Managing Human Capital Risk

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:

1. How mature are companies’ ERM and strategic workforce planning processes?
2. How does human capital risk stack up against other kinds business risks? Which human capital risks are most important?
3. How well do leaders understand HCR?
4. Do companies have a formal process to assess HCR? A standing group to oversee HCR? Who participates?
5. How effectively do companies assess and manage HCR?