Losing customers and struggling to find talented workers are the top two risks facing business leaders across the world, according to a new report published by Lloyd's.
Based on a global survey of 500 business leaders, carried out by the Economist Intelligence Unit, Lloyd's Risk Index 2011 shows fears about falls in orders and - despite high levels of unemployment - a shortage of skilled workers.
These have displaced the lack of credit as the greatest worry for businesses, which topped the Index in 2009. Lloyd's chief executive Richard Ward said:
“Two years ago, businesses told us they were primarily concerned about the cost and supply of credit. Now they are facing an even greater business fundamental, with many wondering just what’s happened to their customers, and where can they find the skilled staff they so desperately need."
Dr. Ward described the survey, carried out by the Economist Intelligence Unit as a "snapshot of the results of two years of economic and political turmoil.”
Interestingly, despite a series of devastating natural catastrophes across the world in the last two years, business leaders placed ‘natural hazard’ risks (ranging from flooding to earthquakes) in the bottom ten of 50 risks. This is despite the $205bn gap that exists between the insured risk and the economic cost of such catastrophes in the first half of 2011 alone.
Despite such economic losses, the Index revealed that 70 per cent of business leaders actually feel better prepared to cope with vast majority of the risks they face compared with two years ago.
Dr. Ward said that while it was "reassuring" to see growing awareness and understanding of unpredictable risks facing global businesses, leaders must also plan for those "rare and hard to predict events that form part of this complex, modern risk landscape".