 2
Human Resource Risk (People Risk)
Risk Description
Currently the number of Hayman Employees is at about 360 people. Employee turnover rate is
32% which mean 1 out of every 3 employees resigned. The reason employees resign because they
left during management pressure or they found better opportunities elsewhere.

Risk Approach
Risk Officer talked with head of HR to understand HR processes and their activities

Potential Outcomes
Skillful employees leaving the company could affect our operation severely. Moreover, SrLOs
leaving Hayman could impact credit risk because it is easier for old and senior LOs to collect
delinquency since they are already familiar with clients than new employees doing delinquencies
recollections.

Risk Strategy and Action Plan:

By Mitigate and Control,
Hayman need to retain experienced and skillful employees to prevent from losing valuable human
resources to competitors or somewhere else or we will lose our competitive advantages. Since MFI is
lack of skill labor and its labor intensive business nature, Hayman should plan to retain and attractive
experienced employees to prevent from talent drain to other competitors.
Observation 3
HR Risk (People Risk)
Risk Description
Hayman Human Resource training program has been only for a year old. Currently Hayman is
looking for replacement of HR training officer since previous HR training officer resigned. Ask Ma
Sandar to know what kind of training trainer give at branches.

Risk Approach
Risk Officer talked with head of HR to understand HR processes and their activities

Potential Outcomes
Hayman HR training and employees’ skill development program is very young and weak. Because
of it, it will affect employees’ motivation, skills and knowledge and we could be at competitive
disadvantage when competing with other MIFs.

Risk Strategy and Action Plan:

By Mitigate and Control,
HR department need to hire training officer as soon as possible to retain, motivate and educate
our junior loan officers to be equipped to deal with competitive MFI environment.

Observation 4

Risk Description
Because of lack of good communication skills of head office staffs, Branches are not willing to
communicate or share important information with Head Office.

Risk Approach
From Audit and Risk Observation

Potential Outcomes
Because of Branches Staffs’ communication barrier with head office, Initially, Branches will face the
problems on their own until the problems become big or unable to handle.
Risk Strategy and Action Plan:
HR and training officer should provide head office and branches’ effective commination training to
improve communication and cooperation between head office and branches.
Observation 5
Risk Description
Lack of control and monitoring of head office staffs’ movement by HR department cause lack of
discipline among head office staffs.

Risk Approach
From our Observation

Potential Outcomes
Ineffective work and most of the important work will not be done in timely and effective manners due
to employees’ going outside during office hours. They will work overtime and the company will incur
extra labor costs.

Risk Strategy and Action Plan:

HR should control staffs’ movement register from security. Management need to control and monitor
staff work schedule and check if staffs are working effectively or not. Check if it is necessary for staffs to
come for overtime.