Historically, risk professionals have tended to think about people risk as risk to employees, for example, from poor safety practices, or kidnap & ransom. Part of an organisation’s duty of care to employees includes implementing policies and procedures to alleviate these risks and also protecting the organisation (and individuals) through insurance.
Human Resource managers, on the other hand, have tended to think about people risk as risk to the organisation from human factors. These can be varied and broad, for example, the risks associated with the total cost of reward and benefits, the ability to attract, retain and engage the right talent, and the impact on reputation and financial performance from individual or team actions, for example, instances of mis-selling in financial services.
These viewpoints tend to exist in silos within organisations, despite many of the priorities of Risk Management and HR increasingly converging. In the 2019 Airmic member survey*, risk professionals identified loss of reputation (76%) as the top-of-mind business risk, while the failure to attract and retain talent was high on their radar too (43%).
There is advantage to be gained from adopting a more joined-up approach and thinking about people risk as two sides of the same coin – risk to your employees and risk to your organisation from people factors. Doing this means risk and HR professionals working more closely together and, indeed, the tools used in programmes such as ERM and risk assessment or rewards optimisation are very similar. If this synthesis of viewpoints leads to a better employee experience, increased productivity and decreased cost of risk, what’s not to like?
*Risk Management 2020 Vision. The 2019 Airmic Survey.