Talent attraction, retention and engagement has emerged as the top workforce risk and the most pertinent threat for employers in Asia. Cybersecurity and data privacy were ranked second and third respectively.
This is according to The Five Pillars of People Risk: Managing risks for workforce and business resilience, a new report by Mercer Marsh Benefits (MMB) which surveyed 1,380+ participants globally, including HR professionals and Risk Managers across Asia.
The COVID-19 pandemic has accelerated the transformation of work and workplaces and reshaped employer and employee expectations, heightening people risks related to talent management, technology adoption, business continuity and culture. Companies’ ability to address these threats adequately will be crucial for protecting business operations, revenue, reputation, and talent acquisition.
Asia’s Top Workforce Risks and Implications
72% of respondents in Asia ranked talent attraction, retention and engagement as a serious and top risk for their organisation. Asia is faced with a growing shortage of skilled workers, exacerbated by widespread societal aging as well as rapid advances in artificial intelligence (AI), robotics and other emerging technologies that are transforming jobs and the skills needed to do them. The World Economic Forum1 estimates that more than half of all employees will require significant reskilling in the next three years.
Adding to this challenge is the ongoing disruption brought on by the pandemic, which will keep business strategies highly dynamic, adding complexity to ongoing talent needs. While HR plays a critical role in shaping policies to restructure the workforce, reskill employees and redesign the work experience, only 18.9% of the respondents reflected that this responsibility lies with HR. Failure by companies to create a strong talent pipeline, compelling employee value proposition and to reskill and upskill to future-ready their employees will lead to an unmotivated workforce and the loss of key talent.
58.9% of respondents in Asia acknowledged the severe impact cybersecurity would have on the business and nearly half (47.2%) considered data privacy having the potential to cause severe impacts to the business. This aligns with the increasingly sophisticated and frequent cybercrimes that have elevated these risks on the C-suite agenda.
Businesses with disparate digital systems across geographies or organisational functions increase 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.
Commenting on the findings, Joan Collar, Managing Director, Asia Regional Leader, MMB, said: “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. It is critical that health is made a business imperative with strong support from risk managers, finance as well as the executive sponsors alongside HR. Firms need to plan ahead for the design, delivery and financing of solutions that enhance access to quality healthcare.“
Asia’s Blind Spots
Overall, the top 3 risks in Asia were similar to the global ranking, although Asia was the only region to rank talent attraction, retention and engagement as the top risk. While workforce exhaustion and deteriorating mental health were identified as two of the top 10 risks globally, they were not considered as top 10 risks in Asia.
According to Mercer’s Healthy Minds at Work report in 2020, stress levels of employees have tripled since the onset of the pandemic. High work demands have emerged as the top driver of stress across workplaces in Asia. Failure to recognise and address workforce exhaustion and deteriorating mental health as critical risks can lead to errors and omissions that result in potential cybersecurity breaches, high employee turnover and reduced productivity.
Based on the survey findings, employers in Asia need to do more in this area. Only half of the respondents (50.3%) saw workforce exhaustion as having a significant impact on businesses with only 58.9% indicating they are addressing the risk to great or some extent. As for deteriorating mental health, only four in 10 (41.1%) acknowledged the potential severe impact on their organisations, with 56.4% addressing the risk to great or some extent.
Another blind spot is non-communicable health conditions (NCDs) which is one of the risks with the lowest extent of being addressed. NCDs are the leading causes of death and disability globally and is estimated to have caused 10.4 million deaths in South-East Asia. Health On Demand, a research conducted by Mercer Marsh Benefits, Mercer and Oliver Wyman, found that 43% of both employers and employees want a more ‘pro-health’ environment at work, and more than half of senior decision makers agreed that health and well-being investment would be a greater priority for their organisations in the future. These findings show the opportunity for employers to play a more active role in helping their workforce to achieve better health outcomes, and get the unprecedented ability to achieve a competitive advantage.
The Five Pillars of People Risk report also examined the core barriers preventing organisations from tackling their people-related risks. Across all areas of risk, a lack of senior leadership engagement and skilled resources to understand and address risks were the two primary difficulties highlighted. This underscored the disconnect between what firms say they are prioritising, and the resources being allocated to address the risks.
There is nothing more critical to the health of a business than the health of its people. The pandemic has highlighted opportunities – and a need – for companies to re-evaluate their approach to supporting employees, be it through more effective benefit plans, a sharper focus on reskilling and upskilling their workforce or creating higher value jobs through job redesign. Leading companies who seize the opportunity will create meaningful and measurable impact not just for their employees but also their stakeholders and society.
