Aon’s Global Risk Management Survey provides data and insight to enable organisations to make better decisions around the risks they face. Ruth Murray, client director, public sector Scotland at Aon, assesses the findings of Aon’s latest survey and the steps organisations can take to manage the risks.
The global COVID-19 pandemic has had a dramatic effect on perceptions of risk, with new threats and concerns coming to the fore as everyone adapted to the new circumstances. Understanding the nature of these risks enables organisations to take the necessary mitigation action.
Just how much perceptions have changed can be seen in Aon’s 2021 Global Risk Management Survey. This survey is conducted every two years, with this year’s report gathering the views of 2,344 respondents across 60 countries/territories and from public and private companies of all sizes.
Risk and the pandemic
Given the experiences of the last two years, pandemic risk/health crises is a new addition to the top 10, taking seventh spot, but this year’s list strongly reflects the effect the pandemic has had on organisations. Cyber attacks / data breach, which was the sixth most significant risk in 2019, is now seen as the number one risk globally, highlighting the greater reliance on technology during the pandemic.
Business interruption is in second place, shifting up from fourth in 2019. During the pandemic, many organisations found that business interruption could be much broader, affecting multiple industries simultaneously and globally.
The top risk from 2019 – economic slowdown / slow recovery – takes third place in the latest survey. It’s still a major concern, especially as normality returns and economic recovery programmes kick in, but it’s a risk that’s overshadowed by the experiences of the last two years.
Public sector risk perception
Drilling down into the data shows how public sector organisations’ perceptions of risk differ to the global view. The top two global risks – cyber and business interruption – fall to second and sixth position respectively.
Instead, damage to reputation/brand is the number one risk among public sector organisations. This is understandable. Public sector organisations have had to adapt significantly during the pandemic, with many employees on the frontline. This level of change can create a huge risk to reputation.
Another risk that features in the public sector top 10 is failure to attract or retain top talent. Although this doesn’t make the global top 10, it takes joint seventh spot alongside pandemic risk among public sector respondents. This reflects the difficulties that public sector organisations are experiencing with staffing, potentially exacerbated by the stressful situations many of those on the frontline experienced.
Managing the risks
As risks change, it’s important to adapt the strategies used to manage them. The nature of the risk itself may change, or new tools and insurance products emerge to enable better management.
These are three of the risks from this year’s public sector top 10 that may benefit from a review.
- Cyber risk
This risk is constantly evolving as criminals look for new ways to exploit organisations and individuals. The way we use technology is also changing, most notably as a result of the shift to home and hybrid working.
Fortunately, just as the risk evolves, mitigation solutions are also changing to ensure that this risk can be managed. For instance, at Aon we have a full suite of products to support organisations’ cyber risk mitigation programmes. These include security assessments and testing; cyber risk quantification; cyber insurance; and Stroz Friedberg Incident Response.
- Pandemic risk
Recent experiences of dealing with a pandemic may make this exercise easier, but it is worth exploring other potential health crises when building risk management plans. Robust plans will need to include incident response procedures and protocols; business continuity planning; and a review of mission critical activities. Even simple steps such as holding an up-to-date list of employee contact information can make a significant difference to an organisation’s response.
Aon can provide a range of advice around pandemic risk, including Crisis Consultancy and Healthcare Risk Consultancy, to ensure your plans are comprehensive.
- Failure to recruit and retain top talent
Public sector organisations are hugely dependent on their employees so failing to recruit and retain talent can have serious implications. It can lead to additional costs, where employees need to be replaced, and reputational damage if services are affected by staff shortages.
Investing in training and development and providing career growth potential can help to develop a pipeline of talent but it’s also important to listen to employees and create a workplace culture that supports them. A health and wellbeing strategy based around the key pillars of wellbeing – emotional, social, financial, physical and career – is a good starting point.
Aon can support your talent strategy with solutions including Benefits Audit and Benchmarking, Engagement surveys and Health and Wellbeing Consulting and programme design.
More information
For a copy of Aon’s 2021 Global Risk Management Survey, visit 2021 Aon Global Risk Management Survey. To discuss any of the risks discussed in this article and find out how we can support you, speak to your Aon account manager or contact Ruth Murray at [email protected].
| Aon’s Global Risk Management Survey |
| Rank |
Top 10 risks - 2021 |
Top 10 risks - 2019 |
Top 10 risks - public sector, 2021 |
| 1 |
Cyber attacks / Data breach |
Economic slowdown / Slow recovery |
Damage to reputation / brand |
| 2 |
Business interruption |
Damage to reputation / brand |
Cyber attacks / Data breach |
| 3 |
Economic slowdown / Slow recovery |
Accelerated rates of change in market factors |
Failure to innovate / Meet customer needs |
| 4 |
Commodity price risk / Scarcity of materials |
Business interruption |
Regulatory / Legislative changes |
| 5 |
Damage to reputation / brand |
Increasing competition |
Economic slowdown / Slow recovery |
| 6 |
Regulatory / Legislative changes |
Cyber attacks / data breach |
Business interruption |
| 7 |
Pandemic risk / Health crises |
Commodity price risk |
=7 Failure to attract or retain top talent |
| 8 |
Supply chain or distribution failure |
Cash flow / liquidity risk |
=7 Pandemic risk / Health crises |
| 9 |
Increasing competition |
Failure to innovate / Meet customer needs |
Increasing competition |
| 10 |
Failure to Innovate / Meet customer needs |
Regulatory / Legislative changes |
Cash flow / Liquidity risk |