According to a new survey from Protiviti and NC State University, pandemic-related regulation and market conditions due to COVID-19 remain top concerns for 2022 for board members and C-suite executives.
Looking ahead to 2031, business leaders cite workforce and talent-related issues as their primary concern, indicating that the impact of many people resigning from their jobs and the “gig economy” will persist as their organizations struggle to fill the talent requirements, including in internal audit. Disruptive innovations and the adoption of transformative technologies requiring many organizations to find employees with new skills, as well as to attract and retain top talent, bolster talent as a chief concern over the coming decade.
The 10th annual survey, titled “Executive Perspectives on Top Risks for 2022 and 2031,” surveyed 1,453 board members and C-suite executives from organizations in a variety of industries and regions globally.
“The results of our joint survey are noteworthy for business leaders the world over,” said Pat Scott, executive vice president of marketing at Protiviti. “We thank the global participants who shared their views and made this year’s survey possible. While current and future business challenges may seem daunting, utilizing the insights and recommendations in our study can provide a roadmap to managing change and disruption successfully.”
The Top Risks for 2022
Survey respondents were asked to rate 36 macroeconomic, strategic, and operational risks. The top five risks identified for 2022 are:
- Pandemic-related government policies and regulation impact business performance
- Succession challenges, ability to attract and retain top talent
- Pandemic-related market conditions reduce customer demand
- Adoption of digital technologies requires significant efforts to upskill/reskill existing employees
- Economic conditions, including inflationary pressures, constrain growth opportunities
“The tectonic plates of traditional workforce models and talent retention have shifted dramatically as a result of the global pandemic and digital transformation, a dynamic which isn’t expected to go away any time soon, according to global leaders,” said Jim DeLoach, a Protiviti managing director and co-author of the report. “Looking forward, businesses need to shift their focus to adapting to the ‘new nimble’ rather than searching for a ‘new normal.”
In the survey findings for 2022, succession issues and the ability to attract and retain top talent jumped from number eight in last year’s survey to number two. Notably, the ability to effectively manage and keep pace with shifting perspectives and expectations about social issues and priorities surrounding diversity, equity and inclusion ranked on the top 10 risks for the first time in the survey’s history.
Mark Beasley, professor and director of NC State University’s ERM Initiative and co-author of the report, said: “It’s clear that business leaders expected a faster return to normalcy and stability, but talent issues and macroeconomic conditions are continuing to contribute to volatility. Nearly all organizations we surveyed are facing talent challenges and shortages, coupled with the need to invest in technology infrastructure and capabilities to effectively engage remote employees, manage dispersed workforces and serve customers on their terms.”
The Top Risks Through 2031
Survey respondents also rated the expected impact of the same 36 risks for 2031 to assess how the risk landscape might shift over the coming decade. According to survey respondents, concerns about the future of work are at the forefront, as the survey identified the following as the top five risks for 2031:
- Adoption of digital technologies requires new skills or significant efforts to upskill/reskill existing employees
- Succession challenges, ability to attract and retain top talent
- Rapid speed of disruptive innovation outpaces our ability to compete
- Substitute products or services arise that affect our business model
- Economic conditions, including inflationary pressures, constrain growth opportunities
The survey results also reveal increasing impacts of ESG-related risks. Business leaders were asked to rank the risk of climate change and related regulations and policies affecting their strategies and business models. Respondents representing industries not dependent on fossil fuels indicated that they are less concerned with climate risk in the year ahead than over the course of the next decade, ranking it 29th in terms of risk priorities for 2022 and 19th for 2031. “Whether this perspective in prioritizing the impact of climate considerations on the business is sustainable in view of global events – for example, the recent COP26 summit ‑‑ remains to be seen,” added DeLoach. 