Prioritising personnel risk management

Personnel risks rank as a top priority in many companies. Well-being and safety are inevitably linked to company performance, culture, and development. Personnel risks are numerous, multi-faceted and changing with the world around us.

Accidents or health risks relating to individuals may occur during work or free time. As a result, the person’s ability to work may decrease leading to permanent or temporary loss of work ability.

These risks can be managed through hazard identification as part of a risk assessment, eliminating risks or minimising the probability and/or consequences of risks. Numerous methods have been developed for identifying and managing accident risks, which examine the specific task and work environment. Correspondingly, risks relating to work ability and well-being can be identified and managed systematically.

Some learnings from the recent pandemic include understanding that external factors can disable an entire team from completing their responsibilities. From a business continuity perspective, key personnel risks need to be managed carefully to prevent business interruption. In addition, many companies in the Nordics may find it difficult to find skilled personnel. As the workforce is aging and experts retire, recruiting capable persons to take care of critical tasks is a common challenge.

At If Insurance, we offer a variety of personal insurances and support our customers through different life stages.

The purpose of our personal insurance products is to provide more security to individuals, families, and businesses.

Let’s take a look at how various personnel risks manifest to the employer.

Understanding occupational diseases

Occupational diseases are often a complex challenge, as the consequences of risks can materialise immediately or over time, and the risk may realise differently between individuals. The diseases can also start with mild symptoms and increase in severity if the exposure continues. From the employer’s point of view, personnel risks are therefore multidimensional, both in terms of hazards, consequences, and responsibilities.

Mapping personnel risks

In addition to the health and safety risks to individual employees, there are personnel risks that can influence the employing company. These risks include a wide range of factors, such as labour shortages, lack of skilled personnel, key personnel leaving or long sick leaves.

The European Commission’s Employment and Social Developments in Europe (ESDE) report from 2023 concludes that labour shortages across various sectors, occupations, and skill levels are expected to increase even further in the coming years. Two main drivers arise from the creation of new jobs and the need for replacing workers who are retiring in the near future.

According to the ESDE report, labour shortages will especially affect sectors such as construction, healthcare, STEM (science, technology, engineering, and mathematics) and ICT (information and communications technology). The lack of skilled personnel in these sectors is expected to increase with the decline in the working age population from 265 million in 2022 to 258 million by 2030.

man with helmet.

Do you know the key person risks?

Have you mapped the key persons in your company? What happens if they leave the company or will be on sick leave for a longer while?

Because of the difficult replaceability of key personnel, the company should, in addition to good management of well-being at work, minimise the risks associated with key personnel by transferring their knowledge to others and ensuring that the undocumented, tacit knowledge and working practices they possess are transferable to others. In this way, the company is less vulnerable when business continuity does not depend solely on one key person. Good risk management prepares the company, not only for sick leave, but also for when key personnel retire.

In addition, the workload of key personnel is often heavy and the role stressful, increasing the risk of fatigue and mental health issues, so sharing information with others will also help to reduce the burden. For example, a person close to retirement age may have accumulated a huge amount of knowledge and have valuable contacts in their networks that may not be documented at all. Systematic efforts should be made to transfer this knowledge to younger employees to minimise any negative impact on the company’s business after a key person has left.

When there is a lack of skilled personnel, the risk of recruitment errors arises, as sometimes candidates may not in actuality have the necessary skills to succeed in the specific position. This is a risk both for business operations and the individual.

Employee benefits can be a valuable tool in keeping existing employees and attracting new talent.

Healthy employees drive success

Managers play a critical role in recognising an employee’s ability to work and any issues in their workload. Managers should also implement processes that support mental health as part of their everyday management. Therefore, manager training should comprehensively cover topics related to promoting mental health and supporting mental work ability. Making this training mandatory for managers ensures its integration into their management responsibilities. Supporting open dialogue with employees will make it easier to identify the early signs of any personnel-related risks, such as those relating to health and well-being or near misses of an accident.

Successful management of personnel risks demands that company management and leaders are focused on the well-being and health of their employees. Early identification of risks relating to personnel can help improve productivity and overall well-being in the company, and even prevent accidents. It will also support business continuity.

Ongoing monitoring and regular updates to human resources processes and company safety guidelines will also help to give management the tools they need to maintain a healthy workplace for their employees. With the right processes in place, managers can intervene and support their team members early, assist them in securing treatment and help them recover so that they can return to work.

Among all personnel groups, changes in an employee’s personal life often carry over into the workplace. Therefore, it is important to be aware of signals that may indicate an increased risk. Employee well-being is the cornerstone of success, involving everyone from the factory floor to the top management. 

Supporting our clients

In the Nordics, If Insurance offers various personal insurance (PI) products. These insurances provide increased financial security even when an individual has lost the ability to work. These policies can cover, for example, the medical costs of illness or accidents.

At If Insurance, we provide clients with supporting materials in the Risk Management Library, including the Daily wellbeing and better ergonomics training course.

Written by

Salla Lind-Kohvakka, Nordic Digital Risk Manager