Managing Human Capital Risk
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In many companies, human capital accounts for at least half of operating costs and can have a significant impact on business results. While companies identify, assess, prioritize, and treat companywide risks through enterprise risk management, most omit human capital risk (HCR) altogether or focus on a narrow range of issues, such as succession planning and the leadership pipeline.
This report presents the results of a survey of 161 companies on the state of their human capital risk assessment and management in answer to the following questions:
- How mature are companies’ ERM and strategic workforce planning processes?
- How does human capital risk stack up against other kinds business risks? Which human capital risks are most important?
- How well do leaders understand HCR?
- Do companies have a formal process to assess HCR? A standing group to oversee HCR? Who participates?
- How effectively do companies assess and manage HCR?