According to a new report from Marsh, a leading insurance broker and risk advisor and a business of Marsh McLennan, organisations in the Kingdom of Saudi Arabia face a range of employee-related risks – from technology disruption to workforce practices, governance and sustainability – which could, if left unaddressed, have a dramatic impact on their future success.
The global report, People Risk 2024, draws on the views of 4,575 human resources (HR) and risk professionals – including more than 100 participants from the Kingdom – and ranks risks by likelihood and severity across five key pillars: technological change and disruption, talent leadership and workforce practices; health, wellbeing and safety; governance, compliance and financial; environment, sustainability and protection.
According to the research, the mismanagement of AI ranked as the key concern among KSA respondents with 39% worried about employees’ over-reliance and complete trust in AI-generated content without proper verification, along with a concern about the erosion of human interaction and personalisation in customer service and employee interactions (35%).
Respondents from Saudi Arabia broadly appear to exhibit a higher level of concern regarding people risks than their global counterparts and view the HR and risk functions within their organisation as important in tackling the risks. Risks that ranked higher in terms of severity and likelihood to happen included natural disasters and extreme weather, inadequate personal catastrophe cover and suboptimal HR technology. Weak employee benefits administration, poor management of benefit exposure and disparities in executive/workers rewards were also ranked among major risks.
Bassam Al Bader, CEO of Marsh McLennan, Saudi Arabia, said: “Organisations in the Kingdom of Saudi Arabia recognise they have a role to play in the comprehensive strategic framework to reduce the Kingdom’s dependence on oil, diversify its economy and develop a wider range of services for the community. However, achieving these ambitious targets requires companies to develop new approaches to managing the people-related risks within their operations. The People Risk 2024 report demonstrates that employees are willing to deploy innovative technology and implement new approaches in support of the remarkable changes taking place in the Kingdom. However, it also suggests there is a clear need for greater support within organisations to enable them to do that effectively.”
Mahmoud Ghazi, Chief Executive Officer, Mercer Middle East, added: “The report findings demonstrates that Saudi organisations are performing well compared to their global peers in some areas. We can see that 75% of respondents in the Kingdom assert that their HR function effectively manages risk associated with workforce issues, and 99% say that HR and Risk functions in their organisations are collaborating to mitigate people risks. This demonstrates the significant progress that has been made in recent years.”
To address AI people issues, Marsh recommends that organisations should collaborate with leaders across their organisation to understand the advantages and risks of AI, evaluate uninsured scenarios, encourage safe adoption and build a digital-first people strategy.