Unlocking

opportunities
to manage
workforce risk
Preparing for the future by
aligning workforce risk strategies
with employee needs
Unlocking opportunities to manage workforce risk. Preparing for the future by aligning workforce risk strategies with employee needs. 2

Unlocking opportunities to manage workforce risk

Figure 1:
Preparing for the future by aligning Aligning workforce
workforce risk management strategies risk management Talent
strategies with attraction and
with employees’ wants and needs. employees’ wants retention
and needs
To manage and address people risks effectively, HR
teams and risk managers need to work closely together,
and risk management strategies must be aligned with
employees’ needs to ensure a resilient business.

However, as set out following, there’s plenty of evidence

that employers are missing the mark when it comes to
managing people risks effectively. If these failures are
left unaddressed, they can have negative repercussions Climate Crisis
for organizations of all types. change management

People
By combining the results of our Health on Demand
2023 and our People Risk 2022 research reports, we’ve
identified four key areas where businesses must focus

risk
their attention: talent attraction and retention, crisis
management, mental health, and climate change.

Mental
We learned that managing people-related health
risks depends heavily on close collaboration
between HR and risk managers.
Hervé Balzano, President,
Health & Benefits at Mercer and
Global Leader at MMB
Unlocking opportunities to manage workforce risk. Preparing for the future by aligning workforce risk strategies with employee needs. 3

People, purpose and profit are the keys to organizational Figure 2: Risk management is evolving to
success. This means risk management can’t be focused look at people, purpose and profit
solely on physical assets. As organizations reset for
relevance in this fast-changing world of struggling health
systems, violent conflict and misinformation, they must
People Purpose Profit
focus not only on the needs of investors and customers,
Keys to organizational
but also on the needs of their employees.
success
When determining what makes the most sense for their
organizations in the long term, leaders should consider
people and purpose alongside profit to ensure the
resilience of their organizations, now and into the future.
Strong Valued
To be resilient and react to crises with agility, organizations foundation trust
Resilience and agility
need strong foundational business practices. They enablers
should also prioritize the preservation of trust among
their employees and other stakeholders through strong
communications backed by tangible action.

HR and Risk
must work
together to
Enterprise risk tackle people
management
risks

People, purpose, and profit are the keys to organizational

success — reinforcing risk management beyond physical
assets to people-centric values is crucial.
Dan Aronson,
US Casualty Practice Leader at Marsh
Unlocking opportunities to manage workforce risk. Preparing for the future by aligning workforce risk strategies with employee needs.
Talent attraction
and retention
When we speak to business leaders, risk managers and
heads of HR about what keeps them up at night, the war
for talent is a consistent theme. Workforce attrition, in
particular, can lead to a loss of valuable knowledge and
expertise. And the financial impact of attrition shouldn’t
be overlooked either — each time an organization loses
an employee, it costs the business money.
To mitigate these risks and attract new employees,
it’s crucial to implement robust retention strategies,
including attractive employee benefits programs.
Yet, according to our People Risk 2022 report,
43% of organizations think their
employee value propositions (EVPs)
need improvement or don’t know
how effective their EVPs are.
This is a significant wake-up call
— a clearly articulated and well-understood EVP
can mean the difference between winning and losing
in the war for skills.
4
Figure 3: The employee value proposition encompasses Meanwhile, despite the fact that benefits play an
purpose, career, well-being and rewards increasingly critical role in the attraction, engagement
and retention of key talent, just 59% of employees
say the benefits they receive meet their needs. For
instance, our Health on Demand research shows that
Fulfilling 72% of employees whose employers provide them
Purpose with 10 or more core benefits say they’re less likely
to move to another company because of the benefits
they receive. By comparison, just 43% of people whose
employers provide only one to four benefits say the
level of benefits they receive makes them less likely to
move to another employer.
Enriching
Careers Well-being
Flexibility
Equitable
Compensation Benefits
Unlocking opportunities to manage workforce risk. Preparing for the future 5
by aligning workforce risk strategies with employee needs.

Figure 4: The level of health and well-being benefits

received from my employer makes me less likely to
move elsewhere
Takeaway for
72%
employers
62%

Employers who offer benefits that meet the needs of individuals

have a significant advantage. Steps you can take:
43%

1 2
32%

Get to know your employees. Apply a Align your benefits offering with your
segmentation approach, understanding company’s purpose, and think about how
how your current benefits program to successfully communicate your EVP.
0 benefits 1-4 benefits 5-9 benefits 10+ benefits
supports different types of employees.
For example, consider employees’ life
Source: Mercer Marsh Benefits. Health on Demand 2023. stages and health concerns, and think
about the responsibilities shouldered by
different groups, such as women.
While it’s clear that the more benefits employees
receive, the less likely they are to leave their employers,
the fundamentals matter most.

