Marsh explains the five pillars of risk | Insurance Business Australia – Insurance Business

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A new report by Mercer Marsh Benefits (MMB) has found that cyber security, deteriorating mental health and workforce exhaustion are seen as the top people related threats facing the workforce.

The report, The Five Pillars of People Risk, is based on a survey of more than 1,000 HR and risk managers across Asia, Europe, the Americas, Africa and the Middle East.

“It was good to get validation regarding the significance of people-related risks, with respondents perceiving the majority of the risks to have a high likelihood of occurring and said they are expected to have significant impacts on their business,” said Sarah Brown (pictured), head of Mercer Marsh Benefits, Pacific.

Brown and her team were surprised by the disconnect in recognising the role of executive leadership in managing these risks. Only about 20% of organizations reported this leadership as the ultimate stakeholder responsible for addressing these risks.

“However, when identifying the barriers to addressing risks, lack of senior leadership engagement ranked fourth after lack of skilled resources, lack of budget and confusion over who is responsible for the risk!” she said.

The data also showed interesting differences between the perspective of Australian risk managers and HR professionals versus their international counterparts.

“The global data showed far better recognition for the need for senior leadership engagement to more adequately respond to these risks than in Australia,” said Brown.

Skills obsolescence ranked very highly as the second top concern among risk managers. Brown said this reflects how many organisations are reworking and changing their business models.

“This has led organisations to also assess the skills they need both from an organisational perspective and an individual employee perspective. For example, many industries that were not leveraging technology for product development and distribution of their goods and services, found themselves with both a skills gap and, in many instances, skills obsolescence, in how they execute their previous business strategy in a pandemic world,” she said.

Brown said both cyber security and supply chains are examples of where organisations need to develop skills quickly and where existing skills can become obsolete.

Read next: Marsh head on “scary” number of cyber claims

“For leaders, it is all about providing leadership in a distributed working environment. Some of the skills the employees had developed over the years to meet these challenges were in fact obsolete and/or needed to be developed further, and organisations are spending both money and resources supporting them,” she said.

With cyber security, survey participants ranked it as the overall top risk but the extent to which organisations are addressing this was ranked at number 10.

“Seventy-nine per cent (79%) said they have the right culture to address the risk. Seventy per cent (70%) said they have the budget to address the risk. But only 60% say they have the right resources to address the risk, highlighting the need for expert advice to address the issue,” said Brown.

Brown said she wasn’t surprised by the high risk ranking of mental health and workforce exhaustion.

“Mental health has always been a hot topic in corporate Australia, however, it has also always been something organisations have struggled to address,” she said.

She said workforce exhaustion’s number three ranking as a people risk but ranking at 14 for the extent to which organizations are addressing it, demonstrated this struggle.

Brown added that the COVID-19 pandemic had impacted mental health issues.

“However, this had been a growing area of concern for some years prior. Firstly, in this digital age, the boundaries between work and life are blurred. People are expected to be ‘on’ at all times, leading to a growing issue of workforce exhaustion,” she said.

Part of this, she explained was because modern technology and remote work have connected us to work more than ever.

Read next: Study highlights lack of mental-health support in small businesses

“This is what leads to exhaustion because we can’t switch off. With our clients, it comes up all the time. Our focus on mental health training right now is all about emotional agility, emotional regulation and setting boundaries for better health and wellbeing,” she said.

The extreme events in Australia over the last few years, including bushfires and floods, have also heightened general stress levels, she said.

“People were already worn out from having to respond to these moments,” said Brown.

She said the realization that businesses lack the capability to address mental health issues is now more prominent.

“Workforces don’t have the frameworks, the literacy, the training and capability to manage a mental health situation. The pandemic has elevated awareness and the need for action, and with raised awareness comes resourcing. Through navigating the pandemic, we are getting to a point where identifying mental health issues is getting better, but the next phase is what to do about it,” said Brown.

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