An unhappy workforce is a dangerous workforce, as stressed employees are more prone to mistakes, ethical lapses or just moving on. But while they can’t fix a poor culture, working with HR to enhance employee benefits can signifi cantly boost wellbeing, and lower your people risk.
If there’s a cadre of professionals organisations must have absolute confidence in, it’s their lawyers.
Poor decisions expose firms to untold risk. And yet, according to Carla Hoppe, founder of financial literacy consultancy, Wealthbrite, it’s exactly the lack of one key benefit – mental health training and financial wellness learning – that she believes is driving lawyer confidence to crisis point.
“Wellness among legal professions is at an alltime low,” says Hoppe, who works directly with The Solicitors Charity, which aims to boost wellbeing by imparting financial knowledge.
“Lawyers are the people that everyone expects to be experts,” she says. “But with this comes crippling pressure. Combine this with a company culture that says they can’t be wrong, not only does it create intense and heightened worry, but even riskier behaviours can potentially ensue, such as them trying to cover an error up – which only makes matters worse.”
ALL RISK IS PEOPLE RISK
For Hoppe, this reality is a perfect example of how people can be less a company’s ‘greatest asset’, and more its greatest risk.
But it’s also why she feels HR must take on a greater role working with risk managers to come up with solutions that mitigate this risk – through the benefits they can provide.
“Risk arises from stresses in the system. It’s when you start looking at the role that benefits can play to improve wellness, avoid certain conduct, raise happiness and create better resilience among staff, that you see how HR and risk management should be better aligned to reduce risk.”
While it’s true to say benefits have always been used to a drive and reward key behaviours, there is an increasing recognition that benefits can play a strategic role in reducing risk.
Mercer specifically calls this EBRM, or employee benefit risk management. In its own 2023 poll of top risks for UK businesses, many were specifically people-linked – from employers’ ability to attract and retain top talent to attitudes to wellbeing.It highlighted risks not just from direct employees, but also from staff in an organisation’s supply chains.
A whopping 80% of the top risks in Aon’s recent Global Risk Management Survey were people related. These included threats to business continuity and even cybersecurity risks due to employee disengagement, demotivation and attrition of key talent.
TOP TIPS FROM AN HR CONSULTANT
Natalie Ellie, HR consultant and director at Rebox HR, explains that employee benefits can be a powerful risk management tool, addressing many people-related business risks. She offers a number of recommendations.
- Introduce ‘values-aligned’ benefits. These reflect company values (sustainability allowances, volunteering time) and can strengthen culture and reduce value misalignment risk.
- Think about operational risk: Salary sacrifice schemes, financial education, and emergency savings programmes can reduce financial stress that impacts concentration and performance.
- Prioritise mental health benefits: Employee assistance programmes, therapy, and mental wellbeing apps can mitigate stress-related productivity losses.
DATA DEMANDS
Proving causality – that a specific benefit yields a specific result – has always been a problem, but this is where it’s hoped things are changing. “
Just in the last six months, we’ve created a people risk committee comprising benefits specialists,” says David Collington, partner and head of benefit consulting at Barnett Waddingham.
“They’re tasked with linking risk and benefits into quantifiable evidence.” He adds: “It seems lots of people instinctively know about risk; but the data piece is often what’s missing.”
It’s already known that some benefits levers can be pulled to yield specific responses. David Joerring, CEO and founder at HealthKey, gives one example. “We find that when you offer an online GP service to staff
and dependants, there is an increase in retention of between 31–33%,” he says. He explains that a health-focused risk-aware retention strategy can make a significant difference, considering replacing employees costs 50–200% of that person’s annual salary.
“I think the financials around risk are finally putting benefits up the strategic chain. For many firms, not being able to recruit is now a strategic risk on its own. As companies downsize, or even try to reduce perceived risk using AI, the actual result is that risk increases, because companies become more exposed to the risk carried by the smaller numbers of people left behind.”
