Tackle people risks to minimise business risks 

“Businesses now exist in a state of ‘permacrisis’, dealing with one challenge after another,” said James Crask, Head of Strategic Risk Consulting for Marsh, during our latest panel debate on mitigating risks.

“It’s brought into focus the relevance of people for building resilience. In the past, a lot of resilience planning fell back on technology and physical premises,” he added, “But Covid proved it’s the people that respond to a crisis. They are the asset you need to get the organisation out of difficulty.”

Bonny Payne, Regional Consulting Leader, Mercer Marsh Benefits, agreed saying, “All the risks that are coming out are interlinked from a people angle. Whether that’s cyber security, supply chain and recruitment issues or increasing musculoskeletal claims. It’s important to be agile when responding to issues, but if you don’t plan ahead, you’ll always be in crisis mode.”

James pointed out that people are an important part of the supply chain, “Ukraine taught us that people need to be considered just as critical as a factory process or certain asset might be. The way the software development industry responded to that event and looked after their staff, because they saw them as part of their supply chain, was really interesting.”

A particular area of concern is the impact of the cost-of-living crisis on employees. “We’re starting to see the impact on mental health in the Office of National Statistics data and increasing claims, so need to build employee resilience to cope,” said Mike Naulls, UK Corporate Growth Leader for Mercer Marsh Benefits.

“A top trend is financial education, to make sure employees are getting the most of their salary,” said Bonny. “Salary sacrifice schemes and retail discount schemes are also low cost for the employer but high value for employees,” warning that, “Before adding new benefits, it’s important to identify your key health risks and put in place a plan to match these. That could even be about decluttering and better communicating what you’ve already got to deliver more value for employees and a greater return for the business.”

James stressed the importance of taking a preventative approach:

Thinking ahead was considered critical for reducing risk by all the panellists. “The new kid on the block is sustainability,” said David Wreford, Partner at Mercer. “There are a broad range of risks there, ranging from climate resilience to how the organisation’s approach affects whether or not people will want to work for the company.”

“In the past, organisations could get away with putting out a press release saying: we’re dealing with this situation,” said James. “Now that world has gone, we’re doing much more to help clients responding to a crisis focus on managing internal stakeholders as well.”

When it comes to tackling business risks associated with skills shortages, David said, “We need to think differently about workforce planning and how to draw from subcontractors and other forms of labour.  We know people who favour employment value security, investment in their skills and predictability of income. Those who cherish self-employment might prefer autonomy and flexibility. As we rethink what the workforce looks like, can organisations create hybrid models to give people everything the value? For example, training and development for contractors and term-time working arrangements for working parents.”

“We’re seeing that what people needed before isn’t what they need today in the benefits space as well,” said Bonny. “It’s about recognising that compensation and salary can’t be the only answer. There are different ways of attracting and retaining key talent, such as personalisation of benefits. You have to ask: what do we need for the workforce we need?”

Mike reminded the panel that by 2025 a quarter of the workforce will be generation Z employees, born in the late 90s and first part of this century. “Different generations will want different things,” responded David. “Employers that are having difficulties attracting and retaining talent, or even identifying what the right talent is, need to be flexible and listen to employees to build a proposition that’s fit for the future.”