Infographic the five pillars of people risk 

Managing risks for workforce and business resilience, examines the greatest people threats facing employers today. It will help organizations understand which people risks will have the most severe impacts and the barriers that are preventing firms from mitigating them.

Designed to serve as a checklist to help organizations identify and prioritize the threats that are most pertinent to them and take the appropriate action.

It’s not surprising to see talent attraction, retention and engagement so highly ranked in Canada, but interesting to see that workforce exhaustion and deteriorating mental health were also identified as key areas of concern. Increasingly in conversations with employers, tackling these two risks has become important in attracting new talent.

If organizations are really serious about doing more to manage employee well-being and show they care, then by addressing mental health and workforce exhaustion they can also make a positive impact on talent attraction and retention.

We grouped 25 key threats into five pillars of people risks. HR and risk managers assessed the likelihood and the impact of these risks on their organization.

Many organizations in Canada have their eye on these blind spots, but for others failure to manage these exposures can have severe implications for firms including – reputational damage, stakeholder disengagement, a workforce that does not feel cared for, and even loss of profitability and/or market share.

Poorly managed risks impact your business and bottom line.

Workforce exhaustion

The 5th highest threat amongst all people risks is workforce exhaustion and yet it was concerning that when asked “To what extent is your organization currently addressing this risk?”, it was rated in the 18th place.

Firms are seeing rising workforce exhaustion, caused by work-life balance issues, change fatigue and too many priorities and distractions. This often leads to errors, high employee turnover, reduced productivity and even damaged reputation.

Increasing health, risk protection and well-being benefit costs 55% respondents deemed increasing health, risk protection and well-being costs as likely or very likely to occur in the organization in the next 3 years.

To bend the medical inflationary curve, companies need to take a strategic approach within their risk management framework to reduce the frequency, impact and duration of their medical and disability claims.

Reduced insurer appetite and medical inflation is pushing up the costs of some benefits. Simultaneously, increases in utilization, claims duration and severity can lead to increasing health, risk protection and well-being benefit costs.

Cybersecurity

Ranked as one of the top 3 risks globally and in Canada. Increasingly sophisticated and frequent cybercrimes have pushed cybersecurity up the C-suite agenda.

Breaches occurring due to poor vendor and people management processes can cause severe business interruption and brand damage.

Talent attraction, retention and engagement

Ranked as one of the top 5 risks globally and #2 risk in Canada. Having the right talent is crucial for firms that want to be agile and innovative to drive business change and results.

The more varied health and well-being resources an employer offers, the more workers feel energized and supported, and the less likely they are to leave their employer.

The inability to create a strong talent pipeline, compelling employee value proposition and growth opportunities will lead to an unmotivated workforce and the loss of key talent.

Labor and employee relations

42% respondents deemed labor and employee relations to have a catastrophic or high impact on the business if it were to occur.

Poor labor and employee relations - may lead to a high volume of labor grievances, a perception of uncaring culture or a lack of desirable company purpose. This can lead to higher operational costs, suboptimal customer experience and social responsibility issues.

 

The top 3 barriers for each risk:

Despite the increased focus on people-related risks:

• lack of skilled resources to understand and address the risks
• lack of senior leadership engagement
• legal, labor and tax implications involved in the treatment of the associated risk

were the primary difficulties raised.

Implication

People are an organization’s most important strength, but can bring significant risk to a business if not properly managed. It is important that HR and risk management work together, and access specialist expertise, to protect, equip, and motivate this critical asset.

Employee benefits can be used strategically to help manage a range of threats while helping protect the workforce and business resilience – Contact a consultant or read our report to learn where to start.