Recession conditions fuel human capital risk in firms of all sizes

28 October 2016

    As the downturn in the oil and gas industry continues to hit the wider economy, a heavy impact looms over the assets businesses value most – their people. 

    From a corporate perspective, organisations must endeavour to maintain staff morale. Ensuring employees are supported and offered rewards/incentives that are tied to realistic performance targets reduces the risk of demotivated employees who lack commitment to excellence. Targets perceived as unobtainable may not only reduce productivity but in extreme cases, drive inappropriate behaviours.

    With this in mind, current market circumstances are ripe for a rise in incidences of fraud as a direct result of the pressures exerted on companies of all scales, similar to the situation witnessed nationwide during the financial services meltdown of 2007/8.

    The majority of fraudsters are not ‘bad people’. Many simply become trapped in a fraud triangle, with pressures at home and work conspiring against them, resulting in serious consequences and losses for them, their employers and other organisations.

    Redundancy, whether threatened or witnessed with colleagues, can result in stress and depression and exacerbate addictive tendencies. Those retaining their job often have to take on additional workload for no additional reward.

    Our Employer Solutions team together with our enterprise risk management experts ensure appropriate controls are effectively executed to enable early intervention. Data analytics in the form of continuous monitoring can automate key controls monitoring and provide fresh management insights.

    Johnston Carmichael supports employers of all sizes in the management of their vital, high value human capital. Our specialist capabilities in business risk assurance, data mining and analysis provide effective, efficient and transparent assurance that puts management back in control. Company values have a significant part to play in that respect, focussed on culture, ethics, and its approach to health and safety.

    Effective management means speaking to people about those and other issues in real time – being proactive, avoiding the staged, mechanistic feeling of many company processes will give an organisation a far greater chance of eliminating or at least significantly mitigating risk.