People risk was highlighted in StrategicRISK’s Asia Risk Report benchmark survey, but not many respondents are involved in HR or employee benefit related issues
The top risks for the SR survey have now been revealed at the Pan-Asia Risk & Insurance Management Association’s (PARIMA) inaugural risk management conference being held in Singapore this week.
‘People risk, talent and retention’ was voted as a major risk by more than 100 of the region’s top corporate risk and insurance managers, second only to ‘economic conditions in key economies’.
Aon Hewitt’s regional director, health and benefits, Terry Stephens said the results of the survey underscored “the growing importance for organisations to integrate their HR-related objectives and practices with their broader commercial goals”.
“In any organisation, particularly those within the services sector, workforce talent and productivity are key drivers of innovation and sustainable competitive advantage that impacts both top and bottom line performance,” Stephens said.
“Across many geographic markets and industry sectors in Asia there is a fierce battle for talent driven by robust economic growth across the region.
“By necessity, HR practitioners are focused upon employee engagement metrics given their correlation with productivity outputs and talent management indices.
“Inevitably, this places the spotlight on an organisation’s remuneration and benefits practice.”
Stephens said that risk and insurance professionals had a “pivotal role to play in assisting their HR colleagues manage organisational health risk”.
“Through the use of intuitive data, they are able to assist in predictive modelling of risk financing expenditure; recommendation of risk financing options, including insured, self-insured and captive arrangements; identifying cost management opportunities in the healthcare supply chain; and development of health risk mitigation programmes that directly address employee lifestyle behaviours that drive the escalating rate of non-communicable diseases,” he said.
Blurring the lines
Executive director of Willis (Singapore) Alex Thoms (pictured) told StrategicRISK that, for many companies, there was often a blurring of the lines in terms of the definition of an employee benefit, and this could mean that people risk wasn’t being looked at in the most effective way.
“As an example, an HR team may typically be responsible for life/medical/health insurance, but a risk manager may typically be responsible for personal accident and workers’ compensation insurances,” Thoms said.
“With this in mind, it’s definitely critical that risk managers and HR teams work closely together – not only will this ensure nothing ‘falls through the cracks’, but it may also facilitate significant efficiency gains, for example in the form of a more cohesive risk retention strategy.
“Linked to this, captives are increasingly being used in other parts of the world to insure employee benefit risks – this could create a great opportunity for increased interaction between risk managers and their HR counterparts.”
The StrategicRISK Asia Risk Report benchmark survey is sponsored by Zurich Insurance and supported by PARIMA. It provides risk and insurance managers with comparative data and additional material to allow them to benchmark their roles, internal risk function, risk priorities and salaries with others in the profession.
The survey identifies alternative career paths into corporate risk management in the Asia-Pacific region; compares the level of experience and qualifications among risk managers; measures the scope of the risk management function across the region; and creates a salary benchmark for the region’s risk profession.
It also reveals the risks that industry practitioners think are most likely to impact their business, and which of these would have the biggest financial impact if they were to occur.