New research shows the greatest likelihood and impact of 25 workforce-related threats facing employers in Australia and worldwide, according to risk managers and human resource (HR) professionals. While organisations have always faced people-related risks, these have been particularly pronounced during the pandemic.
People-related exposures, such as health and safety, governance and digitisation have been rapidly rising up risk registers and are gaining increased board attention. In part, this trend has been accelerated as the pandemic clearly showed that threats to the health and well-being of the workforce threaten the overall resilience and success of a business.
“The pandemic has reinforced that employee health, risk protection and wellbeing is a central business risk, worthy of C-Suite attention.”
Mercer Marsh Benefits Leader, Pacific
By hearing first hand from risk and HR professionals across Australia, we learned which people-related risks had the most relevant and significant impacts on the business, and the barriers to firms addressing these risks.
Cybersecurity, talent attraction, retention and engagement, deteriorating mental health and workforce exhaustion are the top people-related risks facing workforces today, according to Australian risk managers and HR professionals.
The 25-people risk framework can help risk management and HR teams articulate in board-level conversations the consequences of not acting now to manage these exposures, whilst creating context for cross-organisational discussions on top risks and the priorities and opportunities those risks bring.
The pandemic has put workers’ physical, mental, social and financial health in the spotlight, highlighting exposures which can be managed using a risk management framework approach.
Risk and HR managers alike reported that they lacked the skilled resources to understand and address people-related issues. They also cited budget constraints and a lack of clarity around accountability around organisations as a significant barrier.
Ultimate responsibility for each individual risk varied considerably between companies, suggesting that collectively, the business community has not standardised roles and responsibilities for managing many people risks.
This report shares solutions and practical tips towards mitigating people risk and becoming more resilient.
The Australian Managing the People Side of Risk survey was conducted over March and April 2021. There was a split of 60% risk professionals and 40% HR professionals, with participation across a wide range of industries. The respondents also represented a cross-section of employer sizes.
Survey respondents were asked to assess the likelihood of the risk occurring in their organisation in the next three years on a scale of 1 to 5, with 1 representing a risk that is not very likely and 5 a risk that is very likely to occur. They also assessed severity of each risk’s impact on the business if it were to occur on a scale of 1 to 5, with 1 representing no impact and 5 a catastrophic impact.
The risk rating score was calculated as a product of the likelihood and severity of the risk occurring.
Respondents were also asked to assess to what extent their organisation is currently addressing the risk on a scale of 1 to 5, with 1 representing not at all and 5 to a great extent.
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Any statements concerning actuarial, tax, accounting, or legal matters are based solely on our experience as insurance brokers and risk consultants and are not to be relied upon as actuarial, accounting, tax, or legal advice, for which you should consult your own professional advisors