The 'new normal' for business is changing the nature and level of your people risk, however your business has been affected by COVID-19, as Sue Jex explains.
People are the most valuable asset in any organisation but as lockdown eases, organisations need to focus on what the new normal will be for their employees, and how to maintain their culture and engagement. Identifying the risks and scenario planning for the future will be key to making your business more resilient.
A chance to shape emerging people risks
As people adapt to new and different ways of working, new behaviours and attitudes are also being established, shifting the business culture. This presents businesses with an opportunity to mitigate the new emerging risks, ensuring that the culture remains led by core values, supports timely risk decisions and is aligned to the post-pandemic world.
So, what has changed?
At the start of 2020, the top five people risks were:
1 workforce planning
2 key talent retention and development
3 legal and reputational risks
4 people function transformation and systems
5 engagement and inclusion.
For many businesses, the ‘new normal’ has changed the key risks, and it is vital to understand the impact of this change and the possible ramifications.
The type of people risks your organisation faces depends on how COVID-19 has impacted your operations, with businesses accelerating, continuing as before or slumping. This translates into three categories of business:
1 Accelerators – doing more business during the pandemic
2 Maintainers – COVID-19 impact is challenging but maintaining some income
3 Furloughers – significant or even total reductions in business
As the impact and duration of COVID-19 on business remains unknown, organisations could move between these categories as there are surges in some industries and significant decline in others.
An example of this would be in the retail sector where acceleration has placed pressure on staff resources, meaning additional staff have been brought in quickly to cope with the demand. This accelerated phase puts pressure on on-boarding, HR and payroll teams to maintain good controls while meeting demand in a fast-paced environment. As we move beyond the current challenges, the question arises: how will these new recruits be maintained or cut back? This continues the pressure on HR and payroll teams while needing to maintain the organisation’s reputation and culture.
Conversely, the airline and hospitality industries have seen a sharp operational decline resulting in furloughing or staff redundancies and/or positions put on hold. Strategic decisions may need to be taken to ensure the longevity of your organisation. However, the impact on staff mental health and wellbeing must also be considered to ensure the organisation's culture and staff engagement are maintained for the return-to-work phase.
How will your organisation return to business as usual once the lockdown eases? Key issues will centre around elements such as the readiness of staff to return to work, key roles required first, and so on. This heightens the risk of the return- to-work process.
Throughout the pandemic, the impact on organisations may change as the curve flattens, increases or a potential treatment is discovered. This requires ongoing review and assessment of the people risks to ensure your organisation maintains its brand, reputation and culture, during and after the pandemic.
Managing people risk now and later
A structured approach to the people risks being faced both during and post-COVID-19 can help ensure they are addressed and mitigated.
The current pandemic impact and the changing nature of people risks may have increased exposure areas, depending on which of the three categories your business falls into.
The first step is to assess your organisation's category: accelerator, maintainer or furlougher. Then, working through people risk areas, identify the current impact by asking key questions, and scenario plan for future potential impacts. This includes workforce planning, resourcing, benefits and reward. Some risks require a review and adjustment of policies, while others may require a more continuous approach, such as resourcing and future scenario planning.
When we will return to 'business as usual' may be unknown but scenario planning around critical people risks will help you maintain your culture and reputation, and safeguard against financial losses.
How we can help
Starting with understanding your organisation's category, we can help you identify your people risks. We will provide you with a risk map reflecting the risk areas to consider, and key questions to ask during and post-COVID-19.
We can provide you with ongoing assurance for those areas requiring continuous monitoring; remote audits, providing management assurance over specific risks; and data analytics that could assist in your scenario planning and/or strategic decision-making process.
To find out more on how we can support your people risk approach, contact Sue Jex.
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