Top risk concerns for 2023 Our organization's succession challenges and ability to attract and retain top talent and labor amid the constraints of a tightening talent/labor market may limit our ability to achieve operational targets Economic conditions (including inflationary pressures) in markets we currently serve may significantly restrict growth opportunities, impact margins or require new skill sets for our organization Anticipated increases in labor costs may affect our opportunity to meet profitability targets Resistance to change in our culture may restrict our organization from making necessary adjustments to the business model and core operations on a timely basis Uncertainty surrounding our organization's core supply chain including the viability of key suppliers, scarcity of supplies, energy sources, unpredictable shipping and distribution logistical issues, or lack of price stability in the supply chain ecosystem may make it difficult to deliver our products or services at acceptable margins Changes in the overall work environment including shifts to hybrid work environments, expansion of digital labor, changes in the nature of work and who does that work, and M&A activities may lead to challenges to sustaining our organization's culture and business model The adoption of digital technologies (e.g., artificial intelligence, automation in all of its forms, natural language processing, visual recognition software, virtual reality simulations) in the marketplace and in our organization may require new skills that either are in short supply in the market for talent or require significant efforts to upskill and reskill our existing employees Our organization's culture may not sufficiently encourage the timely identification and escalation of risk issues and market opportunities that have the potential to significantly affect our core operations and achievement of strategic objectives Our approach to managing ongoing demands on or expectations of a significant portion of our workforce to "work remotely" or increased expectations for a transformed, collaborative hybrid work environment may negatively impact our ability to retain talent as well as the effectiveness and efficiency of how we operate our business Our organization may not be sufficiently resilient and/or agile to manage an unexpected crisis (including a catastrophic event) significantly impacting our operations or reputation View full breakdown Resistance to change is a top concern among respondents who continue to worry that their organization’s overall culture may reflect a reluctance to make needed adjustments to the business model and core operations fast enough. The lingering challenges related to managing a complex, global supply chain in a world encumbered with uncertainties are top of mind for executives and boards. Notable observations Executives and boards reveal challenges in attracting and retaining talent as well as meeting the expectations of an evolving workforce and shifting hybrid, remote and in-person work environments to meet employee expectations and needs. Flexibility has been the norm for many organizations as they adjust to compete for different types of talent, particularly those with digital and analytic skillsets. Leaders also recognize how an ever-evolving workforce may impact the culture of the organization. Concerns about succession challenges and the ability to attract and retain talent continue to be significant, perhaps in response to the continued numbers of individuals exiting the workforce, leaving millions of jobs unfilled as part of the so-called great resignation. Ongoing frustrations around compensation, lack of flexible work options, mental health issues and other workplace challenges associated with the lingering pandemic-related environment continue to create challenges in attracting and retaining the right talent needed for strategic success. The hybrid and remote work environments that were created at the beginning of the pandemic continue to impact the overall culture as workers are less able to interact informally on an ad hoc basis given their isolation and asynchronous work schedules. Board members and executives are concerned about how hybrid and remote working situations might negatively alter the organization’s culture and talent development as well as its ability to execute its business model. Notably, respondents also expressed concerns about the impact of their organization’s culture on the ability and willingness of employees across the organization to escalate risk concerns on a timely basis to those at the top, including executives and boards. That lack of escalation may stem from a lack of awareness of how to escalate risk concerns or it may also stem from a reluctance or fear to be the bearer of bad news. Both are worth evaluating. Tight labor markets are allowing the workforce to have a louder voice as organizations rush to attract and retain needed talent. Employee workplace expectations continue to evolve, and organization may not be able to adjust appropriately to compete in the highly competitive talent marketplace. This continues to create challenges for organizations as they attempt to determine their long-term strategies for talent acquisition and retention. The tight labor market and the war for talent are triggering concerns about heightened labor costs as organizations compete in the talent marketplace. Understandably, there are concerns about higher labor costs impacting profitability expectations. The rapid embrace of digital and virtual technologies and other digital platforms for product and service deliveries continues to expand in the global economy, creating concerns among many board members and executives who believe they may not have the talent and skills needed to successfully support and leverage those technologies to compete effectively in the marketplace. The lingering challenges related to managing a complex, global supply chain in a world encumbered with uncertainties are top of mind for executives and boards. Survey December 8, 2022 Executive Perspectives on Top Risks for 2023 and 2032 The level of uncertainty in today’s global marketplace and the velocity of change continue to produce a multitude of potential risks that can disrupt an organization’s business model and strategy on very short notice. Read more
