SR:500 special report: why talent threats must rise up the risk agenda

Around the globe, risk leaders are re-evaluating the workforce.

Whether navigating the effects of localisation policies, mounting attrition pressures, or AI-driven hiring dilemmas, organisations are beginning to treat people risk not just as an HR concern, but as a fundamental component of business resilience.

This is particularly true in the Middle East where, until recently, talent challenges were seen as operational issues. Now, amid macroeconomic and geopolitical volatility, many risk leaders are asking: How do we structure, motivate and retain the workforce needed to navigate long-term uncertainty?

One senior executive described the shift in thinking as a response to deepening uncertainty. Talent, once treated as a cost centre, is now seen as a risk control, particularly as businesses face unpredictable change across multiple fronts.

Reassuringly, our panel said that organisations that have historically approached people management through the lens of cost control are now reframing it through the lens of continuity and crisis response. One likened the workforce to a supply chain of critical capability, but argued that where physical supply chains have redundancy and risk-mapping, people systems rarely do.

Risk managers can play a pivotal role here by helping their organisations to model human capital dependencies, identifying single points of failure and designing contingencies for high-risk roles and teams.

This approach forces organisations to think more holistically about workforce risk, not just as recruitment and turnover, but morale, engagement, mental well-being and long-term succession planning. The conversation then shifts from cost optimisation to capability resilience.

And risk managers should ask whether their workforce is positioned and supported to adapt under uncertainty – not just deliver under stability.

BLUE- AND WHITE-COLLAR WORKFORCE RISKS

Across the Middle East, employers are grappling with increasingly complex workforce dynamics, especially as traditional talent pipelines shift and employee expectations rise.

Risk leaders must manage very different sets of challenges across operational and professional roles, with implications for recruitment, retention and resilience.

Vibhuti Bhushan, chief audit, risk and compliance officer at RAK Ceramics, highlighted the growing complexity of managing talent across both blue- and white-collar segments. “Earlier there was a large arbitrage delta between this part of the world and home countries… That arbitrage delta has diminished,” he said. “And that is making it harder to get people – along with inflation, which has risen.”

He noted that this trend, combined with higher expectations in home countries and rising living costs in the Gulf, is reshaping the economic viability of overseas employment. In response, organisations across sectors, including manufacturing, logistics, construction and services, are adjusting shift lengths and improving contract terms to reflect international labour standards.

These efforts are not just about compliance but about maintaining competitive employer status in a global market.

For instance, one panellist shared that their firm has introduced study leave and internal mobility programmes to encourage long-term retention, while others are investing in structured onboarding and career development pathways aimed at building loyalty and reducing churn.

Bhushan added that external scrutiny is accelerating this shift. “Your customers are forcing you to change,” he said, citing examples where global clients insist on audits aligned with International Labour Organization principles. This has encouraged many firms to move beyond compliance minimums and adopt more progressive workforce policies.

“Attracting qualitative talent especially in the risk domain has become extremely difficult.

When it comes to hiring white-collar professionals, a different challenge emerges. AI-generated CVs, often crafted with tools like ChatGPT, have made it increasingly difficult to evaluate candidates effectively. “You meet them in person… and you realise that it’s not quite there, because they don’t have ChatGPT beside them while they’re interviewing,” said Peter Smith, consultant and former head of governance, risk, business process and insurance at Dubai Airports.

The panel warned that poorly equipped HR teams often compound this issue, relying on keyword searches to shortlist candidates without understanding the nuance of technical roles. However, in response to this, the group noted a reassuring trend towards decentralised recruitment, where line managers lead the vetting process and HR facilitates structure and compliance.

Ramesh Gopal, chief risk officer for the UAE and Saudi Arabia at Deutsche Bank, also raised concerns about the enduring perception gap around careers in the Middle East. “Attracting qualitative talent especially in the risk domain has become extremely difficult.

This region has been a victim of stereotyping and labelling that has happened over a period of time… The labelling is changing but it’s taking time.”

Many international professionals have been hesitant to make the Gulf their home, but Gopal noted: “This impression is slightly fading, with many experiencing the international mindset here.”

Fully changing this perception will require more consistent alignment between rhetoric and lived employee experience. While legislative change is slowly addressing issues around benefits, work-life balance and equal treatment, the mismatch between policy and perception continues to affect recruitment.

ENGAGEMENT AS A CULTURAL KPI

Engagement emerged as one of the most crucial and under-measured dimensions of people risk.

