New Delhi: In many business organisations, human capital accounts for a large share of operating costs and is a major indicator of business performance. The risks and uncertainties arising from human capital management and workforce issues are not managed as rigorously as financial, supply chain, IT and other risks. Willis Towers Watson in collaboration with the Confederation of Indian Industry (CII) – Suresh Neotia Centre of Excellence for Leadership (SNCEL) has gathered the views of nearly 100 chief executive officers (CEOs), chief HR officers (CHROs), chief financial officers (CFOs), chief risk officers (CFOs) and other senior executives in India spanning a diverse set of industries on human capital risk management.
This study provides insight perspectives on the relevance and implications of human capital risks in India, prioritises risks by their impact on business performance and prevalence, and highlights the current state of risk management practices.
The study found the following key points:
- 62% of respondents view human capital risk as an urgent or very important board-level concern for their organisations.
- Majority of the respondents are very concerned about retention of critical talent and leadership bench-strength.
- Roughly 41% of respondents believe their organisation manages human capital risk effectively, with multinational corporations reporting considerably greater success than domestic companies.
- Only 35% of respondents report that their organisation has a formally defined risk mitigation or control strategy in place.
- A scarcity of HR specialists and insufficient dialogue between the HR and risk management functions are major obstacles to establishing a successful human capital risk mitigation plan.