How to manage people-risk and win the war for talent

An organisation that cannot attract, retain and motivate key talent is doomed to fail.

Without the right people in place, innovation falters, operations are disrupted, customers are let down, and reputation plummets.

So, what strategies are leading risk managers and their organisations adopting to manage peoplerelated threats? In October, StrategicRISK held a webinar to find out.

Our experts agreed that talent risks are growing, in part driven by the COVID-19 pandemic and the wave of resignations that followed it.

Mike Naulls, UK corporate growth leader at Mercer Marsh Benefits, says: ”Businesses these days are facing enormous challenges. They’ve got to balance inflationary pressures, labour market and supply chain disruption, and, of course, organisations still need to be productive and successful. People are key.”

Afiong Ekong, director of human resources at Crawford, adds: “In 2020, research found that 43% of people were extremely likely to considerbchanging jobs in the next year, and key reasons for that were based on factors including work/life balance, work environment flexibility and, of course, the industry in which they’re working.”

Businesses that want to successfully manage people-related risks must position themselves as employers of choice. Risk managers must start by understanding the key drivers of talent gaps within their organisations.

WIDER NET, WIDER TALENT POOL

One key issue is that organisations from multiple sectors are all competing for the same talent, particularly when it comes down to technological know-how. Naulls explains: “There is high demand for expertise in certain fields. I was speaking to a national water board about their challenges around recruitment, and they’re having to compete with tech firms and financial services for data scientists.”

Matt Handley, chief risk officer at Handelsbanken, agrees that getting the right digital skills can be difficult but adds that another key issue is when skills fall out of favour and become harder to find.

“We have a large number of relationship managers in our branches,” he says. “As banks in the UK move away from having local branches, the skillsets are dwindling. So a key risk is fi nding a way to attract individuals that will become the branch managers of the future.”

A key step to attracting the skills required is to broaden the pool of candidates you’re selecting from. For Crawford, this meant a wholesale change in the way the company thinks about recruitment.

Ekong says: ”Pre-pandemic, the approach to recruitment was rigid. It was Monday to Friday, 9–5, and we used to advertise in specific geographic areas with quite rigid terms and conditions. This generally produced a small talent pool within our industry, and we often exhausted it.

“We’re also looking at ways in which we can help people, particularly women who’ve been in the financial services industry and have had a break, return to banking” 

“We were able to change to hybrid, making smarter and more flexible working decisions, and improved employee engagement. This not only significantly widened our talent pool, but it allowed us to recruit nationwide for most of our vacancies.”

She adds that the organisation has shifted away from hiring people based on their experience and is instead looking for transferable skills like customer service and integrity, accountability, and desire to learn. Employees can then build up expertise internally through training.

For Handelsbanken, a big focus has been looking at the employee value proposition and bringing it to life through communications. This led to a tenfold increase in internal uptake, but also impacted positively on recruitment.

Handley says: ”People were proud to share those stories, so we also got a secondary benefit, which was that our colleagues were talking to their friends and saying, ‘well, why don’t you come and work for us, because we offer this great package’.

“We’re also looking at ways in which we can help people, particularly women who’ve been in the financial services industry and have had a break, return to banking. We had a fantastic uptake and it’s really adding value into our organisation.”

CHERISHING KEY EMPLOYEES

While attracting new talent is crucial for businesses, our panellists agreed that retaining existing skills is even more important. Firms need to think carefully about succession planning, not just in terms of retaining knowledge, but also sharing and transferring it.

Crawford is tackling this by building an inclusive culture. The company’s internal mobility is at its highest ever rate, at 42%, because developing and progressing internal talent is a key priority.

“Because we’re getting closer to helping employees achieve their career goals, we’re seeing people who’ve left the business come back”

Crawford’s people development director Luke Brannigan says: “We’re doing huge amount of work around internal mobility, and we’re looking to shape our internal recruitment strategy. We’d much rather bring someone through the organisation internally because you’ve got all those added benefits around understanding the culture, processes and way of doing things.

“We’re also looking at how we transfer expertise down through the organisation. We’re a fantastically diverse company so we want to share that knowledge. 

