AI skilling, mishandling of IP and extreme weather events among major risks set to reshape employee landscape in South Africa

According to a new report from Mercer Marsh Benefits, a global employee health, benefits and people risk advisor and part of Marsh McLennan (NYSE: MMC), organizations in South Africa face a range of employee-related risks – which could, if left unaddressed, have a dramatic impact on their future success.

Mercer Marsh Benefits’ global report, People Risk 2024, draws on the views of 4,575 human resources (HR) and risk professionals – including more than 100 participants from South Africa – and ranks risks by likelihood and severity across five key pillars: technological change and disruption, talent leadership and workforce practices; health, well-being and safety; governance, compliance and financial; and environment, sustainability and protection.

According to the research, just 29% of respondents in South Africa have effective employee upskilling on the appropriate uses of AI and automation in place; 43% have this in place but it needs improving; and 21% plan to implement this in the next 1–2 years. To address AI people issues, Mercer Marsh Benefits recommends businesses collaborate with leaders across their organization to understand the advantages and risks of AI, evaluate uninsured scenarios, encourage safe adoption, and build a digital-first people strategy.

Marsh McLennan’s Africa and South African Chief Executive Officer, Spiros Fatouros, said: “People are an organization’s most important asset, but they can also expose businesses to risk without the right culture, policies, and training. Failure to ensure people are properly supported and trained opens businesses up to severe risks, which can have wide ranging consequences. The good news is that by focusing on people in the context of each of the risk categories, organizations can have a measurable impact on mitigating and reducing risk.”

Respondents from South Africa broadly appear to exhibit a higher level of concern regarding people risks than their global counterparts and view HR and risk functions within their organization as important to both mitigating and addressing risk.

Among the key findings, 25% of respondents view technological change and disruption risks as the biggest threat to their organization in the short term (1–2 years). More than one and three (35%) of respondents are concerned about failure to comply with AI-related regulations resulting in legal and financial risks to the organization. A further 46% are concerned about employees’ inability to access needed healthcare due to possible damage to community infrastructure following natural disasters and extreme weather.

Mercer Marsh Benefits’ African Regional Offices Leader, Travis Briscoe, added: “South African businesses have seen firsthand the impact that climate related risks can have to their operations, but this also extends to their people. Through greater collaboration and careful risk planning businesses can start to narrow the risk protection gap and work together to build a risk management culture.”