Marsh: Latin American firms rank their biggest people-related risks
According to a new report by Mercer Marsh Benefits (MMB), People Risk: Resetting priorities to manage risks for workforce and business resilience, cyber security, program administration, and environmental and social issues are the top people-related risks facing organizations across Latin America.
The report surveyed over 2,500 human resources and risk professionals in 25 countries globally and includes data from over 490 respondents from Latin America. As well as analyzing the top 25 people risks, the report identifies the main barriers organizations face in addressing these threats. Despite being ranked in fourth place in the 2021 edition, mental health dropped 16 places to 20 in this year’s report.
The top five people-related risks identified by respondents in Latin America are:
Cybersecurity and data privacy was ranked as the top risk for for the second consecutive year. Only one in three respondents (35%) believe that they have the right staff to manage the risks of accelerated digitization, while just under half (48%) believe they have effective cybersecurity policies, controls, and support systems –such as multi-factor authentication, vendor management, or data encryption – in place.
One in three respondents stated that competing priorities are a major barrier in addressing administration and fiduciary risks, which includes the management of personal finances, the increased cost of benefits, and decision-making and responsibilities regarding benefits, policies, and rewards.
One in four respondents (24%) believe that they do not have sufficient budget to effectively manage environmental and social risks, such as catastrophic personal life events, the impact of the changing environment, and diversity, equality and inclusion (DE&I) .
Pandemics and communicable health conditions were identified by 76% of respondents as a serious threat to their organizations, with a high potential for disruption; only 49% say they have effective policies, practices, environments and communication to support a culture of health and wellness.
Catastrophic personal life events were named by 58% of respondents, who agreed that they do not have effective insurance policies and programs to protect employees against loss of income due to events such as disability, provide support for rehabilitation, and return to work, and accessible workplaces. Further, one in five respondents said that their organization does not have a plan to promote DE&I.
Ricardo Almeida, Mercer Marsh Benefits Leader for Latin America and the Caribbean, said: "People are a company's greatest resource, but can also be the source of significant risks. Companies in Latin America continue to deal with the impact of the pandemic, violent conflicts such as the war in Ukraine, rising prices due to inflation, and environmental crises. Not surprisingly, all of these have major repercussions on the health and resilience of workers, requiring new perspectives on employee well-being and talent strategy for the changing world of work.
“Mental health represents a worrying blind spot for organizations in Latin America, having dropped from fourth place in 2021 to 20th in 2022. Mental health problems are pervasive and linked to the top five risks, such as catastrophic life events and the changing nature of work; companies must continually advance ways of working, employee support, and leadership skills to address this important issue.”