Which risk management tactic is most suitable for the HR manager to take?

Consumers are engaging in a boycott campaign against a global organization whose supply chain has been discovered to be involved in child labor and human trafficking. Due to the boycott, the organization has had to begin layoffs over which employees are disgruntled over.

Which risk management tactic is most suitable for the HR manager to take?

A. Have the legal department review the layoff plan to avoid litigation

B. Offer laid-off employees a severance package and outplacement services.

C. Conduct the layoffs and assure employees who remain that the supply chain issue has been rectified

D. Ensure transparency and two-way feedback regarding employee concerns about the supply chain

boycott and impending layoff

View Answer

Answer: A

Explanation:

Note that litigation is the most serious risk among the options. Risk management refers to the practice of identifying potential risks in advance, analyzing them and taking precautionary steps to reduce/curb/avoid the risk. In this case, obtaining legal review helps avoid costly legal compliance issues regarding layoffs. Conducting the layoff without legal review and without a communications plan opens the organization to litigation risks. Federal laws to note when considering a layoff include the WARN Act and COBRA.