RALEIGH, N.C. (WNCN) — Business leaders should brace themselves once again: 2023 is expected to be the riskiest year in a decade.
That has become a common theme through annual surveys of business leaders conducted by researchers from North Carolina State University and consulting firm, Protiviti.
Two years ago, they pegged 2020 as the riskiest year for businesses since the Great Recession of the early 2000s. Then a year ago, they expected 2022 to start a volatile 10-year period for businesses.
It raises a key question: What’s pushing these risk levels higher and higher with each passing year?
“I think it’s the reality that more executives are realizing that the level of uncertainty is significant, and it’s rapidly changing,” said Mark Beasley, the director of the Enterprise Risk Management Initiative of N.C. State’s Poole College of Management and the report’s co-author.
“People are just realizing and accepting the reality that there’s a lot of complex uncertainty out there that then presents risk,” he added. “And those can happen pretty fast.”
The authors of the report say the “overall severity and magnitude” of risks were at “the highest level we have observed in the 11 years” the study has been conducted.
“I think people are just recognizing it’s much more complex than we really have been accepting that reality,” Beasley said.
The survey of more than 1,300 business executives once again also sought their biggest individual areas of risk both in the upcoming year and a decade out in 2032.
Five of the top 10 risks from last year remained the same in both time frames.
Many of the risks in both — including each of the No. 1 anticipated risks — center around talent and concerns about attracting, retaining, compensating and nurturing it with the right culture. And there are also questions about broader risks like the softening economy and supply chains.
But one thing that has largely faded from the top of business leaders’ minds — the COVID-19 pandemic, which accounted for two of the top three risks entering 2022.
“They have sort of dropped down in significance and things that have sort of pushed that out of the way,” Beasley said. “It’s not that it’s not a concern. I just think some other issues are more front and center.”
Beasley says the survey should inform executives and boards of directors who then should have honest conversations about what each views as the risks on the horizon.
That’s because people in each position tend to look at different risks and assume others view it the same way.
“So if we’re not talking about risk, then we all think we’re managing the same risk,” Beasley said. “But we’re not, because I’m worried about something, and you’re worried about something totally different. So we’re all going in different directions. And one of us might be right, one of us might be wrong, or we both might be wrong. Let’s talk it through. Because risks are complex.”