How To Manage Risk Under the New Normal In 2022

There is no doubt that 2020-21 changed the way every business operates. Local businesses sustained significant economic impact from COVID-19. More than eight months after the U.S. started experiencing widespread closures, one in five small businesses have now closed, nineteen percent temporarily, and ten percent permanently.

Many companies have adjusted to the new way of doing things, but with change comes unknown risks.

The United States economy, which was previously solid and predictable, is no longer so. Growth without losing profitability is difficult. The ongoing change affects specific risk profiles irreversibly. Distribution demands have become genuinely multichannel, and customers expect items tailored specifically to them.

Meanwhile, technology has advanced at a breakneck pace, and a new player environment threatens to disrupt consumer service.

Here Are Some of the Top Risk Issues Facing Local Businesses

• The great resignation
• Remote workers
• Cyber risk
• Lingering pandemic-related concerns
• Supply chain management

The Great Resignation

According to Goldman Sachs, over five million workers have left the workforce since 2020. With employers desiring employees to return to the office, it is estimated even more may leave the workforce.

Employees’ desire for flexibility because of working from home during the pandemic created new opportunities. While many reports show that employees want to work from home, other reports suggest that working in the office is not so bad when the benefits are considered.

Risk Management Strategy: Invite industry leaders to give advice. Organizing motivational events can help your employees rediscover their passion for achievement. Emphasize the Importance of employee mental and physical health.

Encourage a work-life balance by accommodating employees’ family emergencies and respecting their time outside of work hours. Encourage education by providing tuition reimbursement to your employees.

Remote Workers

Seventy-seven percent of remote workers claim that working from home increases their productivity. It is fair to say that remote work is here to stay but will be modified as time goes by.

Most businesses are asking employees to return to work at least a few days per week. While companies cannot totally remove safety dangers in an office setting, they can implement effective risk management procedures to make office workplaces as safe as possible.

Risk Management Strategy: There are many actions employers should consider when managing a remote work program. These can include: 

• Maintaining the correct workers’ compensation plan. Emphasize communication.
• Have the right communication tools.
• Require weekly in-office meetings.
• Develop objective performance tools based on outcomes.
• Consider a hybrid remote work approach that allows for remote work but is regular in office work. 

Cyber Risk

The drive to “become virtual” in all parts of operations may have unintentionally produced security flaws, especially on the human perimeter. Cybersecurity has long been a primary concern, and it remains so as cybercriminals and others develop new attack techniques.

Risk Management Strategy: Make sure you have your agent review your cyber risks and recommend insurance and risk reduction strategies that match your exposure. 

• Keep devices patched and up to date.
• Accommodate the increase of remote VPN workers.
• Provide employee training.
• Require passwords to be updated regularly and use PW managers.
• Use cloud software for file management.
• Use only secure Wi-Fi.
• Have good backup systems

Lingering Pandemic-Related Concerns

New coronavirus variants, as well as the inability to vaccinate enough individuals in some regions, have slowed recovery efforts and dampened economic development expectations.

There continue to be concerns about government regulations having a substantial impact on corporate performance and pandemic-induced market conditions continuing to influence consumer behavior and demand for products and services.

Risk Management Strategy: Encourage all employees to maintain a healthy lifestyle. Is your organization prepared to deal with long-term disruptions in the case of another pandemic? We recommend developing a long-term plan that would include all stakeholder’s involvement. 

Supply Chain Management

It has been challenging to quickly adjust to supply chain disruptions. Supply chain interruptions are viewed as a moderate or severe risk by seventy-five percent of business owners. In fact, supply chain disruptions are ranked above all other dangers, including talent shortages and the comeback from Covid-19.

Risk Management Strategy: Supply chain cloud solutions can be extremely useful for inventory efficiency, especially as businesses grow and collaborate with various partners. 

Companies can better estimate stock, allocate inventory to certain demographics, and match supply proactively through dynamic order planning with greater insights. Insurance should also be part of your risk mitigation strategy. There are many effective insurance solutions to supply chain disruption. 

In Conclusion

Companies must accept that pandemics such as COVID-19 or other economic situations will occur in the foreseeable future. Businesses must learn to operate in this “New Normal” accordingly.

Your business should adopt measures and systems that monitor and manage developing risks as part of everyday company operations. If necessary, invest in risk practices that will evolve with your needs. You'll put your company in a better position to deal with the unexpected, not just in this crisis but in the future as well.

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Leap | Carpenter | Kemps Insurance Agency Can Help 

Leap l Carpenter l Kemps Insurance agents and consultants have helped many businesses establish, plan, and implement successful risk management and insurance strategies. Contact us today for more information on the advantages of risk management consulting services or to schedule a consultation with a professional expert.