Based on a sample size of more than 1.3 million people across 200 countries and territories from executives to frontline staff, SHL's research finds that on average 1 in 8 people globally pose a high level of behavioral risk to their organization.
"Considering recent events in the financial and media sectors, we are constantly seeing evidence that what people do or fail to do drives organizational risk which can impact share prices, break laws and catalyze industry reform," said
SHL's research revealed that 1 in 8 managers and professionals globally are a high risk to their companies. These people are most likely to create risk through lower quality decision-making and poorer communication. Interestingly behavioral risk decreases as seniority increases with only 1 in 15 executives posing a high risk. Further down the organization, team leaders and individual contributors are the riskiest employees pose more than double the risk of executives (1 in 7).
"What we're seeing is an execution gap at the middle-manager level. They have a critical role to play as they are the interface between strategy and operational execution. On the one hand they have to manage compliance and commitment from frontline staff. On the other, they need to communicate decisions from leaders in a relevant way so the frontline workforce feels motivated and empowered," said Burke. "Organizations must ask themselves whether they have the right talent in place at the middle management level to manage risk appropriately and deliver the board's vision to the frontline."
SHL's research also revealed that 1 in 8 frontline staff pose a high risk to their organization by demonstrating counterproductive behaviors in the workplace: lower compliance and attention to detail, (which could translate in to increased error rates and accidents), and lower commitment and teamwork (which could impact customer service as well as incurring higher costs associated with absenteeism and performance management).
While the global average rate for behavioral risk on the production line is similar to managers and professionals (12.5% and 12.2% respectively) the rankings by sector show marked differences. Several sectors buck the trend having a greater risk at the top of their organizations including oil and gas and travel and leisure.
"There have been significant cases in recent years where frontline staff have been criticized for company crises or accidents," said Burke. "Yet SHL's risk research finds that in certain sectors it is actually senior management who lack crucial decision making and communication skills and create risk for their organizations. By ignoring whistle-blowers or not taking into account viewpoints from across the business, leaders can be missing vital clues to manage risk which can have devastating consequences as we've seen from recent news developments."
"There are two factors which senior managers could incorporate into their approach to reduce significant behavioral risks – firstly a commitment to appropriately enforcing ethical standards and second an effective channel by which employees feel comfortable communicating infractions," said