Amid new ways of working, an increasingly diverse workforce, new business models, digital transformation, and evolving consumer demand, companies must inspire and invigorate people by redesigning their work experience while also protecting against heightened risks in areas such as misconduct and lack of succession.
The pandemic has forced employers to revisit their talent management strategies, particularly as remote working has transformed the way we think about office spaces and business travel. At the same time, monitoring and maintaining company culture has never been more difficult and managers have needed to adapt to “virtual” employment.
Pre-pandemic, just 4% of HR teams believed they delivered an exemplary employee experience. Now, firms have had to come up with innovative talent management practices, policies, and procedures to reinvent the employee value proposition to ensure depth of talent, build trust, and find new ways of monitoring behavior to ensure it is aligned to company objectives and values.
This is not just about building a strong talent pipeline, demonstrating commitment to the employment value proposition, and motivating the needed workforce. There are other people risks inherent in talent management practices.
For instance, it is important that companies identify, assess, and control talent-related risks like: misconduct – including, fraud or unethical conduct; key person dependency; or productivity and performance risks associated with a mobile population.
While talent practices have previously been considered largely an HR responsibility, firms are waking up to the importance of workforce well-being and morale to the health of the business and a multi-disciplinary approach to bringing diversity of perspective and greater integration with the business. This means that decisions about benefits are gaining more C-suite attention. For instance, 74% of executives are anxious about lower-than-desired employee engagement, and 70% are concerned about the impact of high employee absences on productivity.
As such, HR teams must consider their strategies through the lens of risk management and wider board objectives. At Mercer Marsh Benefits (MMB), we have identified five key people risks when it comes to talent practices:
The benefits for organizations that successfully modernize HR strategies to address talent risk can be substantial. Our research demonstrates a strong correlation between the number of benefits provided and the loyalty and energy levels of employees.
We found that energized employees are six times more likely to say their workplace is focused on health and well-being. When asked what type of company they would prefer to work for, one-in-two employees said for an organization that protects employees’ health and financial well-being.
Talent practices are also critical from a brand standpoint – both as an employer, but also for building a broader business image and reputation. Benefits can be an expression of your brand. One place to start is by ensuring benefits align to the external image you are seeking to convey.
For example, in China we helped a healthcare industry client revamp its health screening program to be more in line with clinical best practices. From a brand standpoint, it was really important that features were not included in their annual health checks that were not clinically sound – like too many x-rays.
Another common strategy is to redesign programs to add more choice and hence make benefits more attractive. This can be done in a way that contains cost while appealing to a broader set of employee needs. This goes a long way in building an employee value proposition that addresses talent risks.
HR directors that are looking to revamp policies and strategies to help manage and mitigate these key risks should start by addressing five core questions:
Three key aims when using benefits to help manage talent risks
The war for talent impacts employers across all regions; talent attraction, retention, and engagement is crucial for firms that want to be agile, innovative, or need new skillsets to drive business change and results. As such, HR teams need to re-evaluate business plans to ensure that they meet the risks and needs of a modern workforce.
More importantly, benefits are pointless if they don’t actually benefit the workforce. That is why solutions to add more choice to benefits are so important. Whether it is through flexible benefit plans, voluntary benefits, engaging benefit platforms, or inclusive benefits that better address the needs of women, the LGBTQ+ community, essential workers, or other disadvantaged populations, it is all about delivering value.