As organizations embrace working from home, digital solutions and technology-first strategies, risk and HR managers must address business risks involving cybersecurity, digital delivery of benefits and managing technology skills gaps.

Rapid digital transformation is the norm of our times. Organizations not only have to make changes to their business delivery, but they also need to do a lot more to create a truly digital work experience for their employees. Of course, Covid-19 and the urgent shift for many to remote or flexible working have only increased the need for digital transformation.

People management practices, however, have not kept pace with other technological developments. Risks involving cybersecurity, loss of personal information and system obsolescence are heightened because of how HR data is maintained and how benefits and other HR programs are delivered. 

This accelerated digitization creates five key people-related risks for firms:

  1. Misalignment of HR and business strategy: Workforce planning, organizational change management, and HR/benefit technologies and processes being inconsistent with the strategic business vision
  2. Skills obsolescence: Gaps in workforce skillsets because of rapid digitization and automation, resulting in unmet business goals
  3. Cybersecurity: Increasingly sophisticated and frequent cybercrimes, including those that stem from people management processes and vendors, causing business interruption and brand damage
  4. Data privacy: Breaches resulting in loss or misuse of personal information, including those that stem from people management processes and vendors
  5. Obsolescent HR technologies: Failure to capitalize on technology advances that will make HR activities, benefits and healthcare more personalized, convenient and secure, resulting in a suboptimal employee experience

But alongside threats, there are also opportunities. Employers have the chance to address gaps in workforce skillsets and deliver a more personalized, convenient and secure employee experience. There are further opportunities associated with the explosion of digital health and well-being programs that have become more relevant and have gained significant traction during the pandemic.

Employee expectations are changing, too, requiring employers to transform how they deliver benefits. Two in five workers say they are less likely to leave a company if their employer promotes or sponsors digital health solutions.1 To help retain talent, HR teams must design employee experiences that are fit for a flexible, digital working environment.

Here are six questions that those responsible for HR and risk must ask to ensure that policies and practices are relevant and effective today:

1. Are we confident we can mitigate the risk of an HR data breach?

Are employees’ personal details, such as salary or dependent information, being shared with third parties using spreadsheets? Is that a risk you are comfortable with? More than half (53%) of employers believe their current HR technology processes and procedures expose them to undue risk.2

2. Are our HR processes aligned with the employee experience we are seeking to create?

In 2020, 81% of employers said that achieving a “globally consistent employee experience” was a “high priority,” and its importance has increased year on year since 2018.3

3. Have we modernized our health programs in light of a rapidly changing digital health ecosystem?

Before the pandemic, 68% of employers said they were likely to invest in digital health in the next five years.4 Interest was strongest among employers in the high-tech, manufacturing/construction and financial services/insurance sectors.

4. What is our digitization strategy?

Ensure you know who is driving digitization in your organization. Determine what contribution you need from HR and the enterprise risk management team to craft a cohesive digital agenda.

5. Have we assessed the impact to our people, programs and infrastructure with a cyber-lens?

Since HR processes involve a lot of personal data, evaluate HR practices to determine how to treat, terminate, transfer or tolerate cyber risk.

6. Is our employee experience for managing benefits consumer-grade? 

Sadly, figuring out how to enroll in and access a benefits program is a paper-intensive and frustrating experience for many. Over the coming years, the bar will continue to be raised. At a minimum, even if programs are highly fragmented, employers must identify their “front door” to their health, risk protection and well-being programs. And then work to continuously improve their benefit programs over time by delivering a more simple, fun and integrated experience. 


Businesses are embracing technological developments and seeing the clear benefits that a digital-first organizational strategy can bring. However, HR departments are failing to keep pace, and introducing cybersecurity and data privacy concerns — especially considering remote working, high volumes of employee benefit data and vulnerable processes — goes beyond an HR role. 

HR is being challenged to speed up digital transformation. And it can do so by ensuring the HR strategy works in tandem with the business vision and is protected through a risk lens. We urge HR and risk management teams to seize the opportunities to transform their programs and embrace the employee health, well-being and risk protection benefits that digitalization can bring.

1 Mercer. 2020 Global Talent Trends Survey.

2 MMB Darwin. The Age of Agility: Flexible, Adaptable and Resilient Benefits, 2020.

3 Ibid.

4 Mercer Marsh Benefits, Mercer and Oliver Wyman. Health on Demand Survey, 2020.

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