Regardless of the industry you work in or the size of your business, one fundamental truth prevails: people are at the centre of risk management. Whether it’s managing technological disruptions, addressing workforce dynamics, or fostering employee well-being, the essence of effective risk management is understanding and supporting the individuals who make up an organisation. After all, people influence every aspect of your business with their decisions and actions daily.
Often, in our pursuit of managing KPIs and ticking compliance boxes, we lose sight of the importance of a people-centric approach. We must embrace the philosophy that risk starts and ends with people. Many distractions compete for our attention, and they all trace back to people. Yet, we can mitigate many of these risks by being more effective in how we work with and support our people. This is where opportunity starts and ends with people—risk and opportunity are two sides of the same coin.
Here are some key areas where businesses can focus to manage people risks effectively:
1. Embracing Technological Change and Disruption
Technology continues to evolve at a rapid pace, pushing boundaries and introducing new risks. The cybersecurity workforce gap continues to grow, with an estimated 4 million professionals needed globally to protect digital assets adequately. This shortage places immense pressure on organisations to safeguard their data and develop and retain skilled cybersecurity personnel (Mercer | Welcome to brighter).
A hot topic currently is the increased application and use of artificial intelligence (AI), presenting both significant opportunities and challenges. While AI can drive substantial business transformations, its mismanagement introduces new risks, including data breaches and ethical concerns. It is crucial for organisations to establish robust AI governance frameworks and train their people to manage and mitigate these risks effectively (The Protecht Group) (Mercer | Welcome to brighter).
2. Navigating Talent, Leadership, and Workforce Practices
To compete and thrive, organisations need to attract, develop, and retain top talent. However, 70% of companies report lacking an effective employee value proposition (EVP), which is critical for attracting the right skills and talent (Mercer | Welcome to brighter).
Additionally, with global trends indicating poor leadership and management, the need for strong, courageous, and effective leadership is more pronounced than ever. One in three HR and risk professionals express concerns about senior leadership’s expertise in crisis management, highlighting the importance of leadership development programs focused on risk management and crisis response (Mercer | Welcome to brighter).
3. Prioritising Employee Health and Well-being
Employee well-being is a cornerstone of risk management. Keep in mind that employees are responsible for creating, executing, and managing strategies, processes, systems, and programs. With many employees exposed to volatile work environments, mental health has emerged as a significant concern. Organisations must invest in comprehensive mental health programs and support systems to help employees navigate stress and uncertainty (Hylant).
Innovative well-being initiatives, creating safe and respectful workplace environments, and offering flexible work arrangements and holistic health benefits are essential for supporting higher morale and productivity. By prioritising employee well-being, organisations have an opportunity to build a more resilient workforce capable of adapting to and overcoming challenges (Hylant) (Mercer | Welcome to brighter).
4. Adapting to Workforce Dynamics
The shift in workforce dynamics, especially in the context of return-to-work policies post-COVID, poses significant challenges. Many businesses are implementing these policies to enhance collaboration and culture, balancing in-person and remote work to meet both business and employee needs. However, how these policies are approached is crucial (Hylant) (The Protecht Group).
With employee disengagement remaining a critical problem, costing an annual $8.8 trillion, improving employee engagement plays a pivotal role. Organisations must recognise and address individual needs, foster a supportive culture, and provide opportunities for professional growth to maintain high levels of engagement and productivity (The Protecht Group) (Gallup)
5. Strengthening Diversity, Equity, and Inclusion (DEI)
Improving resilience and inclusiveness within a workforce requires strong DEI initiatives. Addressing systemic biases, promoting inclusive leadership, and ensuring equitable opportunities for all employees are critical steps in this direction (Hylant) (Mercer | Welcome to brighter). These efforts not only enhance organisational resilience but also foster a culture where all employees feel valued and supported.
Conclusion
In conclusion, the key to successful risk management lies in adopting a people-centric approach. All paths lead back to people, which is why employees must be the priority. By focusing on the well-being, development, and engagement of employees, organisations can more effectively navigate the complexities of the modern risk landscape. This approach not only mitigates risks but also fosters a resilient and productive workforce capable of driving transformational change and achieving sustainable success.
"It is only by focusing on risk with and through your people, that you are going to truly solve your organisational risk exposure and drive transformational change."
As emphasized in my book, “Risk Starts and Ends with People,” understanding and supporting the people at the heart of an organisation is the foundation for true resilience and success. By investing in your people, you protect your business and pave the way for a more secure and prosperous future.
