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But where are the People? A Research study on key business risks in the ASX100

About the research Through my work at Cognology I spend most of my life thinking about talent management and employee risk. But I wanted to understand how much time other Australian CEOs and CFOs spend thinking about their key employee and people risks. So with my team of helpers here at Cognology HQ we’ve spent the past few weeks investigating how the largest companies in Australia recognise people risks. ������To do this, we compiled the most recent annual reports for each of the ASX 100 (the largest 100 companies in Australia). We were looking at the section where each of these companies declare key business and investment risks. Broadly, this section is means to describe all the critical risks that investors need to think about when choosing whether to invest money into the company or not.������We wanted to see which companies recognized people as a key business risk – and which didn’t. I suspected we’d get some variance, and that we’d find some outliers who ignored their people all together. But the truth was more astounding.

If you’ve got questions about this data, or want to learn more about how Cognology helps over 250 Australian companies manage their talent risk, please don’t hesitate to get in touch.

Kind regards,Jon WindustCEO – Cognology  

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Our research identified five major groups of people risks…

Employee injury or safety risks”A death or major injury in the workplace would be devastating for employees and families and could jeopardise the group’s reputation as a first-choice employer.” ���

- Dulux 2013 Annual Report

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”Brambles is subject to the risk of not attracting, developing and retaining high-

performing individuals. Furthermore, succession planning may not be managed effectively, so that talented individuals are

able to be developed and promoted within the Group, rather than sourced externally.

This could result in Brambles not having sufficient quality and quantity of people to meet its growth and business objectives.” ���

– Brambles 2014 Annual Report

Retention and attraction of key personnel

5

“The risk of failing to develop and implement an effective business strategy. Failure to do so may over time lead to a loss of market share, damage to our reputation and negatively impact our financial performance.” ���

– Worley Parsons 2013 Annual Report

Inability to execute strategy ���or innovate

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”There is a risk of non-compliance with, or additional

obligations relating to, legal and regulatory obligations and

expectations which may have a negative impact on Woolworths’

performance” ���

– Woolworths 2013 Annual Report

Non compliance with regulation or unethical behaviour

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“[The risk of] Industrial relations activity that impacts the Company’s ability to meet its contractual and customer expectations” ���

– Asciano 2013 Annual Report

Industrial relations risks

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Any guesses on how many companies cite people as a key business risk? ?

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JUST 50% of Australia’s largest companies DECLARE any PEOPLE RELATED RISK in the key business risks section of their latest annual report

50%50%

People risks No people risks

Source: ASX 100 annual reports (September 2014) 10

The risk of

employee injury was the most commonly cited

key people risk (with just under 30% of the ASX 100)

29% 28%

20%

14%12%

Employee injury or safety risks

Individual non-compliance with

regulation or unethical business practices

Retention and attraction of key

personnel

Inability to execute strategy or innovate

Industrial relations risks

% o

f ASX

100

dec

laring

risk

Source: ASX 100 annual reports (September 2014) 11

CAN YOU BELIEVE Just

one in five Australian companies make the

connection between talent and the share price?

29% 28%

20%

14%12%

Employee injury or safety risks

Individual non-compliance with

regulation or unethical business practices

Retention and attraction of key

personnel

Inability to execute strategy or innovate

Industrial relations risks

% o

f ASX

100

dec

laring

risk

Source: ASX 100 annual reports (September 2014) 12

Cognology is an Australian company making Talent Management software for the future of work. Over 250 businesses use Cognology to empower cutting

edge talent strategy.

We build technology to help our clients with performance, engagement, retention and learning for their entire employment lifecycle. Our research and development efforts are continually looking for ways to make it easier for our

customers to execute business strategy, develop their people and do great things together.

Learn more about Cognology at http://www.cognology.com.au/