“Benefits chiefs and risk chiefs have a tendency to swim in their own lanes. The people function and risk function need to be more joined up”
What detractors will often raise, however, is that benefits seldom work in isolation. As Joerring says: “Benefits can’t fix a bad culture.”
Collington adds: “We recently worked with a client that had two di¡erent locations, each with identical benefits. In one, the people-related risk metrics weretwice as bad. That was clearly down to how managers ran each site very differently.”
Also, while risk officers will often seek to reduce health-related risks, for example by introducing wellbeing benefits, to reduce insurance premiums, Collington notes that often, while real risks do fall, insurance costs rise.Staff are actually accessing their health perks.
As such, he says HR and risk experts need to work together. Jeff Fox, strategic consulting lead in the employee and people solutions practice at Lockton, adds: “Benefits chiefs and risk chiefs have a tendency to swim in their own lanes. The people function and risk function need to be more joined up, to produce more of a comprehensive risk register. A partnership approach is needed, but also a change in mindset about what ‘risk’ means.”
Joerring believes that all of a company’s risk is essentially people risk, and that’s the big shift in thinking that is needed.
CASE STUDY: PROTECTION AGAINST PHISHING VULNERABILITY
One major provider of global precision surgical instruments and consumables recently identified that the risk of it succumbing to intellectual property theft, compliance violations, cybersecurity threats and ransomware attacks was rising.
In partnership with Meta1st, an AI-driven human risk management provider, real-time, scenario-based cybersecurity training was provided to surgeons and administrative staff who were identified as being prime targets for phishing, social engineering and credential theft.
Support also came in the form of real-time simulated phishing attack training (comprising scenarios mimicking cyber threats targeting medical technology firms); personalised training modules; as well as tailored risk training for surgeons, engineers, and sales representatives handling sensitive data.
Behavioural risk scoring was carried out to identify high-risk employees and departments were targeted for risk mitigation. The result was an 80% reduction in successful phishing attempts within six months as well as Improved regulatory compliance and reduced legal and financial exposure.”
Qasim Bhatti, CEO Meta1st, says: “Strategic risk management is paramount in the high-stakes environment of healthcare. The medical sector is particularly vulnerable to human-centric risks, including social engineering attacks, compliance failures and insider threats. Strategic risk in healthcare is inextricably linked to human risk and an effective human risk management strategy.”
A LEAP OF FAITH
But when benefits thinking does get joined up with risk, big things can happen. Collington worked with an airport group whose employee health scores were poor, and so it advised off
ering an all-company employer-funded healthcare policy. He says: “There was a significant 15% reduction in sickness absence, and turnover of staff. Without data proving the intervention, it wouldn’t have been a conversation the risk team could have had.”
And it goes further than that. Claire Williams, chief people and operations officer at HR software provider Ciphr, says: “Beyond retention, benefits help safeguard against workforce-related risks such as burnout, human error, poor decision-making, and ethical lapses, creating a more stable and productive workforce, and reducing costly errors and compliance failures.”
“With benefits, risk experts do sometimes have to have faith”
So will benefits and risk head soon be talking each other’s language? The hope is that they will, believes Mike Laird, head of risk at Personal Group: “The science of risk is constantly evolving, and we as professionals need to evolve to meet that risk.”
“Something like disengagement can be accidental or on purpose – and when it’s the latter, it’s most dangerous. But managing risk involves creating a good employee value proposition that gives people a sense they’re being nurtured. I truly believe that reward and benefits drive preferred behaviours. I’m now personally involved in a lot more of what HR does.”
Many will be glad of this, including Hoppe: “Risk managers have their fingers on the pulse – of what risk is, and how they mitigate it. When people aren’t operating at their best, everything may start to fall apart.”
Collington concludes that it’s a question of trust: “With benefits, risk experts do sometimes have to have faith. The results can take a while to come through – but if properly applied based on rigorous assessment of need and results – it’s likely they will come!”
