Human capital risks seen as the most significant threat companies face

Yet few firms have effective practices in place to manage the threat

International risk managers surveyed by the Economist Intelligence Unit cite human capital risks as being the most significant threat they face to their global business operations. The findings show that human capital risks, such as skills shortages, succession issues and the loss of key personnel, were seen by respondents as being more significant than threats from reputational risk, information technology risk, political risk and regulatory risk. This represents a change from a year ago, when reputational risk was perceived in our quarterly risk barometer survey as being the biggest threat that respondents faced.

Despite acknowledging the importance of the skills issue, just 32% of the survey respondents say that they manage human capital risks effectively. The only areas where they feel less confident are risks associated with terrorism and climate change.

These results form part of Best Practice in Risk Management: A Function Comes of Age, a new Economist Intelligence Unit survey and report sponsored by ACE, IBM and KPMG. In addition to exploring specific categories of risk and the effectiveness with which respondents manage them, the report also examines the way in which companies from a wide range of sectors and regions organise themselves to manage the risk function.

See full Press Release.