People-related risk is not normally in the headlines, but in 2020 organisations' responses to world events made regular appearances. Now we understand the challenges, Sue Jex highlights the hot topics in people-related risk that should be on your agenda this year.
For internal audit teams, understanding and assessing people-related risk is more important than ever, and critical to ensuring ongoing business effectiveness and navigating the ‘new normal’ post-COVID-19.
The findings from our risk assessments and audits across a diverse client list showed a change in the priority topics. This was not unexpected in such a year of change, but does mean it is more important than ever for internal audit and human resources teams to know what's on the agenda.
People-related risk: hot topics for 2021
One of the main factors that increases people-related risk is structural changes within an organisation. Downsizing, restructuring and mergers are always happening, but became especially common in 2020. Unfortunately, these changes will continue at an above average frequency in 2021, and likely increase after the end of the Coronavirus Job Retention Scheme (furlough). Organisations that will need to restructure and adopt new strategies, target markets and potentially even new business models will need to factor in managing both the complexities of these changes and mitigation of the consequent people-related risks.
Remote working options are not new, but it was only in 2020 that it became not only normal, but required. It seems likely that remote work will continue to be part of our working patterns in the future. For many employees this is a desirable long term outcome, but, to ensure that it remains an effective pattern for both organisations and individuals, remote work needs to become agile work.
A supportive environment for agile working requires leaders to have a positive approach in multiple areas. These include managing communications and interactions, including the creation of virtual communities. Understanding organisational, team and employee risks when your people are working remotely is challenging, and ranges from wellbeing and working hours to team management and information security.
Health and wellbeing
Organisations are working to understand the risks to employee health and wellbeing exacerbated by the challenges of lockdown and remote work. These risks are heightened for employees who joined during lockdowns and started work before they connected with their colleagues and managers or had an in-person induction or on-boarding. Many of these employees may also have a variety of personal issues impacting on their wellbeing: from home schooling, to a partner becoming unemployed, or suffering a bereavement. Organisations managing this well are those that are adopting a range of measures to both understand and mitigate the risks.
Robust talent management and succession planning to identify, develop and retain critical staff features should be high on all organisations' agendas. New joiners who started remotely, existing employees who are looking to grow and develop, and high-potential employees all need to be managed for flight risk. Significantly, as more people are looking at post-coronavirus lifestyle changes, the competition for talent may not be other businesses but new lifestyles and experiences.
Diversity and inclusion
One of the most pressing issues for organisations to work on is understanding the importance of creating environments that prioritise diversity and inclusion (D&I). As the ongoing Black Lives Matter movement has highlighted, inclusive environments that value diverse workforces are the most successful in attracting and retaining talent. A diverse workforce also brings new ways of thinking and working that only enhance the productivity of an organisation.
Managing people-related risk in 2021
Managing so many people-related risks might seem daunting, but effectively mitigating them usually creates more successful, resilient organisations that are in the best position to cope with future challenges. That is something that should definitely be on your agenda in 2021!
If you would like to discuss any of these issues or have a more general conversation on people-related risk then please contact Sue Jex.
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