5 global business risks employers should watch for in 2024

December 22, 2023 5:30 AM

Red system hacked warning alert on laptop.

Between the threat of a recession and rapidly evolving technology, it's been a year of uncertainty for many employers — and it won't necessarily get easier in 2024.

Global professional services firm Aon released a list of the biggest management risks businesses faced in 2023, with cybersecurity, the economic slowdown and retention failures making the top five. While employers have finally reached the end of a tough year, many of these challenges aren't going anywhere since they are ultimately tied to the one thing all businesses need to succeed: talent.

"The top risks involve some form of human-level connectivity," says Lambros Lambrou, CEO of human capital at Aon. "That's really elevated executive teams' awareness of the interconnected nature of risk and human capital and why human capital has to be prioritized."

Whether it's cyber security or legislative changes, employers need workers to weather the threats to their businesses. This point is further underlined by the fact that the failure to attract and retain talent was the fourth biggest overall risk employers grappled with this year, notes Lambrou. If employers hope to overcome obstacles currently headed their way, they can't afford to ignore talent in 2024.

Here are the top five global business risks to employers, according to Aon.

Cyber attacks

Aon estimates that 74% of data breaches involved some level of human error or misuse of technology and credentials. And given that cyber attacks increased by 176% in just the first half of 2023, according to Aon, companies will have their hands more than full if they don't better educate and train their workforce on this front. In fact, Aon predicts cyber attacks will remain in the number one spot until at least 2026.

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"The cause of a cyber event normally happens as the result of human intervention — it can be as simple as someone clicking on a link in an email without following guidance," says Lambrou. "Executive teams have to understand that the human element of this risk is inside their organizations and understand how to protect against this volatility.

Business interruption

Aon defines business interruptions as the loss of income or profit when a company's typical operations are suspended. This may come in the form of property damage due to a climate disaster, geopolitical events like war or wildfires disrupting a supply chain or a scarcity of materials or even workers. As war and genocide continue to impact the globalized economy and climate change ushers in more volatile natural events, business interruptions are only bound to become more common. But depending on a company's workforce — their level of engagement, experience and skills — these interruptions can at least be endured, explains Lambrou.

Economic slowdown

Given that the U.S. seemed to be holding its breath in anticipation of a recession this year, it's unsurprising that economic slowdown made it in the top three. This risk often pushes employers to limit spending as they prepare for the worst — as a result, layoffs increase and hiring slows, as talent often takes the hit in a tumultuous economy. According to Aon, over half of employers felt they suffered a loss due to this risk, from a loss in productivity and workers to a loss in revenue.

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Lambrou highlights that once again, risk and human capital are closely tied, with the loss of workers potentially only worsening a business's level of productivity and adaptability in the face of economic downturns.

Failure to attract and retain talent

Employers can't seem to escape the problem of attraction and retention. Lambrou notes that talent has very different expectations than they did in a pre-pandemic work world. Pay is higher, flexibility is a table-stakes benefit, and the multi-generational workforce seeks to have its unique needs met. However, there is a silver lining — companies started seeing people management as something that should be prioritized by the executive team, not just HR, says Lambrou.

"People-related issues are often defined as HR-related challenges, but COVID forced leadership teams to problem solve together in the face of this risk," he says. "History was not a great determinant of the future here, so organizations had to start getting a real understanding of what's happening on the people side."

According to Aon, 66% of employers have plans in place to address this risk, highlighting that while companies are struggling to maintain a complete and engaged workforce, many are actively trying to do better.

Regulatory or legislative changes

Between cyber regulations, emerging AI laws, pay transparency requirements and global warming regulations, it's been a year of legislative change and compliance nightmares. As technology continues to evolve and political tensions rise, laws are bound to get more complicated as employers struggle to meet requirements demanded by different states and countries for their international workforce.

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Still, Lambrou hopes the waves of change can encourage employers to come together and rethink their approach to business and human capital. He is confident more change and upheaval is on its way, and employers will need to look to people inside and outside their company to strategize.

"We're seeing [leaders] being very interested in creating environments where they can be vulnerable with each other, share best practices, anxieties and perspectives," says Lambrou. "At Aon, we aim to deliver those forums for clients so they can get analytical feedback and recommendations and ultimately make better decisions.