Five ways in which coronavirus has impacted risk management

June 4, 2020

The impact of the current coronavirus pandemic has already been huge. It has changed the entire world around us, for individuals, governments and businesses alike, and its impact will no doubt be felt for many years to come.

Even as countries around the world begin to tentatively emerge from lockdown, the effect on the wider economy is yet to be ascertained. We are collectively and individually facing economic hardship, with governments having to help businesses come through this crisis but also find the money to provide that help.

This means that the risk landscape has changed enormously. Even putting aside the considerable effect of the general operational disruption facing businesses, there are many unprecedented challenges that they are facing in terms of risk management strategy and how they make best use of their risk management software.

Here are five of the biggest ways that coronavirus has changed the global risk management landscape.

Employee management

How an organisation manages its workforce is essential even during more normal times. A motivated and engaged workforce is seen by most as a key element of successful business and that has only become truer during the pandemic.

Organisations have had to change much of how they approach workforce management. With most of the workforce now working from home, the management of employees has switched to digital models, and senior teams have had to provide different tools and technologies that can help facilitate remote working. If employers get this wrong, then the risk of reduced employee retention will be a factor when things return to normal. This risk can be considered as one of major operational risks an organisation can face during crisis times.

There is also the financial factor. Many employers have had to furlough their workforce. While governments are contributing to this, they will not do so indefinitely and there is huge financial risk for organisations to be mindful of. Employees that have been subject to worktime reduction might face serious financial problems that would lead them to consider their commitment regarding their organisation.

Leadership and communication

The way that senior personnel communicate with their remote teams has also changed. There is no real reason why leaders can’t lead well using digital tools, but for many organisations it is still fairly alien to do so.

Employees want to feel valued and well-remunerated in their work, but also increasingly want to work for a company that does business in the right way and feel like they have a say in the direction of that company.

Building this kind of culture is possible remotely and some companies are even based entirely on remote working models. But any failure to provide a well-defined path forward out of the pandemic could have repercussions for the organisation in question, as and when employees feel the market is more stable in terms of searching for new employment.

Greater threat from cyber-criminals

Cybercrime should be on the radar of any organisation, irrespective of the coronavirus. There are many threats facing businesses, but the volume and breadth of cyber-attack has certainly increased during the pandemic due the lack of preventive action plans.

For any organisation that is serious about risk management, cybersecurity should be included as part of that organisation’s enterprise risk management software. But the added threat of many employees working from home, without the full protection of the corporate systems and perhaps sharing devices with other members of the family, has meant more risk than usual.

With increases in spam, phishing and ransomware attacks during coronavirus, it is clear that cybersecurity risk has become significantly higher.

Logistics and operations

Supply chains across the world have been disrupted or even completely dismantled. This has meant factories have closed, demand is not being met and there is an attendant impact on sales from this.

The has meant risk management professionals have had to broaden their risk scope somewhat, evaluating the business continuity of different suppliers, changing suppliers and logistics providers and even sourcing goods from local providers.

All this carries risk, risk that almost certainly would not have been addressed in risk management strategies or risk management software before the pandemic took hold.

Post-pandemic planning and risk mitigation

Just as new measures were put into place as the world went into lockdown, so they will also be when the world comes out of lockdown. With so many people working from home – and many doing so successfully – there will be discussions about how to plan for the future.

Will businesses allow many more of their employees to work from home on a more regular basis? What might the impact of this be on performance and productivity, and will organisations still be willing to pay expensive commercial rental for buildings they find they no longer need?

A complete rethinking of the risk frameworks, digitalization and automation of risk mitigation plans should be performed in order to consider the lacks that have come to light recently.

Risk management is always a challenging and evolving environment, but these past few months has made it significantly more so. That’s why risk professionals need the right enterprise risk management software to help them through this period.

Oxial’s sGRC solution is affordable for mid-market businesses, packed with features and functionality to help identify, evaluate and mitigate risk and is a complete end-to-end digital solution.

If you need help working through the complex risk environment that has emerged during this pandemic, then please get in touch with us here.