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Déjà Leonard is a copywriter and freelance journalist based in Calgary.
- People risks are now being considered in more company’s risk strategies and conversations
- HR and risk professionals are worried about the rising costs of benefits, shortage of tech talent and how technology is used to solve challenges
Businesses have long paid attention to many different types of risk, for example, financial, environmental or reputational. However, people risks – the risk of financial losses because of inadequacies in human capital and the management of human resources – is gaining the spotlight, especially since the pandemic when people were highlighted as a key part of business resiliency.
“What’s happening now is that there’s an understanding that people risk is a risk that needs to be understood, measured, managed and mitigated,” says Jennifer Schmidt, a partner and innovation leader at HR consultancy Mercer Canada.
Mercer just released its 2024 People Risk report, which surveyed 4,575 HR and risk professionals in 26 countries, including 155 HR and 155 risk professionals in Canada, to capture attitudes about the most significant people risks facing organizations.
The first big people risk that Canadian professionals are concerned about is the increasing cost of health and benefits.
“In the past, when there were cost pressures, you managed the scope of the program through cutting back [on benefits] or shifting costs to employees, and that doesn’t work now,” Ms. Schmidt says.
She says traditional insurance programs aren’t enough anymore and that companies need more robust benefits programs that focus on prevention of illness and accommodation of various needs.
For example, they can provide digital solutions to access mental health care or look at providing specific support for those who are pre-diabetic, or those who are experiencing menopause.
The report shows a gap in alignment between companies and HR departments. More than 60 per cent of organizations do not have risk mitigation measures in place, or feel like they could improve their approach to benefits, while 48 per cent of Canadian HR and risk professionals are concerned that benefit program decisions are being made without considering long-term impact.”
Ms. Schmidt says that even though a more expansive program may cost more in the short term, having healthier, more productive workers is the long-term result that saves a business money.
Another risk is the shortage of technology skills, and one factor that affects that is a company’s ability to attract and retain the right talent.
“Every organization needs tech talent right now, but it’s a bigger concern in Canada than globally,” Ms. Schmidt says.
According to the People Risk report, 38 per cent of respondents globally, and 45 per cent in Canada, feel pressure to provide higher pay and better benefits to compete for talent.
Additionally, 61 per cent of organizations say they need to improve their employee value proposition, and 51 per cent say their organization needs to improve their talent management processes to enhance the employee experience.
When it comes to looking for technology solutions to mitigate some of these people risks, “HR and risk professionals need to be at the table to talk about their perspectives in this area,” Ms. Schmidt says, as 40 per cent of Canadians surveyed said they are concerned that their senior leadership expects that an enterprise-wide technology can solve all of the problems.
This may not always be the case when you have to serve a diverse set of employees, with diverse needs.
“As you increase the complexity of an organization, and its demographics, the complexity of the administration increases,” she says.
She says that creating a benefits program that works for 10 people is different from creating one that works for 50,000. Especially when you consider that many organizations have full-time and part-time employees, union and non-union employees and executives who may have slightly different needs and programs.
She says there is a new generation coming into the workforce who value different things. Along with that, people are facing different stressors, which means different risks and opportunities for a business.
“It’s time to act,” she says. “It’s a business imperative to consider the health and the productivity of your people, and the resiliency of your people, because it’s going to impact the resiliency of your business.”
What I’m reading around the web
- Personality tests have been around for decades and more people are being asked to take them at work. Here’s why people love them, which ones are best and why it can be a risky tool if taken too seriously.
- According to this article in Adweek, ignoring women over 40 in your advertising and media spend can mean a ton of lost potential revenue.
- Failure can be scary, but many innovators and thought leaders like Adam Grant embrace it. He says people should consider creating a ‘failure budget’, which entails setting a goal for the number of times you want to fail within a period of time.
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