The top emerging risk facing companies is…

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The top emerging risk facing companies is…

By Marianne Wilson - 01/22/2019
Companies are increasingly at risk due to escalating staff shortages.

Concerns about “talent shortages” outweighed all others in Gartner’s most recent quarterly “Emerging Risks Survey.” Sixty-three percent of respondents indicated that a talent shortage was a key concern for their organization. The report revealed that retail and hospitality sectors showed particularly high levels of concern in this area, with more than two-thirds of respondents signaling it as one of their top five risks.

Beyond a global talent shortage, organizational leaders are grappling with a series of interrelated risks from a rapidly transforming business environment. Accelerating privacy regulation remained a key concern, dropping into second place in this quarter’s survey. Respondents indicated that the pace of change facing their organizations had emerged as the third most prominent risk, while factors related to the pace and execution of digitalization rounded out the top five emerging risks in this quarter’s survey.

“Organizations face huge challenges from the pace of business change, accelerating privacy regulations and the digitalization of their industries,” said Matt Shinkman, managing VP and risk practice leader at Gartner. “A common denominator here is that addressing these top business challenges involves hiring new talent that is in incredibly short supply.”

Gartner research indicates that companies need to shift from external hiring strategies towards training their current workforces and applying risk mitigation strategies for critical talent shortages.

“Organizations face this talent crunch at a time when they are already challenged by risks that are exacerbated by a lack of appropriate expertise,” said Shinkman. “Previous hiring strategies for coping with talent disruptions are insufficient in this environment, and risk managers have a key role to play in collaborating with HR in developing new approaches.”

Mitigation strategies to address this set of risks often come at least partially through a sound talent strategy. For example, a key Gartner recommendation in more adequately managing data privacy regulations is the appointment of a data protection officer, while both GDPR regulations and digitalization bring with them a host of specialized talent needs impacting nearly every organizational function.

“Unfortunately for most organizations, the most critical talent needs are also the most rare and expensive to hire for,” said Shinkman. “Adding to this challenge is the fact that ongoing disruption will keep business strategies highly dynamic, adding complexity to ongoing talent needs. Most organizations would benefit from investing in their current workforce’s skill velocity and employability, while actively developing risk mitigation plans for their most critical areas.”

Gartner recommends that enterprise risk teams and HR leaders collaborate to clearly define ownership of key talent risk areas that their organization is facing.

“The best organizations are moving away from traditional engagement surveys to understand their talent risks,” said Brian Kropp, group VP of Gartner’s HR Practice. “Building robust talent data collection and analysis techniques to better listen to their employees and identify real-time risks is a key part of this process.”

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