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Beyond COVID: 5 Different Types of Business Risk You Are Overlooking

Fallout out from the COVID pandemic forced many organizations to focus on novel risks that may have been less-than-top-of-mind before 2019, including mass employee sick leave, raw materials shortages, and more. But as the world transitions into a post-COVID reality, some crucial business risks will still need attention. 

Here are five risks you may be overlooking right now.

1. Supply Chain Disruptions and Shipping Costs

While COVID was a convenient scapegoat for the supply chain issues over the last couple of years, the risk may not diminish as the last variants shrink away. The supply chain’s fragility is due to a variety of factors, such as:

  • Geo-political developments
  • Weather conditions
  • Natural disasters in different parts of the world

As a result, even if the supply chain returns to normal after COVID, it may still be too soon to rest on the laurels of a business that survived. All elements of an organization’s balance sheet that hinge on supply chain expenses are exposed. Further, any aspect of the production timeline that depends on materials thousands—or even hundreds—of miles away comes with inherent risk.

2. Rising Energy Costs

While historical charts of the energy price index look random, the overall trend is consistent: They’re going up. But even though the trend, in this case, isn’t your friend, you can prepare now to mitigate this risk. By 2035, the overall energy price index is projected to rise about 14.5%. You can take steps now to factor this into your risk management strategy so you’re not jostled by the energy ups and downs in the coming years.

3. Evolving Workforce

Meeting the needs of talented employees is always a priority, and accommodating the desires of an evolving workforce should be a core element of your risk mitigation strategy. Employees may want to work from home, some or all of the time, and meeting that need can involve:

  • Increased investment in technology that enables a safe work from home environment
  • Training for remote workers apart from, or in conjunction with, traditional in-house education
  • Incorporating flexibility in your overall work infrastructure so if someone suddenly wants a hybrid work arrangement, you have the agility to meet them where they are

4. Cyber Attacks

Cyber attacks inflict a $3.86 million blow, on average, for organizations that get hit. For some companies, it can be easy to ignore the threats—especially if they haven’t been impacted, yet. But due to the risk of loss, both in terms of money and reputation, it’s best to get on top of your cybersecurity now.

In addition to mitigating the risk through insurance coverage, it’s good to assess:

  • The quality of your cyber defenses. Are you using the latest technologies?
  • Whether your cybersecurity tools are current. Is there a system for consistently installing updates and patches?
  • Whether employees—both in-house and remote—understand their obligations and action items in the event of an attack

Another powerful way to stay ahead of cybercriminals is to make sure employees are well-educated regarding how to avoid attacks and boost the overall security profile of the organization. In this way, everyone is in the trenches of cyber warfare and equipped with the same weaponry.

5. Social Media Movements

Social media dominates day-to-day interactions, and this comes with some pivotal, inherent risks, especially for organizations whose company and/or principals are active on social media.

At any time, a social media-powered movement can impact your products, services, policies, and popularity. For example, hiring policies, if they aren’t in line with what’s socially acceptable, can be “put on blast” on social media, tarnishing a good, hard-earned reputation.

There also exists the danger of what some call “cancel culture.” This can affect both your organization and those involved in it—on a personal or professional level. For instance, if someone were to handle a public situation in a way that a mass of social media followers and influencers disagree with, their actions, employment history, and public decisions can all be highlighted in an attempt to get them fired or dismissed from a board of directors. The organization that refuses to comply could also fall within the crosshairs of social media devotees.

However, by taking these risks into consideration now, you can mitigate any fallout. You can also educate employees regarding how to manage social media situations that may overlap with their professional lives, putting them and your organization in a strong position to avoid issues.

By taking supply chain issues, rising energy costs, an evolving workforce, cyber attacks, and social media movements into consideration now, you can do a lot to get ahead of the risk these situations could cause.

To learn more about how enterprise risk management software can benefit your organization, chat with a Ventiv expert today.

 

 
 
 
 
 
 
 
 
 

May 4, 2022

 | Originally posted on 

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