By Max Mihelich
Organizations need to recognize the advantages and disadvantages of behavioral risk of all employees. Doing so allows an organization to manage risk in a constructive way, according to a study published by SHL, an Atlanta-based talent management company.
A global report on risk management claims an average of 1 in 8 workers pose a “high risk” for their organization. The report by SHL, an Atlanta-based talent management company, identifies the “riskiest roles and sectors worldwide.”
SHL’s study which was released Jan. 8 focuses on behavioral risk throughout all employment levels across 15 different industries.
Behavioral risk was measured by assessing a company’s “appetite for risk” and its “resilience to risk.” Appetite for risk includes qualities like taking initiative, having confidence to make hard decisions and having perseverance to achieve a goal. Resilience to risk includes decision quality, communication quality and following through on decisions, among others, according to an SHL written statement.
“Considering recent events in the financial and media sectors, we are constantly seeing evidence that what people do or fail to do drives organizational risk, which can impact share prices, break laws and catalyze industry reform,” said Eugene Burke, chief science and analytics officer at SHL, in a news release.
Since behavioral risk cannot be fully eliminated from the workplace, SHL’s findings show organizations should be aware of its potential advantages and disadvantages. Recognizing these factors can allow a company to manage risk in a constructive way, the report notes.
The study claims 1 in 8 managers and professionals globally represent a high risk to their companies. The risk such workers create comes from lower-quality decision-making and poorer communication, the report says.
Moving up the corporate ladder shows a decrease in risk level: 1 in 15 executives pose a high risk for their companies. Conversely, 1 in 7 lower-level employees, such as team leaders and individual contributors, provide the highest potential for risky behavior. Finally, 1 in 8 frontline staff represent a high risk to their companies because of counterproductive behaviors, such as lower compliance and attention to detail, less of a commitment to a company and reluctance to working with a team. These counterproductive behaviors can lead to more errors in the workplace or damage a brand’s name through poor customer service, SHL says.
The study also shows that senior management employees can occasionally pose the greatest risk to companies of all employment levels if they lack adequate decision-making and communication skills.
“By ignoring whistle-blowers or not taking into account viewpoints from across the business, leaders can be missing vital clues to manage risk, which can have devastating consequences as we’ve seen from recent news developments,” Burke says.
SHL recommends businesses commit to enforcing ethical standards and developing effective channels for employees to comfortably communicate ethical infractions to their superiors as ways to reduce the level of behavioral risk.
Telecommunications and consumer goods are the sectors with the most amount of risk, while retail and the public sector carry the least amount of risk, according to the study. Business services and banking are in the middle of the behavioral risk spectrum.