72% of leaders feel their businesses are not quick enough to tackle risks from global trends, survey finds

72 per cent of business leaders believe that their companies are not adapting quickly enough to address risks linked to megatrends such as trade, technology, weather and workforce, a recent study has found.

The 2024 Business Decision Maker Survey, conducted by global professional services and management consulting firm Aon plc, included insights from more than 800 C-suite and business executives of companies with more than 500 employees across North America, the UK, and Europe. It is based on results from 24th April to 5th May 2024. It focused on how trends are impacting the decisions that they need to make to protect and grow their businesses.

The results of the study confirmed the importance of trade, technology, weather, and workforce in influencing the decision-making process of these business leaders. Indeed 72 per cent stated that they do not feel their businesses are moving fast enough to address risk and people issues.

Despite this, 86 per cent of respondents recognise the importance of tackling these challenges and opportunities.

However, growing complexity and volatility within the aforementioned four megatrends are making decision-making increasingly difficult.

Aon CEO Greg Case (pictured above) said that business decision-makers “recognise the enormity of the challenges presented by the megatrends of trade, technology, weather and workforce and they are looking for actionable insights and innovative tools to address critical risk and people issues.”

The majority of survey respondents identified all four megatrends as being extremely important to their organisations, with trade, technology, and workforce being ranked as top priorities (over 80 per cent). 70 per cent rated weather as a top priority risk.

As trade issues worsen, 74 per cent of decision-makers stated that they are taking on more personal responsibility for supply chain functions. The top risks in this regard were supply chain or distribution failure, as well as exchange rate fluctuations.

When it comes to technology, decision-makers noted that artificial intelligence (AI) and data analytics are critical, yet also generate new risks.

72 per cent of decision makers quantified cyber risk scenarios and 67 per cent increased training on cybersecurity. 63 per cent of decision-makers have measured the return on investment (ROI) of cybersecurity initiatives and 61 per cent have audited IT suppliers to manage third-party risks and IT sprawl.

The survey found that extreme weather and climate change have effects on business risks, as 66 per cent of leaders recognised the need for significant changes in how organisations address future climate risks.

Despite this, decision-makers still exhibited slower action when it comes to issues tied to the weather than those related to other megatrends.

It was also highlighted that business leaders are adjusting workforce strategies in order to meet the needs for the green transition.

52 per cent said that climate risk leads to a reskilling or upskilling of workers to meet the demands of green tech, while 45 per cent said that it results in the creation of a mission-driven culture that attracts and retains talent.

The primary workforce concerns include balancing costs with providing a compelling and enriching employee experience. Rising workforce costs are posing major challenges, as 57 per cent of companies are changing benefit of healthcare offerings to improve affordability.

Additionally, the survey also highlighted contrasts in risk preparedness between organisations in the US with those in Europe and the UK.

48 per cent of US leaders noted supply chain disruption as a top trade risk, significantly higher than the 27 per cent of leaders in the EU and UK.

On the other hand, and unsurprisingly given the conflicts in Ukraine and the Middle East, 44 per cent of EU and UK leaders viewed war and political instability as a top trade risk (28 per cent in US).

Aon President Eric Andersen remarked that as the megatrends continue to being more interconnected, “businesses which adopt a comprehensive, data-driven, forward-looking approach to risk management will more confidently address challenges and seize opportunities.