Disengaged employees, speakers warned, may not make errors deliberately, but they are more likely to miss red flags, overlook issues, and fail to challenge flawed decisions.

Bhushan said disengagement often goes unnoticed until it affects performance. “Attrition gets measured. Engagement rarely does… Disengagement is far more insidious. You can’t always see it, but it shows up in your results. A disengaged employee doesn’t speak up. They don’t challenge poor decisions.”

To tackle engagement, forward-thinking firms are now building ‘talent benches’ and embedding ESG-linked engagement indicators. One speaker said his company maps internal mobility patterns and uses exit interviews to monitor cultural health. Others are using wellness initiatives – such as mental health first aiders – to strengthen psychological safety.

“Attrition gets measured. Engagement rarely does… Disengagement is far more insidious.”

Several speakers noted the growing impact of mental health on workforce stability. “You lose people not just through resignation, but through disengagement and burnout,” one noted.

In response, some firms are tracking absenteeism, internal mobility and overtime as early warning indicators. Others are embedding psychological safety metrics into their operational risk frameworks, recognising that a culture of silence or fear often precedes major failures. For risk professionals, these non-financial signals can provide a vital proxy for future risk exposure.

Speakers stressed that engagement is not simply a matter of surveys. One had recently changed the survey cadence to every six months, but more critically, had launched a parallel manager coaching programme to interpret and act on the findings. Risk leaders should treat engagement as a lead indicator for performance, culture and resilience.

Saurabh Dubey, managing director at Protiviti, said: “We are not investing enough time and training into making our managers more effective managers.”

THINK INTERNATIONAL

As the roundtable discussion progressed, a recurring theme emerged: despite the breadth and depth of its impact, people risk is still not treated with the rigour applied to financial or operational threats.

For many participants, this was not just a gap – but a governance failure. “People risk is the quintessential threat and opportunity… It should be the highest risk on your radar,” said Smith.

Organisations are now categorising people risk into sub-classes: key person dependency, morale risk, HR process failure, and succession exposure. Others are introducing engagement scores and exit interview analytics into board packs.

A few are exploring forward-looking metrics, such as ‘time to recovery’ from a critical team loss, or combining absenteeism, overtime and productivity data into early-warning dashboards. These efforts mirror cyber and operational risk models, and show that workforce fragility can and should be quantified.

“People risk is the quintessential threat and opportunity… It should be the highest risk on your radar.”

Organisations are aligning Middle Eastern HR policies with international standards. These changes include expanded parental leave, more flexible remote work arrangements, and growing access to mental health benefits.

In some cases, global head offices have helped drive consistency across regions; in others, local leadership has taken the initiative in response to talent shortages and rising employee expectations.

These shifts are helping to close the gap between external perception and internal progress. For risk managers, it underscores the importance of benchmarking people propositions against global expectations, not just regional norms – especially in markets competing for mobile international talent.

A CALL TO ACTION: SHIFT YOUR FOCUS

As risk leaders assess an increasingly interconnected threat landscape, people risk must rise in prominence – not just because of workforce dynamics, but because it shapes every other risk category.

Smith said: “This is very much the biggest opportunity a business has – having the right people to achieve their objectives. But equally, if you don’t do it right, it’s the biggest threat to achieving those objectives. It should be the highest risk on your radar. The big quantifiable risks get the headlines, but this is bubbling constantly and should be taken as seriously by your organisation and your board.”

Ramesh Gopal added: “Just like how you focused on fostering your economic development, start focusing – or continue focusing – on the people development… It’s the people.”

“This is very much the biggest opportunity a business has – having the right people to achieve their objectives.”

Dubey summarised with three priorities: “First, when attracting talent, it is important that we define the right talent for different industries. Secondly, we should have proper people governance in place. And thirdly, managing talent must go beyond the performance appraisal process – we need continuous motivation, engagement and dynamic performance recognition.”

Bhushan reinforced that message: “Particularly in uncertain and unpredictable times… you need engaged people. Historically, people risk gets looked at below the other risks. Perhaps this hierarchy needs to be relooked. Maybe you need to put this far above.”

Together, our panellists’ comments underscore a clear call to action. In a region characterised by rapid growth, localisation mandates and fierce global competition, risk managers must elevate people risk on their registers – and integrate it into resilience planning, not just HR strategy.

People are not a cost to manage – they are a system to optimise. For organisations navigating transformation and uncertainty, human capital is the ultimate shock absorber. Those who do will not only retain top talent, they will build the resilience needed to adapt, pivot and grow in a world defined by disruption.