We live in a world of a high degree of unpredictability and absolute chaos. A moment we were leading a healthy, happy life, and months later, we are living under constant fear of contacting the COVID-19 pandemic. Most of the paranoia births because as human beings, we have an inherent need to have everything under our control. From health to wealth, career to retirement, to even planning for our next breakfast or binge-watching content, we have the desire to know what comes next and prepare ourselves in advance for it.
And it is not surprising that this behavior often reflects in our business life, where we constantly keep analyzing possible shortcomings and try to diminish them. This is why risk management is becoming an indispensable part of every business nowadays. Having a well-planned risk management strategy decides if the organization can steer through difficult times without compromising its people nor hampering its profit curve.
As highlighted earlier, Coronavirus caused COVID-19 has thrown our well-planned lives into a spiral. The increasing daily news on salary cuts, unemployment, industry shutdowns is neither helping. Besides, due to massive numbers of positive cases, with nation-wide lockdowns, the industries and businesses across all sectors have taken a hit. As per the United Nations, in 2020 alone, the Global unemployment rate is projected to increase by around 2.5 million, and almost half a billion people are working fewer paid hours than they would like or lack adequate access to paid work.
While it is challenging to forecast every downturn, stock market crash, catastrophe, or data breach or loss of revenue that might befall, by detecting hypothetical scenarios of the unknown, it’s possible to identify many risks long before they can cause a problem. Hence, having well-trained risk managers in business teams pays off well in the long run. Apart from that, business schools can take the initiative of adding risk management into their curriculum too. Though students can have the freedom to specialize in any industry or field of choice but risk management must continue to be an essential element across industries.
As we transition to the new normal, it is must that the future workforce is trained to predict the next events via an exhaustive analysis of the business environment. They should possess the ability to make fundamental changes in the business to adapt to the evolving environment needs and develop a people-first approach. And they need to create such an organizational culture that recovery from any sort of global or domestic crisis is possible.
As we emerge into the new normal, our future workforce should be trained to predict the future by doing a thorough analysis of the business environment, make radical changes in the business to adapt to the evolving environment needs, and develop a people-first approach. Students can enhance their skills in matters of corporate governance and formulate effective business continuity plans. Future Risk managers should create a new work environment for all businesses to recover from the domestic as well as global crisis such as these. Besides, working out of financial slumps during the crisis, these leaders should keep in mind about the wellbeing and future of their employees and other stakeholders, for smooth operations.
To achieve this kind of adeptness, nurturing of the future leaders needs to start at an early stage. Graduates expert in theoretical knowledge about risk management can figure out the risks that are not visible to the business fraternity. Then they can categorize threats depending on the urgency to forestall them.
Since one of the significant responsibilities of a risk manager is to provide the right guidance. They need to act as advisors to the c-suite level and provide them with adequate insights, make them aware of market trends and support to manage a crisis. Another crucial element of risk management is to minimize business liability on financials, assets, and expenses that the organization may or may not have to incur during the crisis. Further to this, risk managers formulate policies that can shape the future path of the organization by mitigating unseen risks. So, to conclude, risk management can help businesses steer through sudden emergency times seamlessly amid limited resources in a crisis like the COVID-19.