By Simon Miller
Financial services firms are struggling to contain their employees' appetite for risk according to a survey released today.
The survey found that employees had significantly higher risk appetite than their employer permitted, which in itself presents the risk that workers will bypass procedure and take matters into their own hands.
In 2011, the gap between risk appetite rose to a five-year high with employees reporting a 21% higher risk appetite than the financial company they work for.
Jon Dymond, director at Hay Group which produced the report The Stubborn Gap, commented: “The disparity between employee and employer risk appetites has continued to climb over the last three years, clearly demonstrating that financial services firms are struggling to tackle the risk gap."
He added: "We have already witnessed the consequences of employees side-stepping company policy, sometimes to disastrous effect. If financial services firms want to bridge the risk gap, they need to tackle it head on by ensuring they understand the root cause of the mismatch."
According to the study, rather than tackling the problem of the risk gap, however, companies are in fact embedding high-risk behaviour into their businesses.
Dymond continued: “Historically, and for sound commercial reasons, financial services companies have recruited and developed achievement focused, target driven individuals and perpetuated a high achievement – and high risk – culture.
“Despite the best efforts of regulators, new rules on reward, and financial services firms beefing up their risk management functions, attempts to manage risk are proving insufficient. An excessive focus on compliance rather than culture is not delivering results."