“A huge amount of work has been going on in the last 12 months around building out our training proposition. We’re putting that in front of colleagues, and they’re helping us understand where the gaps are in terms of their own technical knowledge. Because we’re getting closer to helping employees achieve their career goals, we’re seeing people who’ve left the business come back, because we’ve got more to offer.”

MOVING BEYOND PAY

Key to becoming an employer of choice is ensuring that your organisation’s employee value proposition is strong. As many employers are struggling to increase salaries, they must focus on providing holistic rewards and benefits instead.

Naulls says: “Ultimately, pay demands are outstripping what businesses can offer, so, employers need to focus on the employee value proposition. 

“Asking ‘how do I make sure my employees feel that they’re getting real value and being supported?’ becomes even more important, and that helps mitigate risks as well.”

Ekong adds: “Crawford got ahead of the game [after COVID-19] because we swiftly implemented a smarter working policy, which supported our employees, improved engagement, morale and productivity, and ultimately allowed them to have better work life balance with reduced travel time and costs.

“Ultimately, pay demands are outstripping what businesses can offer, so, employers need to focus on the employee value proposition.”

“We enhanced equality, diversity and inclusion across the organisation and we also modernised the business. We worked on our people-first and employee engagement approach, enhancing our family-friendly policies such as maternity, paternity, adoption and fertility leave.”

There is evidence that employees themselves are moving away from pay as a deciding factor in where to work. At Handelsbanken, Handley says that candidates are asking a lot more about investment in their early careers and access to training and external courses.

He says that companies must lean into tailoring learning, communications and development programs to suit a diverse workforce’s preferences, adding: “We don’t pay bonuses as a bank and therefore money is a less important driver for our recruits. They want to join us because they will have accountability, responsibility and a culture that supports them.”

Brannigan adds that businesses need to ask themselves why a smart, energetic, ambitious person would want to work for them.

He explains: “The culture of the business is really important and the opportunities available to get involved in purpose-led work. Going out and helping people put their businesses and lives back together is an undervalued part of our value proposition.”

BURNOUT, HEALTH AND WELLBEING

One often-overlooked aspect of talent risks is the wellbeing of employees. A culture of ill health can be catastrophic, leaving a firm under resourced and unable to continue with business as normal.

Data shows that sickness absence rates are at the highest level for 20 years, in part driven by the effects of the pandemic and flagging public health systems. Mental health is at crisis point with employees struggling with stress, anxiety, depression and burnout.

Employers that want to reduce their talent-related risks and fulfil their duty of care obligations need to find ways to safeguard the health of their employees.

“As organisations we should be reviewing benefit design annually to be sure they meet employee needs and checking if there are additional opportunities.”

Naulls says: “Businesses can provide easier access to mental healthcare through telemedicine. Ensuring that you’ve got the right processes in place to support people when they need care is incredibly important. Think about whether you have designed your benefits in the most effective way possible, and if they are delivering.”

For Crawford, flexibility is a crucial element of safeguarding employee health. The company has introduced hybrid work schedules, so employees needn’t be in the office all the time.

Ekong say: “COVID has transformed how we get medical care. As organisations we should be reviewing benefit design annually to be sure they meet employee needs and checking if there are additional opportunities.

“There’s a huge focus on mental health right now in terms of employee burnout and work life balance, so it’s about providing resources… We also need to right-size workforces so employees are not overwhelmed.”

COLLABORATE WITH HR 

The panellists were clear that organisations must move quickly to win the war for talent. The alternative leaves businesses open to significant risks that could threaten the survival of a company.

Brannigan says: “If we’re not adapting how we are approaching early careers and people coming into the organisation, if we’re not talking about purpose-led work and culture – then we’re going to end up with a scenario where we can’t fill roles.”

“Tap into that resource pool and spend time really understanding what your people want.”

Naulls adds: “To do nothing is almost the biggest risk of all. In the most successful organisations we work with, the partnership between risk management and HR is strong and it delivers value both ways.

“There’s benefit design, placement, insurance and many other areas where you can complement each other. Deliver value for the organisation and for your people by working collaboratively.”

“Handley concludes: “Spend time with your teams – they have the solutions. They’re talking to their colleagues and peers in other firms who are doing things differently. Tap into that resource pool and spend time really understanding what your people want.”