How organisations in Asia can better manage people risk
Talent attraction, retention and engagement represents one of the key concerns for organisations in Asia as they continue to tackle people-related risks because of the pandemic.
In a new report titled The Five Pillars of People Risk: Asia, Mercer Marsh Benefits (MMB) found many business leaders believe that talent practices pose a “serious threat” to their businesses and having the right talent and a future-ready workforce are crucial for firms to drive innovation, growth and long-term success.
The report also identified and examined the most pertinent stakeholder threats to employers in Asia today, and provides a roadmap for businesses to identify, understand and prioritise the risks that need to be addressed to minimise impact.
It is noteworthy that workforce exhaustion and deteriorating mental health were not considered as top 10 risks in Asia. Asia also placed a higher emphasis on risks such as misalignment of HR and business strategy (#6), labour and employee relations (#7), environment (#9) and the changing nature of work (#10). Interestingly, these 4 risks did not appear in the global top 10.
“The pandemic has accelerated people risks to the top of the pedometer for risk managers. Poorly designed employee benefit plans can undermine the health and engagement of employees and not to mention, the employer branding of a firm.” – Joan Collar, Asia and Pacific Regional Leader, Mercer Marsh Benefits.
Where talent practices in Asia are concerned, organisations are urged to adopt a skills-based workforce strategy that allows them to proactively identify future skills needs and develop an actionable plan to retain, build, buy and deploy talent in a marketplace facing a growing shortage of skilled workers.
Health and Safety
Burnout also needs to be addressed, with fatigued employees unlikely to embrace reskilling or organisational changes. Workforce exhaustion also leads to errors, high employee turnover, lack of engagement, reduced productivity and damaged brand reputation.
MMB recommended that employers broaden their view of what motivates employees, including reviewing existing employee benefit programmes, tailoring them to fit for purpose according to the industry the company is in and their employees’ demographics, and design benefits that truly benefit employees with more elements of choice, high-value care and digital services.
With the digital transformation continuing to accelerate in Asia, organisations are also moving to address cybersecurity and data privacy issues.
Businesses with disparate digital systems across geographies or organisational functions, for instance, risk increasing their exposure to cyberattacks. The breaches, which occur due to poor vendor and people management processes, can cause severe business interruption and brand reputation damage.
To mitigate the risks associated with accelerated digitisation, organisations can utilise a single global platform for benefits management that provides consistency, as well as security and data analytics, says MMB.
Governance and Financial
Organisations in Asia also expect health, risk protection and well-being costs to increase over the next three years, driven partly by the pandemic.
To address the rising costs of medical benefits, businesses need to have a risk management framework in place to reduce the frequency, impact and duration of medical and disability claims. Businesses, MMB suggested, should look to implement flexible and preventive care to help employees with their health and well-being.
Collar added, “It is critical that health is made a business imperative with strong support from risk managers, finance and risk executive sponsors alongside HR. Firms need to plan ahead for the design, delivery and financing of solutions that enhance access to quality healthcare.”
Environmental and Social
Rounding up the risks that organisations in Asia should look out for is the potential for labour and employee relations to have a catastrophic or high impact on business if conflicts or issues were to occur.
Poor labour and employee relations, MMB explained, may lead to a higher volume of labour grievances, a perception of an uncaring culture or a lack of desirable company purpose. This can impact brand reputation, leading to difficulties in attracting and retaining talent.
Organisations can address this risk by implementing inclusive benefits and using benefits benchmarking among industry peers to understand where they rank as an employer of choice. Benefits benchmarking, however, should be used as part of an overall review of the employee value proposition and not in isolation, MMB added.
Click here for the full report and find out how employee benefits can be used strategically to manage a range of threats and build workforce and business resilience.
Join Joan Collar, Asia and Pacific Regional Leaders, Mercer Marsh Benefits, at HR Tech Festival Asia Online 2021, where her session titled Top 10 People-Related Risks in Asia: HR Versus Risk Manager will be taking place on Wednesday, September 22 at 2.10pm (SGT).