One of many lessons that companies have learned throughout the coronavirus pandemic is the importance of the health and well-being of their people. With remote work, fatigue, mental anguish and uncertainty of the future, organizations had little to no experience managing people during this challenging time.
Now, as organizations around the world emerge from the crisis caused by the coronavirus pandemic, managing people effectively is key in withstanding future crises, according to the 2021 AFP Risk Survey, supported by Marsh McLennan.
In a poll of 272 treasury practitioners, the survey found that 84% of respondents believe managing people effectively during a crisis will assist them in coping better during the next crisis. Focusing on keeping employees engaged, adapting to alternative work environments, allowing flexibility and assisting staff in dealing with their mental health are some of the areas that organizations will need to enhance going forward. In addition, 47% of respondents agree that those managing risks at their organizations in the past year have grown into a more strategic role, and practitioners note that the contribution of treasury managing macroeconomic risk, technology risk, and liquidity and financial risk has increased significantly in importance.
Survey results also revealed that nearly half of respondents (47%) report cybersecurity risks (ransomware, phishing, etc.) are currently the most challenging risks to manage. The views regarding cybersecurity risks have evolved over the past decade: in 2010, only 12% of respondents noted that cybersecurity risks were challenging to manage, while in 2021, nearly half report this category of risk is difficult to keep in check. Results show that cybersecurity risks are the most difficult to manage across the board, regardless of organization annual revenue or ownership.
“The crisis surrounding the pandemic further highlights the need for companies to focus on the health and well-being of their employees,” said Jim Kaitz, president and CEO of AFP. “It is more important than ever that organizations support the emotional well-being of their staff and equip them with the tools, technology and training to help them be more proactive, collaborate effectively and stay engaged.”
Other notable highlights of the 2021 AFP Risk Survey include:
- Nearly 80% of respondents reported that treasury teams are going to have to focus on managing cash flow, working capital and liquidity so they can assist their organizations in mitigating future risks. This finding reflects the challenges that organizations faced managing liquidity and cash flow during the coronavirus pandemic.
- Survey results indicate that the risks noted as having the greatest impact on earnings in the next three years are strategic risks such as industry disruptions, evolving customer demand and purchasing behaviors (49%) and business operations interruptions (39%), followed by macroeconomic risks (36%) and financial risks (30%).
- Fifty-six percent of respondents report that their organizations’ exposure to uncertainty in earnings is greater today than it was three years ago, suggesting that organizations are currently less able to anticipate risks that might arise and impact revenue.
“The acceleration of trends such as the rapid shift to digitize processes and business models and changes in the way we work are creating new risk dynamics. As a result, organizations are increasingly exposed to cyber-threats like ransomware attacks,” said Leslie Chacko, Managing Director, Marsh McLennan. “While cyber risk can never be eliminated, financial professionals are well placed to identify, quantify and help manage it for their organizations.”
Download the full AFP 2021 Survey results here. Want to learn more? Register for the AFP webinar, “Shifting Priorities: Highlights from the 2021 AFP Risk Survey,” taking place October 21 from 2 – 3 p.m. ET.