As organisations embrace working from home, digital solutions, and technology-first strategies, HR and risk managers are facing increasing business risks involving cybersecurity, digital delivery of benefits, and how to manage technology skills gaps.
Rapid digital transformation is the ‘new norm’ and organisations are not only having to make changes to their business delivery, but are also expected to do more to create a truly digital work experience for their employees. The situation has undoubtedly been accelerated by COVID-19 and the urgent shift to remote or flexible working.
Historically, people management practices have not kept pace with other technological developments and risks involving cybersecurity, loss of personal information, and system obsolescence have increased as a result of how HR data is maintained, and how the benefits and other HR programs are delivered.
A report from Mercer Marsh Benefits has highlighted the people-related risks that firms need to address, specifically, the misalignment of HR and business strategy, whereby workforce planning, organisational change management, and HR/benefit technologies and processes are inconsistent with the overall strategic business vision.
Similarly, gaps in workforce skillsets due to rapid digitisation and automation can result in unmet business goals and poor cybersecurity can result in more sophisticated and frequent cybercrimes, including those that stem from people management processes and vendors leading to business interruption and reputational damage.
Another issue businesses should be mindful of is breaches in data privacy, particularly those that result in loss or misuse of personal information.
Finally, an organisations failure to capitalise on technological advances that will make HR activities, benefits, and healthcare more personalised, convenient, and secure will impact the employee experience.
On a more positive note accelerated digitisation has led to an explosion in digital health and well-being programs, which have become more relevant and have gained significant traction during the pandemic.
Julio Garcia-Villalon, Mercer Marsh Benefits Leader- MEA, explains, “As employee expectations change, employers will increasingly be required to transform how benefits are delivered. 40% of workers admit they are less likely to leave the company if their employer promotes or sponsors digital health solutions. As such, HR teams must design employee experiences that are fit for a flexible, digital working environment.”
Mercer Marsh Benefits have identified six questions those responsible for HR and risk must ask to ensure that policies and practices are relevant and effective in the modern era:
1. Are we confident the risk of a breach associated with HR data is sufficiently mitigated?
Are employees’ personal details such as salary or dependent information being shared with third parties using spreadsheets? Is that a risk you are comfortable with? 53% of employers believe their current HR technology processes and procedures expose them to undue risk.
2. Are our HR processes aligned to the employee experience we are seeking to create?
In 2020, 81% of employers said that achieving a ‘globally consistent employee experience’ is a ‘high priority’, and its importance has increased year-on-year since 2018.
3. Have we modernised our health programs in light of a rapidly changing digital health ecosystem?
Prior to the pandemic, 68% of employers said they were likely to invest in digital health in the next five years. Interest was strongest among employers in high-tech, manufacturing/construction, and financial services/insurance.
4. What is our digitisation strategy?
Make sure you know who is driving digitisation in your organisation, and what contribution is needed from HR and the enterprise risk management team in order to craft a cohesive digital agenda.
5. Have we assessed the impact to our people, programs, and infrastructure with a cyber-lens?
As HR processes involve a lot of personal data, evaluate HR practices to determine how to treat, terminate, transfer, or tolerate cyber risk.
6. Is our employee experience for managing benefits “consumer grade”?
For many employees, enrolling and accessing benefits is a very paper intensive and frustrating experience. Over the coming years, the bar will continue to be raised. At a minimum, even if programs are highly fragmented, employers must determine what their “front door” to health, risk protection, and well-being programs is and then work to continuously improve by delivering a more simple, fun, and integrated experience over time.
Garcia-Villalon, concludes, “Businesses are embracing technological developments and seeing the clear benefits that a digital-first organisational strategy can bring. However, HR departments are failing to keep pace, and rising cybersecurity and data privacy concerns – especially in light of remote working, high volumes of employee benefits data, and vulnerable processes – goes beyond a HR role.
“As such, HR is being challenged to accelerate digital transformation, but can only do so by ensuring that the HR strategy is in alignment with the business vision and protected through a risk lens. We urge HR and risk management teams to work together to seize the opportunities to transform programs and embrace the employee health, well-being, and risk protection benefits that digitalisation can bring.”