Providing foundational benefits, such

as life and medical coverage, ensures
that people’s basic needs are met. Such
benefits are the keystone to a successful
EVP. Without them, you won’t be able to
manage your people risk.
Unlocking opportunities to manage workforce risk. Preparing for the future by aligning workforce risk strategies with employee needs. 6

Crisis
management

The most pressing people risks in 2022 included

cybersecurity and data privacy (#1), catastrophic urces
a l reso
personal life events (#3) and pandemics (#5). These tur ons
employee risks, alongside the multiple, concurrent f na diti
o o n
ck hc
crises (“polycrises”) that many employers now face,
can overwhelm organizations. Together, they show the
La
h e alt
o n tat
ion Polycrisis concerns
ic fr
on
importance of crisis management for all businesses.
Ch ron
m
ic c
r
n e ge
o sio
n
for employee
no esio
Figure 5:
Concurrent
o
ec coh e ch
an
y health and benefit
al at uit
So o
crises impacting
il m ineq
managers
Ge
businesses and s
ci C l los
their workforces ita y
g it
rs ease
ve
od i
Dis
sd ion
i at g
u
Bi

io rm ivin
l
ct

fo of
fe

in
In

is

st
M
Co
Unlocking opportunities to manage workforce risk. Preparing for the future 7
by aligning workforce risk strategies with employee needs.

This marries up with how employees

are feeling. When we asked workers Takeaway for
about their states of mind, they
said they were concerned about a employers
myriad of risks, including economic

1 2
conditions, health crises and
pandemics, and even violent crime.
The good news is that 67% of employees think their
employers would support them in an emergency or
time of need. Encouragingly, we found that “people To ensure business continuity, HR must Be creative in how you provide support
safety” was the most cited driver of business planning collaborate with risk management to employees when they face the
discussions for CEOs and CFOs in 2023.1 colleagues when planning for the “moments that matter,” and consider
“what ifs,” including the impact of any ways to protect employees when they’re
When employees are let down by their employers in challenges on employees and their not at work. For example, think about the
times of crisis, they vote with their feet, and a firm’s personal lives. Scenario planning best ways to let employees know about
wider reputation may be tarnished. Organizations can help you anticipate and manage the help and resources available to them
must be able to retain the trust of their employees by polycrises and will help ensure that in a crisis situation (such as digital health
putting measures in place to support people through concurrent risks have fewer unexpected advice, emergency savings accounts and
catastrophic personal life events. consequences for both the business and financial support).
the workforce.

1
Mercer. Beat the Crisis: How Executives Are Responding to Economic Shocks
and Talent Shortages, 2023.
Threats like workplace violence and climate events
Unlocking opportunities to manage workforce risk. Preparing for the future by aligning workforce risk strategies with employee needs.

require proactive planning

Figure 6: Crisis-management planning

Recover Assess
Recover Assess
• Post-incident analysis • Security, vulnerability
• Post incident
• Updatedanalysis
plans and •andSecurity, vulnerability,
threat assessments threat
procedures
• Update plans and assessments
• Threat policies and
procedures
• Continued mental
procedures
health support
• Threat policies and procedures
• Employee on- and off-
• Continued mental
• Continuity of operations •boarding policies and
Employee
procedures
on- and
off-boarding
health support policies and procedures
• Mental health and EAP
• Continuity of operations
Crisis •program
Mental health and
adequacy

program adequacy
EAP

mitigation
plan
Respond Prepare
• In-the-moment • Emergency response plan
Respond
emergency response, Prepare
• Drills and exercises
crisis management and
• In the moment emergency
crisis communications ••Crisis
Emergency
managementresponse plan
communications
response, crisis
• Mental management
health resources • Drills and exercises
and trauma support
and crisis communications • Awareness, trainings and
•briefings
Crisisfor
management
employees
• Mental health resources and and managers
communications
trauma support
• Awareness, trainings, briefings:
employees, managers
Unlocking opportunities to manage workforce risk. Preparing
2Preparingfor
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thefuture
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Mental health
and workforce
exhaustion

