What is People Risk Management?
People Risk Management (PRM) People Risk Management (PRM) is the proactive strategy of identifying, assessing, and mitigating risks posed by employees, consultants, and contractors, who may unintentionally or maliciously compromise internal security. This approach goes beyond traditional human risk management by incorporating ongoing monitoring and behavioral analysis, helping organizations manage evolving threats over time.
As more companies experience internal threats, HR professionals, compliance officers, risk managers, and executives are recognizing that conventional background checks alone are insufficient for today’s evolving risk landscape. PRM’s scope extends beyond the initial hire to ensure continuous evaluation and protection across the workforce.
How People Risk Management Works
Effective People Risk Management relies on a blend of initial screenings, continuous monitoring, and real-time behavioral analysis. The first step in PRM is a comprehensive pre-hire screening process, which identifies potential red flags from the start. However, this initial check is only the beginning. Since employees’ risk profiles can change over time due to personal or professional factors, organizations are now turning to dynamic monitoring solutions that assess risk on an ongoing basis.
Advanced PRM solutions, such as predictive algorithms and behavioral analytics, flag unusual patterns, shifts in behavior, or changes in personal circumstances. For example, sudden changes in performance, unexplained financial pressures, or increased absenteeism could indicate emerging risks. By adopting a continuous, data-driven approach, companies can intervene early, mitigating potential threats and creating a safer workplace environment.
For a deeper dive into how to monitor risk management, explore the Horizon article, which covers Trustii’s approach to automating risk detection and response, ensuring your organization is prepared for evolving internal threats.
Where is People Risk Management Applied?
PRM is increasingly essential across industries and roles where data sensitivity and regulatory compliance are paramount. Here are a few notable examples:
- In Finance, PRM is crucial to prevent fraud, unauthorized transactions, and misuse of sensitive data by continuously monitoring employee access and behavior.
- The Public Sector, including government agencies, relies on PRM to maintain security and ensure employees and contractors comply with ethical and regulatory standards.
- In the Rental Industry, PRM helps landlords and property managers vet and monitor tenant-related risks, safeguarding property and reputation.
- Technology companies depend on PRM to protect intellectual property and prevent data breaches, ensuring that sensitive innovations remain secure.
Business Functions
PRM is crucial in departments with significant access to sensitive data, such as HR, IT, compliance, and finance—the latter involving direct access to company funds. These departments frequently handle high-stakes tasks, making breaches or misuse of data especially risky.
Data Breach at Desjardins Group: In 2019, a Desjardins employee exploited shared drives to access and leak sensitive data of 2.9 million members, despite having limited access to data warehouses. This breach, which went undetected for 26 months, ultimately cost nearly $201 million in settlements and credit monitoring.
How PRM could have helped: PRM could have mitigated the risk by enforcing continuous monitoring and stricter access controls on shared drives, detecting unusual access patterns early. This proactive approach allows companies to identify and respond to suspicious behavior promptly, reducing potential damage from unauthorized data access.
Fraudulent CERB Claims by CRA Employees: In 2023, 120 Canada Revenue Agency (CRA) employees were dismissed for fraudulently claiming CERB, exploiting their positions to manipulate benefit systems. This incident underscores the need for oversight and ethical conduct in government agencies.
How PRM could have helped: Regular assessments and behavioral monitoring through PRM could have flagged irregular access patterns, reducing internal fraud.
Ontario Power Generation Leak: In 2024, a former employee at Ontario Power Generation, which oversees nuclear facilities, was charged under Canada’s Security of Information Act for allegedly leaking sensitive nuclear data online.
How PRM could have helped: PRM could mitigate such risks by continuously monitoring employee behavior and access patterns, enabling timely detection of unusual activity and reducing the likelihood of data breaches in high-security environments.
These examples highlight how People Risk Management (PRM) is vital across organizations of all sizes and industries. From finance and government to energy, PRM addresses evolving employee risks and helps prevent costly internal threats. As employees’ roles and access levels change, PRM enables ongoing monitoring and proactive intervention, ensuring that even small organizations can safeguard sensitive data and maintain operational integrity.
Why is People Risk Management Important?
The importance of People Risk Management (PRM) goes beyond mere compliance—it’s about protecting a company’s reputation, minimizing financial risk, and ensuring overall business resilience. As insider attacks increase in frequency and cost, a proactive people risk management framework has become essential to detect and manage risks across the employee lifecycle.
Implementing PRM cultivates a culture of transparency and accountability, strengthening an organization’s commitment to security. In today’s complex work environments, PRM enables companies to adapt to evolving risks, ensuring workplace integrity and stability. For further insights on PRM’s foundational role, read our article “Insider Threats: Your First Line of Defense is Knowing Who You Let In,” which explores why People Risk Management is essential for organizational security.