Different human resource activities will incur potential risks for both the organization and the employees, ranging from staff recruitment and selection, occupational health and safety, employee development, complaints and grievances handling, to labour disputes and dismissal. Human Resource Risk Management helps identify potential employee-related risks to an organization so that any problems can be minimized before they arise. It greatly contributes to keeping the organization running smoothly and its employees satisfied with good morale.

Human resource professionals of private and public organizations, and owners of SMEs have to acquire the knowledge and skills to handle new and growing demands of employment-related law and regulations, and to ensure the full compliance. Human resource governance plays a vital role in safeguarding the sustainability of an organization and employee satisfaction.