Global Business Risks 2024-25: Insights from Aon's Survey

As the 2023-24 financial year nears its end, businesses worldwide are preparing for the upcoming challenges and opportunities in FY 2024-25. Board meetings and strategic planning sessions are on the agenda, highlighting the importance of understanding the landscape of risks and opportunities for achieving success. Aon's Global Risk Management Survey illuminates the top 10 challenges that businesses are expected to encounter in the coming year, providing invaluable insights to inform decision-making and strengthen resilience. Drawing from the perspectives of over 2,800 executives representing diverse sectors across 61 countries and territories, this survey delivers a comprehensive overview of the risks shaping the business landscape in the year ahead.

 Cyber Threats: Growing Risks in a Digitally Driven World

Recently published Aon's Global Risk Management Survey highlights cyber-attacks and data breaches as the foremost risks for organizations worldwide, a concern expected to persist until 2026.

With escalating cyber threats, companies face heightened vulnerabilities, necessitating robust risk mitigation strategies.

Cyber-attacks, encompassing threats, breaches, and ransomware incidents, pose significant financial and reputational risks. Despite temporary declines, ransomware attacks resurged in 2023, emphasizing the need for sustained vigilance. Human factors like social engineering contribute substantially to cyber risks, underscoring the importance of employee awareness and training.

Business Interruption: A Persistent Challenge Amidst Disruptions

Ranked as the second most significant risk presently, business interruption showcases its profound impact, exemplified by events like the 2023 wildfires in Canada. These interruptions jeopardize businesses, affecting reputation, customer trust, and cash flows. COVID-19 exacerbated challenges, emphasizing the need for resilient risk management strategies.

The evolving landscape of business interruption extends beyond traditional factors to include supply chain disruptions and workforce shortages. Organizations must prioritize continuity planning to navigate uncertainties effectively and ensure operational resilience.

Economic Slowdown: Anticipating Market Dynamics and Challenges

While currently the third most pressing risk, economic slowdowns are expected to rise in significance by 2026. Such downturns impact consumer purchasing power, supply-demand dynamics, and operational stability. Businesses face challenges in managing liquidity, expenses, and workforce amidst uncertainties.

Navigating global economic fluctuations requires defensive strategies to safeguard financial stability and operational resilience. Organizations must adapt swiftly to changing market conditions, emphasizing agility and proactive risk management.

Talent Acquisition: Balancing Competition and Retention Strategies

Failure to attract or retain top talent ranks fourth among global risks, a challenge expected to persist. Securing high-performing individuals is critical for innovation and competitiveness. Rising salaries, inflation, and evolving preferences intensify talent acquisition complexities.

To mitigate talent acquisition challenges, organizations must redefine their Employee Value Proposition (EVP) through personalized, data-driven approaches. Crafting targeted EVP strategies enhances the ability to attract, retain, and engage top talent, safeguarding against people-related risks.

Regulatory Complexity: Navigating Legal Landscapes for Compliance

Regulatory or legislative changes rank fifth in global risks, with diverse regulations reshaping business environments. Organizations face complexities in compliance across countries and industries, imposing burdens and costs. Emerging regulations in privacy, sustainability, and AI further compound challenges.

Proactive compliance measures are essential to mitigate legal and financial risks amidst regulatory uncertainties. Organizations must stay abreast of evolving regulations, implementing adaptive strategies to ensure compliance and operational continuity.

Supply Chain Resilience: Balancing Efficiency and Risk Mitigation

While currently ranked sixth, supply chain failures are anticipated to decrease by 2026. Efficient supply chains face risks from disruptions, talent availability, and cyber exposure. Building resilience requires sustained efforts to manage risks effectively.

The evolving definition of supply chain risk encompasses talent availability, ESG performance, and cyber exposure. Despite challenges, organizations must prioritize resilience, balancing efficiency with risk mitigation strategies.

Managing Commodity Price Volatility: Safeguarding Profitability

Ranked seventh among global risks, commodity price volatility poses challenges in managing raw material costs and scarcity. Geopolitical events and transitions to renewable energy sources contribute to heightened volatility, impacting profitability.

Robust risk management strategies are essential to mitigate commodity price risks effectively. Investments in domestic supply chains and renewable energy initiatives enhance resilience against market uncertainties.

Protecting Brand Reputation: Prioritizing Trust and Transparency

Ranked eighth among global risks, brand reputation vulnerabilities stem from stakeholder trust erosion and external factors like social media amplification. Proactive, ethical practices and data-driven insights are essential for effective reputation risk management.

Amidst volatile market conditions, organizations must prioritize transparency and ethical conduct to safeguard brand reputation. Data-driven insights enable proactive identification and mitigation of reputation risks.

Innovation Imperatives: Adapting to Evolving Market Dynamics

Failure to innovate ranks ninth among global risks, emphasizing the importance of adapting to changing consumer preferences and technological advancements. Agile, customer-centric approaches are essential for sustaining competitiveness in dynamic markets.

Organizations must remain vigilant to emerging trends and technological advancements, prioritizing innovation to meet evolving consumer needs effectively.

Addressing Increased Competition: Fostering Agility and Differentiation

Ranked tenth among global risks, increasing competition underscores the importance of agility and differentiation for sustained growth. Disruptive technologies and changing consumer preferences intensify market dynamics, influencing strategic decisions.

Organizations must prioritize agility and customer-centricity to navigate competitive landscapes effectively. Proactive differentiation strategies are essential for sustaining growth amidst evolving market challenges.