Managing people effectively is key in withstanding future crises, said the Association for Financial Professionals (AFP) recently when releasing results of its 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, AFP pointed out.
- 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 organisations will need to enhance going forward.
- 47% of respondents agree that those managing risks at their organisations 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.
- 47% of respondents report cybersecurity risks such as ransomware and phishing 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 organisation annual revenue or ownership.
- 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 organisations in mitigating future risks. This finding reflects the challenges that organisations faced managing liquidity and cash flow during the coronavirus pandemic.
- 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 behaviours (49%) and business operations interruptions (39%), followed by macroeconomic risks (36%) and financial risks (30%).
- 56% of respondents report that their organisations’ exposure to uncertainty in earnings is greater today than it was three years ago, suggesting that organisations are currently less able to anticipate risks that might arise and impact revenue.
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 organisations 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,” Kaitz noted.