Chicago — May 2
Business leaders identified economic risk as the greatest threat they face today, but also emphasized the need to innovate, mitigate technology failure and manage talent to compete in the future, according Aon's 2011 Global Risk Management Survey.
As the global economy continues to recover, the threat of sustained economic trouble weighs on the nearly 1,000 business professionals from 58 countries who participated in the 2011 Global Risk Management Survey. This group identified the economic slowdown as the number one risk facing organizations across all geographies, with 67 percent of respondents reporting loss of income in the last 12 months associated with this risk.
Failure to attract/retain top talent ranked at the bottom of the top 10 risks list in 2009, a time when companies were experiencing hiring freezes and layoffs. In 2011, this risk is viewed as more acute, taking the number seven spot on the list. Sixty percent of respondents reported they do not have a plan in place to handle this risk, and 4 percent said they are seeking outside support for recruitment and retention strategies.
"Throughout the economic recession, many organizations pulled in their oars – tabling research and development projects, decreasing spend on information technology and freezing hiring," said Constantin Beier, global head of Aon Analytics and chief commercial officer of Aon's Center for Innovation and Analytics in Dublin. "Today, business leaders are realizing this strategy won't work in the long term. Organizations must begin reinvesting in fundamental areas such as these if they are to survive and thrive."
For the first time in survey history, failure to innovate/meet customer needs made the top 10 list of global risks, debuting at No. 6. This development reflects growing concern about the risk of losing market share to more forward-looking competitors. Technology failure/system failure also earned its first top 10 spot, ranking at No. 9. Technology concerns lead to fears about additional risks, including business interruption and damage to brand, which are also found on the report's top 10 list.
Aon's 2011 Global Risk Management Survey Top 10 Risks
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 risk9
. Technology failure/system failure
10. Cash flow/liquidity risk
Source: Aon Corporation