Hong Kong, 1 September 2022 – Cybersecurity and data privacy, pandemics and other communicable health conditions and the impact of automation and AI are ranked as the top three people-related risks by companies in Hong Kong.
This is according to a new report by Mercer Marsh Benefits (MMB) – People Risk: Resetting priorities to manage risks for workforce and business resilience – which surveyed over 100 human resources and risk professionals in Hong Kong, analyzing the top 25 people risks as well as the main barriers organizations face in managing these threats.
Increasingly, sophisticated and frequent cybercrimes continued to push the cybersecurity and data privacy threat up the C-suite agenda. Yet, only 40% of the respondents in Hong Kong believe that their organization has effective cyber security policies, controls and systems in place.
As one of the few markets in the world that continue to have stringent COVID travel restrictions and intermittent lockdowns, HR and risk managers still view pandemics as a top risk. Only 45% of the survey’s respondents stated they have pandemic preparedness measures in place, showing that there is still anxiety and uncertainty about COVID and its impact on businesses.
The impact of automation and AI (#3) was ranked much higher in Hong Kong as a people risk compared to #9 globally. This reflects how the pandemic has changed the world of work and accelerated digitalization, from working from home to the use of telemedicine. While 71% of the respondents in Hong Kong state that their organization is addressing the impact of automation and AI, challenges remain. The lack of skilled resources, difficulties in changing personal behaviors and the lack of senior leadership vision were identified as the main barriers to dealing with challenges related to accelerated digitalization.
Richard Roper, MMB Leader, Hong Kong said, “The lack of skilled resources is a common thread and it is either the #1 or #2 barrier to address the people risks across all five areas covered in our survey. The rapid pace of change shows that organizations can no longer simply react to circumstances as they unfold. Instead, they must pick up the lessons learnt from the pandemic and proactively put in place, an integrated, consistent and human-centered approach to anticipate and mitigate risk, while also keeping a lookout for the well-being of their employees.”
Health and safety is potentially a serious business threat
Though 86% of companies in Hong Kong regard health and safety as a serious threat to the business, risks such as workforce exhaustion (ranked #20) and mental health (#22) have been deprioritized. Almost half of the survey’s respondents are not addressing both risks and only 48% of them have effective policies and practices in place to support a culture of employee health and well-being.
Mr Roper added, “The focus on more immediate threats may have come at the expense of support for employees. Investing in employee health and safety enables an environment where people can thrive. Organizations who establish this as a top priority, focusing on preventive measures and supporting employees through their unique health journeys, will not only be able to contain medical claims, but also increase productivity and enhance attraction, retention and engagement.”
Rising health costs could be a blind spot
Spikes in the cost of employer-sponsored health care have also brought administration and fiduciary risk to the fore. However, this is slightly muted (65% in HK) compared to peers in Asia (76%) and globally (70%), and it is potentially a blind spot for companies as wage inflation and rising healthcare costs continue to put pressure on budgets.
Furthermore, the report also highlighted differences in priorities for HR leaders and risk managers, specifically in the areas of talent practices and cost of employee benefits. Risk managers prioritized talent attraction, retention and engagement (#3) and increasing health, risk protection and well-being benefit costs (#6), but HR leaders in Hong Kong only ranked them #13 and #12 respectively.
Mr Roper said, “In both these areas, our data suggests that many Hong Kong firms are still behind the curve. Fortunately, almost half of them agree that an articulated cost containment strategy is critical. For a start, HR and risk management teams must start working more closely together to optimize benefits spend through design, reduced health risks and securing the best deals from insurers, for their people.”
About Mercer Marsh Benefits
Mercer Marsh Benefits (MMB) was born out of the unification of one of the world’s most respected HR consultancies, the global leader in people risk advisory and the number one disruptive benefits technology firm to form one unique business. Together they have shaped some of the world’s most loved employee benefit experiences for small companies, growing enterprises and global firms. MMB is 7,000 strong, on the ground in 73 countries, and servicing clients in more than 150 countries. It brings local expertise to more places and works side-by-side with clients, and Mercer and Marsh colleagues around the world. Mercer and Marsh are two businesses of Marsh McLennan (NYSE: MMC), together with Guy Carpenter and Oliver Wyman. The Company’s 81,000 colleagues advise clients in more than 130 countries. With annual revenue of almost $20 billion, through its market-leading companies Marsh McLennan helps clients navigate an increasingly dynamic and complex environment.
Marsh is the world’s leading insurance broker and risk advisor. With over 45,000 colleagues operating in 130 countries, Marsh serves commercial and individual clients with data-driven risk solutions and advisory services. Marsh is a business of Marsh McLennan (NYSE: MMC), the world’s leading professional services firm in the areas of risk, strategy and people. With annual revenue nearly $20 billion, Marsh McLennan helps clients navigate an increasingly dynamic and complex environment through four market-leading businesses: Marsh, Guy Carpenter, Mercer and Oliver Wyman. For more information, visit mmc.com, follow us on LinkedIn and Twitter or subscribe to BRINK.
Mercer believes in building brighter futures by redefining the world of work, reshaping retirement and investment outcomes, and unlocking real health and well-being. Mercer’s approximately 25,000 employees are based in 43 countries and the firm operates in 130 countries. Mercer is a business of Marsh McLennan (NYSE: MMC), the world’s leading professional services firm in the areas of risk, strategy and people, with 83,000 colleagues and annual revenue of approximately $20 billion. Through its market-leading businesses including Marsh, Guy Carpenter and Oliver Wyman, Marsh McLennan helps clients navigate an increasingly dynamic and complex environment. For more information, visit mercer.com. Follow Mercer on LinkedIn and Twitter.