Our Health on Demand research found that 47% of In addition to providing strong mental health supports Figure 7: Employees cite work pressures, poor leadership and
employees are stressed in their everyday lives. Following and benefits, organizations must ensure that they’re toxic culture as their top potential causes of burnout
the pandemic, higher numbers of people are now fostering a psychologically safe workplace.
exhibiting signs of depression and anxiety.2 Concerns Potential burnout factors
about the current economic downturns, war and violent It’s important that leaders, risk
crime create additional stress and can cause mental Work pressures 54%
health and well-being to deteriorate further.
managers and HR teams highlight
and address practices within their Poor leadership 39%
High levels of stress and anxiety can also have a organizations that can lead to poor 37%
negative impact on how employees assess and avoid Toxic culture
potential hazards in the workplace. If a person’s ability
mental health.
Job security 35%
to recognize workplace hazards is lowered, or if they’re
Examples of potential burnout factors include work
so distracted that they can’t follow safe work procedures, Lack of flexibility in
pressures, poor leadership and a toxic work culture. 31%
accidents can occur. schedule/location
Dangerous work
28%
Worryingly, mental health was flagged as a blind spot environment
for employers in our People Risk research, falling in the Lack of connection
24%
rankings to #20 out of 25 risks. with colleagues
Source:
Lack of purpose 23% Mercer Marsh
Benefits.
Technological Health on
16%
change Demand 2023.

2
World Health Organization. “COVID-19 Pandemic Triggers 25% Increase in Prevalence of Anxiety and Depression Worldwide,” March 2, 2022, available at https://www.who.int/news/item/02-03-2022-covid-19-pandemic-triggers-25-
increase-in-prevalence-of-anxiety-and-depression-worldwide.
Unlocking opportunities to manage workforce risk. Preparing for the future 10
by aligning workforce risk strategies with employee needs.

Gaps in mental health programs are well understood Takeaway for

employers
(see MMB’s Health Trends 2023 research). A holistic
approach to mental health supports should encompass:

•  raining for colleagues

T

1 2 3
and managers

• Self-care

• Early intervention
Fill any gaps in the mental
• Adequate treatment
health benefits coverage
you provide for your entire
• Care for specialized needs
employee population. Don’t
forget preventive healthcare
• Crisis support
supports and virtual care.
Recognize that how Train frontline
work is designed supervisors to recognize
and managed is just the signs and symptoms
as important for an of stress, and make sure
emotionally healthy they understand the
workforce. Consider company procedures
interviewing different to follow when stress is
levels of leadership, identified. Highlight the
and tap into employee general procedures that
networks to understand should be used to ensure
the organizational all work practices are safe.
stressors your people
face. Use the results of
your research to devise
a plan to address any
problems.
Unlocking opportunities to manage workforce risk. Preparing for the future by aligning workforce risk strategies with employee needs. 11

Figure 8: Fostering a psychologically safe workplace

Ethics Action
• Define team values • Trust people to
and behaviors work independently
• Be firm with
negative behaviors
Fostering a • Admit mistakes

psychologically
safe workplace

Boundaries Innovation
• Set reasonable • Allow people to tap
expectations into their strengths
• Be patient • Learn collectively
from mistakes

Belonging
• Be inclusive in idea-sharing
and decision-making
• Show vulnerability
• Allow others to be themselves
Unlocking opportunities to manage workforce risk. Preparing for the future by aligning workforce risk strategies with employee needs.
Climate change
and sustainability
This years’ Global Risks Report identified the second-
highest short-term global risk as “natural disasters and
extreme weather.” This was borne out in our People Risk
research, which found that environment was a top-10
people risk globally.
The environment is also critically important to the
workforce. Environmental factors are only a part of
environmental, social and governance (ESG), and it
is important to also focus on the social aspects.
66%
of employees want their employers to support
environmental sustainability through internal and
external statements and actions
42%
are extremely or very concerned about climate events
having an impact on them or their families
43%
would find it useful to receive a benefit that helps
them live a more environmentally friendly lifestyle
12
Consequently, organizations are feeling pressure
from customers, investors, employees and regulators
to ensure that profit doesn’t come at the expense of
society or the planet, along with pressure to give back
to communities. However, despite these strong drivers
for managing environmental risks, just 41% of HR and
risk managers say they have clear policies to reduce
their organizations’ carbon footprints and to address the
impact they have on climate change.
Organizations should recognize that addressing
ESG issues holistically means focusing on the “S” in
ESG. One way to do this is to look at healthcare and
financial wellness benefits through an ESG lens. This
type of benefit is still largely targeted at the top of the
organizational pyramid, yet certain groups, such as
women and low-paid or part-time employees, are less
likely to be confident that they can afford the healthcare
they need. Extending coverage to these groups to
address their unique needs can bridge this inequality.
Unlocking opportunities to manage workforce risk. Preparing for the future 13
by aligning workforce risk strategies with employee needs.

