Failure to Attract and Retain Talent Reaches Highest Ever Ranking in Aon Survey, Elevating Human Capital as A Key Business Risk

AON, a leading global professional services firm, announced the results of its 2023 Global Risk Management Survey which gathered input from almost 3,000 risk managers, C-suite leaders, and other executives from 61 countries and territories to identify their most-pressing business challenges. The 2023 edition of Aon’s biennial survey found that human capital issues are no longer simply a “people problem,” but a key business risk that is fueled by rising health care costs, the competition for talent, workforce shortages, and a lack of retirement preparedness.

In 2023, “attracting and retaining top talent” ranked fourth globally, after not breaking the top 10 in 2021, demonstrating a shift in how risk managers are viewing human capital today. Still, only 11% of survey respondents indicated they have quantified their people risks, illustrating a significant gap between risk awareness and risk preparedness.

“We are at a pivotal moment in time, when business leaders are recognizing the true cost of human capital challenges and the reality that people risk intensifies all other top business risks,” said Lambros Lambrou, CEO of Human Capital at Aon. “Shortfalls in talent, workforce, or critical specialized skills can hamper innovation and competitiveness and increase exposure to cyberattacks, regulatory breaches, supply chain issues, business interruption, and reputational damage.”

Despite warnings and headlines, artificial intelligence (AI) (#49) is notably missing from the global top 10 ranking, suggesting a lack of awareness about the potential impact of AI technology.

AI represents one of the most pressing concerns amid technological advancement, as it will transform the enterprise risk landscape for all industries, introducing new risks for many companies and changing the severity and velocity of change of many existing risks. For instance, far-reaching AI programs could increase cybersecurity exposure, engender legal issues, and amplify human capital risks such as scarcity of in-demand skills sets. Risk managers who understand the liabilities and insurance implications of AI across their digital value chain add value to their enterprise AI strategy.

Cyber attacks and data breaches remain the top risk in this year’s survey, both globally and in North America, and they have also climbed to the top spot in Europe and Asia Pacific. Cyber shows the highest level of risk readiness, and consistent with that, it has one of the lowest reported losses of income and one of the highest percentages of risk mitigation actions across all top ten risks. Business interruption remains the number two risk since Aon’s 2021 survey, reflecting the reality that business interruption events are increasing and can affect multiple industries and companies simultaneously.

Overall, the top ten global risks according to the 2023 Global Risk Management Survey are:

• Cyber Attacks/Data Breach
• Business Interruption
• Economic Slowdown/Slow Recovery
• Failure to Attract or Retain Top Talent
• Regulatory/Legislative Changes
• Supply Chain or Distribution Failure
• Commodity Price Risk/Scarcity of Materials
• Damage to Reputation/Brand
• Failure to Innovate/Meet Customer Needs
• Increasing Competition

Conducted every two years since 2007, Aon’s Global Risk Management Survey provides data and insights to enable better decision making around risk in an increasingly volatile and complex business environment. The full Global Risk Management Survey report is available here.

Source: CCH, AON

By Heather Nezich, courtesy of SBAM-approved partner, ASE.

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