First, people are a source of risk, e.g., lack of qualified people, people doing sloppy work, an employee refusing to take on additional responsibility and a key employee leaving two months after completion of a one-year training program. Human resources include more than regular full-time employees. Risk specialists have traditionally focused mostly on important causes of risk such as weather, disease and natural calamities, and ways to deal with the risk. Risk management has paid little attention to human resources and human resource calamities such as divorce, chronic illness, accidental death or the impact of interpersonal relations on businesses and families. Including human resources in risk management reflects the fact that people are critical to accomplishing farm and ranch goals.
Human resources affect most production, financial and marketing decisions.
People can help or get in the way of accomplishing what managers have planned. Smaller family businesses do not escape the impact of people. In these businesses as in larger businesses, people are a source of risk and are important to the business' ultimate success or failure. Over dependence on family members for management and labor negatively affects family business effectiveness and efficiency. Confronting human resource risk may take the family business outside its usual boundaries to fill critical labor and management gaps.