Figure 9: Health equity starts with affordability, but some

employees are less confident they can afford the healthcare
Takeaway for
they need
employers
Percent of employees who are not

1 2
confident they can afford healthcare ...

Median income Below

and above median
if household
income is ... 15% 31% Ensure that the external voice you direct to
investors and the market mirrors how you’re
supporting your employees.
Use authentic communications to take
a stand on the issues that align with your
company purpose and values and where
you can have an impact.
Male Female

18% 26%
3 4
if gender is ...

Full time Part time

if work
status is ... 20% 29% Consider how your organization can
implement benefits aligned with those
values. For example, look at how the benefits
Explore ways to go beyond standard
market practice and offer more relevant
benefits to the most vulnerable groups
Source: Mercer Marsh Benefits. Health on Demand 2023. you offer can support the environment. within your workplace.

Companies have a clear opportunity to make themselves

more attractive to potential and current employees
and differentiate themselves by demonstrating a real
commitment to social issues and sustainability.
Unlocking opportunities to manage workforce risk. Preparing for the future by aligning workforce risk strategies with employee needs. 14

Figure 10: Benefits programs can support the environment too

Evaluate community,
Modernize the benefits you provide
organizational and supply chain
vulnerability and resilience • Promote and offer employee programs to
support net zero goals and climate adaptation
• Redesign car, cycling and transportation policies
• Offer sustainable investment options
under savings plans
• Prepare employees to mitigate against heat,
flood and other climate events

Adapt how people can

Get involved internally and access and use programs
externally to advance change • Use digital health to provide a vital
• Create cross-functional risk connection during future crises and
evaluations and frameworks reduce unnecessary commuting
• Partner to create healthy • Use digital vs paper administration
and resilient communities and communication
• Consider efforts to help mitigate • Participate in audits of supply chains
against biodiversity loss for appropriate standards
Unlocking opportunities to manage workforce risk. Preparing for the future by aligning workforce risk strategies with employee needs. 15

Conclusion
Figure 11: Applying
Moving forward — Adopting a an enterprise risk
Risk identification

risk management framework management approach

to people risks enhances
The COVID-19 pandemic, the war in Ukraine, climate agility and resilience
change and other world issues are changing how
organizations ensure the safety of their workforces
Identify
and strive for business resilience.

It’s clear that greater collaboration To learn more,

between HR and risk managers — download our
Health on Demand
and the diversity of thinking that
and People Risk
comes with it — leads to better risk reports now.
management. Enterprise
risk management
HR and risk management teams must work Monitor and Analyze and
review approach
together using an enterprise risk management assess
approach (see Figure 11) built around identifying,
assessing, managing and monitoring risk. Applying
this framework to people risks enhances agility Key risk indicators Qualitative analysis
and resilience. Key control indicators Quantitative analysis

This methodology has stood the test of time and

can be applied to all the key risks highlighted by People
our research. In fact, a risk management approach
to designing, delivering and financing employee
Risk
Respond Resetting priorities to

benefits can help mitigate every people risk manage risks for workforce

and control
and business resilience

outlined above.

Treat, terminate,
transfer or tolerate
For further information, please contact your local Mercer Marsh
Benefits office.

Marsh McLennan businesses provide a range of solutions to help

you build a resilient workforce and business, including:

• Benefits strategy, broking, design, financing and delivery

• Health and well-being, including mental health and longevity
• Global benefits
• Business continuity
• Enterprise risk management
• Business resiliency and crisis management
• Cybersecurity risk management
• Environmental, social and governance (ESG)
• Diversity, equity and inclusion
• Workforce communications
• Flexible working and work design
• Employee experience, listening and total rewards
• Living wage
• Retirement

About Mercer Marsh Benefits™

Mercer Marsh Benefits provides clients with one source for managing the
costs, people risks, and complexities of employee benefits. The network is
a combination of Mercer and Marsh experts working across 130 countries
to develop local solutions drawn from global expertise. Mercer and Marsh
are businesses of Marsh McLennan (NYSE: MMC), the world’s leading
professional services firm in the areas of risk, strategy and people, with more
than 85,000 colleagues and annual revenue of over $20 billion. Through
its market-leading businesses including Guy Carpenter and Oliver Wyman,
Marsh McLennan helps clients navigate an increasingly dynamic and
complex environment. For more information, visit marshmclennan.com,
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