Gartner Research

Executive Pulse: A Host of New Employee and Social Risks Emerge

Published: 25 June 2020

ID: G00731529

Analyst(s): Corporate Strategy Research Team

Summary

Here’s a roll-up of pandemic-related executive sentiment and insights from thousands of functional leaders across the C-suite.

Fast word on tactics and concerns from thousands participating in our conference calls andpolls.

>> More detailed role-specific reports may be available on the website, depending on your subscription.

Six-in-ten of the top looming threats to the enterprise are now directly linked to COVID-19. When choosing their five most-pressing emerging risks, over one hundred assurance executives cited:

  • A second wave of infections (74%).

  • The challenge of returning to a traditional work environment due to new workplace requirements (58%).

  • The impact of strategic corrections resulting from the pandemic (40%).

Figure 1: Top 10 Emerging Risks in Q2 2020

Political risks including the U.S. presidential elections (39%) and U.S.-China trade talks (33%) remain high on the risk agenda from before the pandemic began.

Yet assurance leaders tell us the highest velocity risks — those that would hit fast should they occur — are related to social change or the workforce. In addition to COVID-19, the recent surge in global anti-racism movements is a significant new factor.

Figure 2: Emerging Risks by Velocity

Risk managers are using a broad range of tactics to manage the threat posed by a return to the workplace, which is both a top overall emerging risk and a high-velocity risk. These include establishing strict control measures and governance structures to respond to a new outbreak, alongside traditional risk management methods, including:

  • Formally assigning an owner for the response plan (38%).

  • Setting up a monitoring system to track changes to the level of risk (38%).

  • Raising the risk with their Executive Risk Committee (29%) and the board (27%).

  • Setting up thresholds to trigger a response, with options including a re-exit (17%).

Figure 3: Actions Taken in Response to the Risk of New Working Conditions

Though not exclusively pegged to the racial justice movement, assurance leaders have identified two categories that are coming toward them at great speed, “corporate social negligence” and “profound social instability”.

In a separate survey, 86% of executives say their company’s response to racial injustice has been sincere, while...

  • Just over one half (56%) say they are “very satisfied” by the response.

  • Fifty-five percent think their organization could do more to promote diversity, inclusion and equality.

  • The same proportion (55%) say their organization is taking action or planning to take action in direct response to the protests against racial injustice.

Figure 4: Executive Sentiment on Company Response to Racial Injustice

HR and Communications leaders say they are using a range of tactics to respond to employee and public pressure to boost diversity, equity and inclusion (DEI). Among these are:

  • Unifying messaging to both employees and the public, often using the CEO and admitting failure to deliver on stated DEI goals.

  • Collaborating with employee resource groups (ERGs)to create safe spaces for employees to talk and listen to perspectives on race and ethnicity in the workplace.

  • Promoting diverse perspectives through social media.

  • Involving a diverse set of employees in decisions about the company’s response.

  • Educating leaders on racial issues and ways to engage.

  • Partnering with leaders outside the organization to speak with a unified voice.

DEI leaders sense an opportunity to convert these initial public gestures and leader sentiment into long-term actions. But they also express concerns about the impact of COVID-19 on their ability to deliver real change. They report that...

  • Minority groups are facing additional challenges from the disproportionate health and economic impacts.

  • Widespread hiring freezes will make it more difficult to recruit diverse candidates in the short run.

Compiled by Steve Shapiro

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