Source | The Economic Times
W DELHI: Depicting a challenging scenario around human capital risk (HCR) management in India, a study has found that 62 per cent companies view HCR as an urgent or very important board-level concern, yet only one in three have a formal defined risk mitigation or control strategy in place.
However, pointing out that HCR management will grow in importance, the study found that three out of four respondents plan to invest additional resources in HCR management over the next five years.
The study titled ‘State of Human Capital Risk in India’ done by CII in association with Willis Towers Watson elicited views of nearly 100 CEOs, CHROs and other senior executives in the country spanning a diverse set of industries.
It revealed that majority of the respondents are very concerned about retention of critical talent and leadership bench-strength, even as 41 per cent believe their organisation manages human capital risk effectively, with MNCs reporting considerably greater success than domestic companies.
The study, which defines HCR “as workforce factors and practices that can have a range of possible effects on business performance” observes that rising HR challenges like workforce planning, retention, succession planning and skill gaps will drive organisations to prioritise HCR.
Only 38 per cent of the HR respondents have cited board involvement as an important concern, compared with 62 per cent of CEOs, general counsel and other senior managers.
“The implications of HR risk measurement and mitigation extend beyond pure compliance and organisations must build a more holistic approach. It should be seen as a tool to mitigate financial, operational and reputational risk while delivering a consistent service delivery process leading to an improved overall employee experience,” Vivek Nath, MD-India and South Asia, Willis Towers Watson said.
The top 10 risks cited by the study are insufficient leadership bench-strength; retention of critical talent segments; capability gaps with respect to emerging business/technology; low workforce productivity; inadequate talent attraction programmes.
These also include the lack of compelling capability development and talent management programmes; suboptimal workforce planning and organisation design; lack of business-critical systems; ineffective compensation strategy design and implementation; and failure to deliver on changing business needs and ineffective change management.