Mitigating People Risks: Building employee resilience in your organisation

Insight

4 minutes

25 November 2024

People-related threats are often overlooked by risk management teams but they can significantly affect an organisation’s performance, productivity and resilience.
 

These human factors underpin, intertwine with, and impact the everyday enterprise risks that risk managers are trying to insure, such as cyber threats, talent loss, and ESG.

If unmanaged, people risks can hinder growth and stability, leading to hidden costs, higher premiums, and even operational failure.

But what are people risks costing your organisation, and how can risk managers subvert traditional models to build a holistic approach that understands the causes and effects of people risk and how to mitigate these threats.

This article builds on insights from Strategic Risk, adding further analysis and actionable recommendations.

Understanding People Risks - People risks are those that come from the workforce and how it is managed. These risks can manifest in various forms, including:

Overwork, stress, and insufficient mental health support significantly affect workforce morale, productivity, and overall organisational performance.

Attracting and retaining top talent in a dynamic job market requires adaptive strategies that cater to diverse skills and generational needs. Creating flexible career paths, fostering a supportive work environment, and embracing diversity, organisations can better meet workforce demands.

Compliance expectations vary widely across industries and regions, influenced by local regulations and cultural norms. Balancing rising healthcare costs, inflation, and evolving workforce needs with industry-specific requirements and regional compliance is crucial for offering competitive and sustainable programmes.

Greater reliance on digital tools increases exposure to cyber risks, such as data breaches and operational disruptions. Employee errors and insufficient training in cybersecurity protocols are common vulnerabilities.

Environmental challenges, such as extreme weather events, natural disasters, and shifting climate patterns, create risks for employee safety and business continuity. Many organisations have insurance to protect their facilities, but have not thought about what happens when employees homes are flooded and critical infrastructure is shut down.

Mark Ramsook
It is time for companies to rethink how they assess risk, moving beyond traditional asset-based models to include more comprehensive strategies that address the human factors driving business risk.
Mark Ramsook
Mark Ramsook, Executive Director at Howden Employee Benefits

How to Mitigate People Risks - At Howden, we believe that there are four key strategies for addressing people risks effectively:

Embed People Risks into Organisational Strategy

Treat people risks as a fundamental part of your overall risk management strategy. This means embedding what have traditionally been HR responsibilities within your risk framework, This will help your organisation to move away from approaching people risks as one-off incidences, managed in siloes and ensures they receive the same strategic focus as other critical risks, such as cybersecurity or financial threats.

Take advantage of data and feedback

Behavioural analytics techniques can help you understand the root causes of people risks and the unique triggers that exist within your organisation. This can help you to manage threats before they escalate. Continuous feedback and employee engagement surveys all you to keep your finger on the pulse of your workforce and spot issues on the horizon.

Prioritise prevention and holistic workforce health

Invest in initiatives that address mental health, promote flexible working, and build a strong workplace culture. This reduces employee burnout and fosters engagement.

Stay agile

Proactively mitigate risks by investing in initiatives that support mental health, enhance workforce flexibility, and strengthen organisational culture. These measures not only reduce the likelihood of employee burnout but also minimise disruptions and ensure a more engaged, productive workforce—ultimately protecting your business from costly people-related risks.

Building Resilience Together

Mitigating people risks is a continuous process that requires cross-functional collaboration and alignment with organisational goals. It is not just about addressing immediate concerns but embedding people risk management into broader strategies to create a resilient and adaptable workforce.

For further insights and an in-depth exploration of people risks, visit the original article on Strategic Risk Global.
 

Do you know what people risks are costing your business?

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