Sergio Castillo – 2025 Annual Conference Student Scholar Reflection

While cyberattacks, natural disasters, and public health crises dominate traditional risk profiles, a more pressing, foundational threat often goes overlooked. Human Capital Management (HCM). As organizations grapple with talent shortages, digital disruption, and shifting employee expectations, workforce risks should no longer be viewed as a subset of HR. Rather, HCM should be positioned as one of the most critical problems facing organizations, and public entities as they try to create innovative solutions and strategies to manage related people issues such as work injuries, aging workforce, and absenteeism.

On a deeper scale, these issues extend far beyond Human Resources and apply to all enterprises as it should be treated as a direct intersection between risk and people. Boards and stakeholders are increasingly demanding greater visibility into how companies manage workforce-related risks. Therefore, poor talent management can easily become a source of organizational vulnerability and should be seen as a foundational problem for public risk management entities as they constantly need talent to support their risk management initiatives. People leaders across entities continue to face new workforce challenges and opportunities.

Consider a global pandemic, the surge of demand in remote work, and more emphasis placed on employee wellbeing. The main issue here is determining how and where to best allocate resources to internal programs within an organization to come up with more innovative solutions.

Human Capital Management difficulties stem from employee engagement based on reward systems, digital disruptions, and evolving employee values and perceptions. For instance, misalignment between what employers offer and what employees value can range differently in the categories of well-being, flexibility, or purpose. All of these are categories that correlate to attraction and retention.

Technology complicates things further as Artificial intelligence (AI) and automation are reshaping roles by changing the required skills and redefining how work gets done. Risk leaders who are not paying attention to how their roles and their employee’s roles are being transformed will soon find that they will struggle to fill skill gaps they were not previously keeping up with.

Once this issue is then attempted to be addressed, there will be a new wave of potential talent with different employee values ranging from salary, job expectations, benefits, and work-life balance.

Additionally, emphasis needs to be placed on identifying the value gap between a company's actual cost spent on retaining or recruiting employees and how much value they create for the organization. Even in times of crisis, the differentiator between companies that recover and those that falter often comes down to how they manage their talent. Visible leadership and a rapid, authentic response to crises outperform those that downplay risk or fail to act decisively. In every case, it’s about trust, and trust is built or broken by how companies treat their people. This can be measured by analyzing the gap between how much an organization spends on attracting and retaining talent versus the measurable value those employees deliver. However, this is not always a clear indicator of Human Capital Management success. A negative value gap for an organization (more resources allocated to employees compared to their actual value) does not necessarily mean that human capital management is being taken care of.

The bottom line is that the ability to recruit, engage, and retain top talent isn’t an HR problem, it’s a business continuity problem. In departments built to anticipate and respond to uncertainty, consistent use of talent strategy frameworks should be created and dedicated to tracking DE&I metrics, AI readiness of employees, and performance benchmarking corresponding to business goals. Companies are also using advanced analytics and location-based modeling to determine where talent can thrive in remote, hybrid, or in-office environments.

Ultimately, risk managers must now view talent not just as a workforce issue but as a critical asset and liability because, in a future defined by agility, trust, and transformation, the organizations that win won’t just have better models. They’ll have better people. While pay is a draw for potential talent, it is often challenging for the public sector to compete with private-sector offerings. This is why organizations should pay more attention to creating a positive value gap while cultivating a positive workplace that not only attracts top talent but inspires them to stay