HR built the policies, now it needs to own the risk.

The traditional functions of HR are now central to enterprise risk management.

The Marsh People Risk 2026 report, which canvassed over 4,500 HR and Risk professionals across 26 markets, paints a stark picture for leaders struggling to embed risk into strategic decision-making.

The report found that just 14% of HR and Risk leaders believe their organization is “risk mature” – defined as anticipating, managing, and planning for risk – amid numerous overlapping factors shaping the world.

“At the center of this shifting landscape are people risks: the workforce-related factors that can amplify or mitigate enterprise risk,” the report stated.

“They shape productivity and performance today, while also acting as early warning signals for broader operational, financial and reputational threats down the line.”

Here are four key takeaways and actions for HR leaders from the report.

Leadership development is a risk control, not a training exercise

Marsh’s report found that traditional leadership structures are no longer aligned with the modern reality of enterprise. “Stability, clear hierarchies, and predictable work” can no longer succeed in a world dominated by “uncertainty, speed, and complexity.”

The danger for organizations is clear: inadequate leadership skills often act as a multiplier that creates and worsens risk downstream in the organization. More so than any other factor, according to Marsh.

“Poor decision-making, weak communication, and a lack of trust” can quickly cascade into labor shortages, unsafe working conditions, deteriorating mental health, and flawed financial decisions.

For HR leaders, stopping this at the source goes beyond learning exercises. While leadership skill development remains crucial – particularly concerning human-centric capabilities such as accountability and communication – HR leaders need to reframe leadership investment in the language the C-suite understands: risk mitigation with measurable downstream impact.

Get a seat at the AI table before roles and training are decided

People leaders have been told they need to get a seat at the top table on AI for nearly three years or miss out on input on organizational decision-making.

40% of HR and Risk leaders surveyed by Marsh said that investment in AI without necessary training and upskilling for employees was the highest concern, above any other AI-related risk.

But adding AI and then upskilling for it on top of poorly constructed roles will only exacerbate both workflow bottlenecks and associated risks.

This is where HR leaders need to be leading from the front in the redesign of work – determining what AI augments, automates, or eliminates.

Setting this agenda from the outset, instead of allowing other business leaders to do so, means HR is embedded into the foundations of the future of work, rather than developing learning and upskilling agendas based on plans built by other areas of the organization.

Put financial and mental wellbeing on the enterprise risk radar

Among the top risks identified in the report are employee financial insecurity and mental health deterioration, at numbers four and nine of the top ten respectively.

Marsh’s report noted that employee financial instability is no longer just a personal problem; it’s a substantial organizational risk that has a direct impact on productivity, retention and employee behaviors.

Meanwhile, 61% of Risk and HR professionals said their organizations do not provide highly effective, employer-sponsored mental health care – a significant risk. Despite this, 41% of respondents rated their organization’s risk maturity as “advanced/transformative” for supervisor training on mental health and psychosocial risks.

HR leaders need to be the driving force in ensuring organizations view and respond to mental and financial wellbeing as an enterprise risk, instead of allowing wellbeing to be siloed within benefits budgeting.

Drive structural collaboration between HR and Risk

One of the key takeaways from Marsh’s report is that organizations with strong HR and Risk collaboration are significantly more effective at mitigation than those with weak collaboration.

These companies are 39 percentage points more effective on succession planning, 34 points on health plan cost strategy, and 33 points on reskilling and upskilling programs for future roles.

The report stated that as organizations plan for both “emerging and ongoing geopolitical risks,” close and proactive collaboration between HR and Risk professionals is “critical to both safeguarding employees and ensuring coordinated, effective responses in an increasingly volatile environment.”

Rather than waiting, HR leaders must take the initiative and push joint governance structures and shared risk metrics with Risk counterparts.