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Human capital risk management an urgent board level concern

Source | The Times Of India : By Namrata Singh 

MUMBAI: Human capital risk (HCR) management is now an urgent board level concern. A study by CII and Towers Watson found that 62% companies agree with this fact, but only one in three respondents have a formally defined risk mitigation or control strategy in place.

 According to the study, just over 40% believe they are effective at HCR management, with multinational companies being more effective than domestic organisations. The study gathered views of nearly 100 CEOs, CHROs and other senior executives in India spanning a diverse set of industries.
 The study observes that rising HR challenges like workforce planning, retention, succession planning and skill gaps will drive organisations to prioritise HCR management, which, a few years ago, did not even figure on the top agenda of the board and C-suite leadership in Asia. Boards in India are now recognizing the crucial role HCR can play in an organization’s journey.

Harshavardhan Neotia, chairman, CII-Suresh Neotia Centre of Excellence for Leadership, said: “Human Capital is the fulcrum upon which productivity, superior performance and eventually growth now depends. Using the right risk mitigation tools and frameworks – as highlighted in this study – and working with specialists will prepare organisations to effectively manage people-related risks. This will enrich understanding, improve planning and facilitate transitioning from a reactive mode of ‘putting out fire’, to a more pro-active mode of ‘anticipating and warding off fires”’

 According to Vivek Nath, managing director- South Asia (India and South Asia), Willis Towers Watson, “The implications of HR risk measurement and mitigation extend beyond pure compliance and organisations must build a more holistic approach. It should be seen as a tool to mitigate financial, operational and reputational risk while delivering a consistent service delivery process leading to an improved overall employee experience. Getting this equation right will enhance efficiencies and help organisations leverage synergies across business and geographies.

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