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The Human Risk Factor
6 February 2012:
When you think about the human resource arena, the word "risk" rarely, if ever, comes to mind. After all, risk typically connotes dangers such as kidnappings, oil spills, cyber warfare or theft. Recruiting, benefits administration and employee development may be perceived as challenging, but hardly risky.
So it's interesting that the 2011 Lloyd's Risk Index, a poll of 500 C-suite and board-level executives that was released in December by the venerable London-based insurance institution, found "talent and skills shortages" to be the No. 2 risk facing businesses, up from 22nd place in 2009. The No. 1 risk in the latest Index was "loss of customers," while "reputational risk" was No. 3.
"We have gone from a credit crunch to a talent crunch, despite the unemployment picture," said Lloyd's CEO, Richard Ward, in announcing the findings.
In addition to their concerns about skills shortages, he said, CEOs are also worried about having leaders and managers who can help them navigate today's difficult business environment.
These findings come as no surprise to Orlando D. Ashford, senior vice president and chief HR officer at New York-based Marsh and McLennan Cos. Inc.
"If you think about the financial meltdown of 2008, it was driven by human capital risks -- you had major companies being brought down by the investment decisions of a few people," says Ashford, who wrote a bylined piece for the June 16, 2011 issue of this magazine on human capital risk entitled "Risk in the Real World." HR leaders deal with risk on an everyday basis -- they just don't think of it that way, he says.
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Source: Human Resources Executive
