Success is the ultimate goal, and business risks could stop you anytime from achieving the targeted goals. That being said, building and managing a business does not only require hard work but also an ability to manage unprecedented risks.
The KPMG 2020 CEO Outlook underscored that leaders realise the upheaval from COVID-19 is weighing on the workforces. CEOs actually cited talent risk as a top threat to business growth, ahead of the supply chain and a return to territorialism. It is just one of many complex challenges for CEOs as the pandemic continues to present a tremendous test of leadership abilities and personal resilience.
The CEO Outlook was first conducted by surveying 1,300 CEOs in January and February 2020, before many key markets felt the full impact of the pandemic crisis. The survey continued in July/August 2020 by conducting a follow-up survey on chief executives across the globe to understand how CEO thinking has evolved during a crisis.
Over the first half of 2020, talent risk rose from 12th place to become the most significant perceived threat to the long-term growth of a business. More than half (51 percent) of C-Suite and HR professionals ranked talent risk as the top risk to future growth, followed by regulatory risk (35 percent) and operational risk (34 percent).
Talent risk itself refers to a risk of attracting and retaining talents needed to compete. Companies capable of attracting and retaining the most talented and suitable individuals can provide a sustainable competitive advantage to their stakeholders.
The report mentioned that organisations might enhance recruitment and retention by embracing flexible work arrangements as these arrangements are quickly becoming a common expectation and even a preference. But the real challenge for HR and operations teams is how to most effectively bridge the gap between the desire to work remotely and the perception among senior management of a possible negative impact on productivity.
Other greatest risks to the company’s development during the COVID-19 crisis are, as follows:
See also: Talent Management Complexity HR Must Solve
The KPMG report further revealed that two-thirds (71 percent) of employees believed the demands of their job have increased in the four months leading up to the survey. And almost half (48 percent) said that their mental health decreased over the same period of time. When asked what their organisation did to provide mental health support, less than half of workers reported that their organisation had taken measures, such as:
The lack of mental health support explained why more than one-third of employees report worsening experiences across the board in some cases. Additionally, compared to all workers surveyed, those in the energy sector reported a decline in their organisation’s culture and their team’s ability to collaborate from the onset of the pandemic through July 2020.
From the research, we can conclude that focusing on employee’s mental health should be paramount to mitigating talent risk. HR professionals should also ensure their organisation’s culture was up to par. Talent managers might also start reevaluating their employee recruitment and retention strategy.
With the most desirable people in increasingly short talent supply, public and private sector employers need to start thinking outside the box when it comes to their traditional sources of talent. Taking the same approach to recruiting – for example, appealing to the same demographics at the same universities – will leave any organisation struggling. So instead, employers can broaden their approaches to plug into, for instance, the relatively young populations throughout their states.
As long as talent managers keep looking for talent in the same places, they might face unnecessary problems. Thus new thinking, untapped talent pools are what’s needed. With some luck, governments will recognise this and tailor immigration policies accordingly.
HR teams should also become flatter in order to encourage innovation. Very simply, most organisations are currently characterised by too many layers between someone with a bright idea and a person who can recognise, reward, sponsor, and develop their idea. Employers need to find a way to flatten workforces, to make their organisations a place where anyone can come forward with an idea and where everyone is comfortable doing this – and knows how to do it.
Moreover, companies, in order to lessen the adverse effects of talent risk, should start looking at talents as a form of currency, essentially seeing their talent as assets that contribute to a company’s profits and losses. Employee’s direct economic contribution is key to the value of a project, product, or service results. In these terms, the talent management conversation needs to happen at a C-suite level, either led by a business-minded HR leader or a business-unit leader.