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HR Professionals Concerned About Ineffective Leadership

Mercer and Marsh, businesses of Marsh McLennan, the world’s leading professional services firm in the areas of risk, strategy, and people, has released its U.S. People Risk 2024 Report. Based on responses from more than 1,000 risk and HR professionals nationwide, the survey reveals that ineffective leadership is viewed as the biggest people risk facing organizations today, followed by improper rewards decision-making, and increasing health and benefit costs. Risk managers also identified a lack of cybersecurity knowledge and mismanagement of AI as key people threats in 2024.  

“The breadth and depth of intersecting risks organizations face today is staggering,” says Susan Potter, Mercer’s U.S. and Canada region president. “People are an organization’s most important asset, but they can also expose organizations to risk without the right culture, policies, and training. By taking a proactive, predictive, and disciplined approach to people risk management, businesses will be better prepared to help their people and businesses thrive in this increasingly complex risk environment.”  

Risk and HR managers have several concerns related to ineffective leadership at their organizations. According to the report, one-third (34%) of employers are concerned about significant dependencies on key people and inadequate succession planning. Only 30% feel they currently have an effective workforce strategy where talent can be acquired, grown, and deployed based on skills. Additionally, one out of three (35%) respondents say they are concerned ineffective leadership will lead to a negative organizational culture or work environment, tense team dynamics, and mistrust.  

A recent Mercer survey shows that the average per-employee cost of employer-sponsored health insurance rose by 5.2% in 2023. The report finds more than one in three risk and HR professionals are concerned about significantly increasing medical costs beyond general inflation. Nearly a quarter (24%) say their organizations do not have an articulated cost containment strategy in place, and 37% cite concerns about limited available strategies to control costs beyond benefit reduction. 

Risk and HR managers also cite concerns regarding improper rewards decision-making, the second most highly-ranked risk for both HR managers and the U.S. overall. Four in 10 share concerns with making benefit decisions without considering long-term impact, and 39% are voicing concerns about making benefit decisions without considering the impact on employees. 

Nearly half (43%) say they are concerned about the increased risk of cyberattacks due to lack of cybersecurity awareness among their people, and 34% say they are concerned with employees’ over-reliance on and complete trust in AI-generated content.  

Despite these challenges, 97% of risk and HR managers say their organization is collaborating to mitigate various people risks, and respondents at organizations with a great deal of collaboration overwhelmingly report higher numbers of risks being managed “very well.”  

The results indicate that the stronger the partnership between risk and HR teams, the more effective risk mitigation measures will be. “Leaders should encourage risk and HR professionals to work together to build a risk management culture,” says Michelle Sartain, Marsh’s U.S. and Canada president. “Through collaboration, they can better analyze and address the people risks inherent in the business environment.”  

Tags: HR Leadership

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