Abrupt changes to working conditions resulting from the COVID-19 pandemic exposed gaps in people-related risk response capabilities among UK firms, according to a new report by Mercer Marsh Benefits.

Conducted a year after the pandemic was declared, the survey of over 1,300 HR and risk management professionals identified deteriorating mental health, cybersecurity and talent attraction, retention and engagement as main people-related risks for UK firms.

A lack of senior leadership engagement and of skilled resources to understand and address the exposures were flagged as the main barriers to addressing these issues.

The report also revealed some blind spots for organisations, with talent practices and accelerated digitisation identified as the two overarching risk areas with the lowest focus – something that could create longer term issues if not addressed, according to the report’s authors.

Despite the ongoing impact of the pandemic, communicable health conditions were not considered a top ten risk.

Conducted in April, the global survey categorised 25 people risks under five key areas (health and safety, governance and financial, accelerated digitisation, talent practices, and environmental and social) with each risk allocated a risk rating score (via likelihood and impact) to assess the overall threat posed.

“Despite deteriorating mental health being highlighted as a top concern to UK businesses, engagement among executive leadership and board level accountability remains low,” said Chris Bailey, partner and UK&I consulting leader, Mercer Marsh Benefits. “This is particularly worrying as the UK COVID-19 restrictions end and businesses start asking employees to return to workplaces. Now more than ever the wellbeing and mental health of colleagues should be on boardroom agendas. For people related risks to be dealt with effectively, management need to be genuinely engaged and give them the necessary attention. HR teams and risk management professionals must work together and consider the strategies they have in place to mitigate these key risks and, if they don’t look robust, redesign processes, policies and provisions for the future.”

Other findings: Source: Turning People Risk into a Business Opportunity)

While HR and risk departments were fully aligned on cyber and talent as the top two risks at the global level, HR respondents identified succession and key person risk as the third most important; a threat that did not appear in the top 10 for risk managers.

In the UK, both HR professionals and risk managers scored talent attraction, retention and engagement and deteriorating mental health in their top three risks. Despite this consensus, it may be that the rationale for such scoring differs as between UK HR professionals and risk managers. For instance, risk managers may have in mind the risk of employee claims against employers whilst HR may be thinking of maximising employee potential; and both are relevant. The important element is that both agendas are aligned, creating opportunities for both teams to collaborate and create a greater impact.

Diversity, equity and inclusion is the fourth highest people-related risk, highlighting the focus from many firms in getting this right on the back of ongoing world events that have put the spotlight on race and gender inequity. This is also reflected in recent research from MMB and the Reward and Employee Benefits Association, where DEI was seen to be the number one challenge facing organisations in 2021.

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