A recent Aon survey looked at risk and how companies manage it. One of the findings was that organizations—especially Canadian ones—have a hard time attracting and retaining talent.
Aon, a global provider of risk management services and reinsurance brokerage, has just released its latest biennial report on corporate risk management. Conducted in Q4 2010, the report represents 960 organizations from 58 countries (mainly North America and Europe). It aims to help risk managers stay abreast of emerging issues and learn how other companies are managing risks.
According to the survey respondents, the Top 10 most pressing risks (in order of importance) are:
1) Economic slowdown
2) Regulatory/legislative changes
3) Increasing competition
4) Damage to reputation/brand
5) Business interruption
6) Failure to innovate/meet customer needs
7) Failure to attract or retain top talent
8) Commodity price risk
9) Technology failure/system failure
10) Cash flow/liquidity risk
The first observation: Despite the encouraging signs of the global economy, the shadow of the financial crisis is still present, such that economic slowdown is the risk most often mentioned, topping the list in all countries and in 17 of the 27 sectors polled. 67% of respondents said they had suffered a drop in revenue during the past year because of this risk.
Two risks not mentioned in the 2009 report arose in 2011: cash flow/liquidity risk and the failure to innovate and meet customer needs.
Attracting and retaining
Respondents ranked the failure to attract or retain top talent 7th in the list of top 10 risks ; Canadian respondents rated it second.
There are two reasons for this factor’s rise in importance from 10th place in the 2009 report. First is the end of the recession: recruiting was not a priority for companies from 2007–2009. Some had to freeze hiring, or even lay off staff.
Afterwards, paradoxically, Aon analysts noted that 60% of CEOs polled said they had no plan to manage this type of risk, and only 4% said they dealt with talent attraction and retention consulting firms.
The report’s authors say that it is crucial for companies to set up internal or external structures that can compensate for this deficiency, if they wish to remain competitive in an improving global economy, in which the search for talent will once again become a major issue.