The latest report from Aon plc highlights that attracting and retaining talent has become a prominent concern for organizations, ranking fourth in the 2023 Global Risk Management Survey’s top 10 global risks. This biennial survey involved nearly 3,000 participants, including risk managers, C-suite leaders, and executives from 61 countries and territories.
Notably, the issue of failing to attract and retain talent did not make it into the top 10 in the 2021 edition, marking its highest-ever ranking since the report’s inception in 2007. This shift indicates a paradigm where human capital challenges are no longer perceived merely as “people problems” but are recognized as significant business risks.
Lambros Lambrou, CEO of Human Capital at Aon, emphasized the pivotal moment when business leaders acknowledge the genuine cost of human capital challenges. He stated, “People risk intensifies all other top business risks.”
Despite this heightened awareness, the report reveals a substantial gap between awareness and preparedness. Only 11% of respondents claimed to have quantified their people risks.
People risk intensifies all other top business risks.
The report underlines that organizations’ failure to attract and retain the best talent can lead to severe consequences. Shortages in talent, workforce, or critical specialized skills can impede innovation and competitiveness, increase vulnerability to cyberattacks and regulatory breaches, and cause supply chain disruptions, business interruptions, and reputational damage.
Recruitment difficulties can also adversely affect the existing workforce, leading to increased pressure, burnout, disengagement, and retention issues.
Beyond talent-related concerns, respondents identified cyber-attacks and data breaches as their most significant risks. The report indicates that employers exhibit the highest level of risk readiness and implement the most risk mitigation actions for this issue.
The overall top 10 global risks include cyber-attacks/data breaches, 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, and increasing competition.
Interestingly, climate and artificial intelligence (AI) ranked lower in 17th and 49th place, respectively, despite widespread discussions on these topics. The report emphasizes the urgency of addressing climate risks and notes that AI introduces new risks and amplifies existing ones, particularly in cybersecurity and human capital.
Andy Marcell, CEO of Risk Capital and CEO of Reinsurance Solutions at Aon, emphasized the urgency of addressing climate issues with advanced analytics and modeling, coupled with innovative parametric solutions, to aid decision-making and future protection for businesses.