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Business Transformation Q4 2023

Why employers should understand ‘people risks’ and find solutions

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Dawn Lewis

Editor, Reward & Employee Benefits Association

With many businesses experiencing ongoing change and volatility in the wider economy, business leaders must understand how risks linked to their people could impact their organisation.

Findings from the Reward & Employee Benefits Association (REBA) research ‘People risk strategies for successful business change,’ published in partnership with Mercer Marsh Benefits in October 2023, highlight the areas that employers are focused on to reduce people risks — from an employer’s ability to attract and retain key skills to employees’ health and its impact on a business.

Demand for skills a challenge

People risks can be connected to economic issues — such as pressures on wage inflation — and unique to an organisation, such as the requirement for specialist expertise. The demand for skills, for example, is an area where 70% of REBA’s respondent employers say is a challenge. Managing wage inflation and aligning HR strategy with shifting employee demand is also a priority.

Understanding people risks is key to keeping people engaged, well-led and able to manage change.

Rethinking employee benefits

Additionally, there are longer-term issues to consider. There is a growing need to address risks related to the rise in non-communicable diseases and their impact on absence, retention, productivity (via energy levels) and insurance claims.

REBA’s research shows that employers are acting to alleviate some of these risks. Many are in the process of aligning their human resource strategies to business transformation — 53% plan to re-align their employee benefits.

For example, employees often want to understand an organisation’s stance on the environment and how this relates to their pay and benefits. In response, employers are introducing the option for employees to contribute to a pension that offers an environmentally focused investment fund.

Responding to people risks

As products and services shift to meet market demand, employers are also taking steps to understand what skills and talent will be needed while improving employees’ experience of work.

Understanding people risks is key to keeping people engaged, well-led and able to manage change. Some employers are already focusing on potential solutions, such as improving social connection in the workplace, implementing digital health tools, providing greater job autonomy and addressing employee energy levels to help improve productivity.

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