Operational Risk

The Problem 

TXT Oil operates in 100 countries and employs 96,000 people worldwide. It receives many thousands of job applications a year. As a very large multinational with a complex matrix organisation, the company faces several operational risks associated with the decisions its employees make. The risks have not been well managed and have resulted in an unusually high number of road traffic accidents, on-site fatalities, industrial accidents, and even rogue trading in its Integrated Supply & Trading division. As a result, the company has been beleaguered with bad publicity and negative press.

Many of the reported accidents and fatalities were deemed to be the result of human error. To prevent other potentially avoidable accidents, TXT Oil wants to develop and implement risk management structures across human resources. The company is particularly interested in managing the operational risks associated with new hires, as the majority of reported accidents were caused by employees who had been with the company for less than a year.

One aim of TXT Oil is to reduce the operational risk of the company by implementing a preventative maintenance programme in its hiring process. The company wants to select candidates who show sensitivity to risk, and thus less prone to overtly risky behaviours and actions. A particular concern involves job roles where safety is concerned. TXT Oil wants to identify the candidates who are the most talented without exhibiting confidence bias. The company must also abide by its equal opportunity employment policy, and thus short-list candidates in an unbiased and non-discriminatory manner.

The Solution

To avoid past mistakes, the company was especially interested in weeding out candidates who exhibited risk-prone bias. TXT Oil was also keen to identify those that demonstrate consistency in their risk taking as they wanted to hire reliable people. TXT Oil selected Oxford Risk Rating because it was an ideal solution to limit exposure to their operational risks.

The Result

Since implementing Oxford Risk Rating, TXT Oil has seen a number of efficiencies in its candidate selection process. The cost of recruitment and selection has been reduced by 25% through savings in time and money. Furthermore, there are fewer employee-related accidents, and thus fewer workers’ compensation claims and a corresponding reduction in insurance costs. Most importantly, TXT Oil has improved its corporate image and enhanced its reputation by improving its safety record.