Study Finds: 5 of Executives’ Top 10 Risks for 2024 Involve IT & Recruitment

January 17, 2024
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Protiviti, a global business consulting firm, conducted a study on what C-Suite and executives think are the highest impact risk issues in 2024. Half of the top 10 risks listed involve Information Technology (IT) and recruitment. This article delves into these risks and discusses potential mitigation strategies.

Study Overview & Methodology

The study, titled “Executive Perspectives on Top Risks for 2023 and 2032”, was conducted by Protiviti in collaboration with NC State University’s ERM Initiative. Executives were tasked with rating 36 individual risk issues, using a 10-point scale to signify the potential impact on their organizations in the short and long term.

The report contains results from the 11th annual worldwide risk survey of over 1,300 directors and executives. The aim was to understand better the extent to which a broad collection of risks will likely affect their organizations during 2024. Respondents were asked to evaluate each risk on its relative impact, ranging from “No Impact at All” to “Extensive Impact”. Ranking the average scores for each risk determined the top 10 risks for 2024.

Exploring the IT & Recruitment Related Risks

Of the top 10 risks in 2024, five involve IT and recruitment. We will explore these five risks and share insights for each.

Ability to Attract, Develop, and Retain Top Talent

Expanded Version of Risk from Study

“Ability to attract, develop and retain top talent, manage shifts in labor expectations, and address succession challenges – Our organization’s ability to attract, develop and retain top talent, navigate evolving labor expectations and demands (including generational distinctions), and address succession challenges amid the constraints of a tightening talent/labor market may limit our ability to achieve operational targets.”

Summary

With a score of 5.93, the ability to attract, develop, and retain top talent ranked second in the top 10 risks. This risk underscores the importance of a robust talent management strategy to counter the tight talent market.

Mitigation Strategies

Standard ways of addressing this risk include employee development programs, offering competitive compensation packages, and fostering a positive work culture.

With Gen Z set to make up a larger percentage of the workforce in the near future, recruiting from this talent pool is of growing importance. For helpful tips on this, read our article, How to Attract and Retain Gen Z Talent.

Additionally, partnering with a specialized IT staffing and recruitment company can help companies access a wider pool of qualified candidates and fill talent gaps quickly.

Recommendation Highlights

The Protiviti study emphasizes the need for organizations to embrace new talent strategies in 2024 and beyond. Some of the recommendations from Protiviti to address this threat include:

  • Adopt a new talent mindset
  • Align talent and business strategies
  • Conduct a talent inventory
  • Start running talent forecasts
  • Measure and report skills

Cyber Threats

Expanded Version of Risk from Study

“Cyber threats – Our organization may not be sufficiently prepared to manage cyber threats such as ransomware and other attacks that have the potential to significantly disrupt core operations and/or damage our brand.”

Summary

Cyber threats ranked third in the top 10 risks with a score of 5.90. This risk’s rank moved from 15th in 2023 to third in 2024, a significant jump for one year. While a top concern in 2024, the risk of cyber threats has also been identified as a long-term Top 5 risk by 9 out of 10 executives in this study.

The recent developments in AI and the expected accessibility of quantum computing are some of the main drivers in this focus on cyber security. As digital transformation accelerates, organizations must prioritize cybersecurity to protect their digital assets and maintain customer trust.

Mitigation Strategies

Implementing robust cybersecurity measures, conducting regular security audits, and providing cybersecurity training to employees are all key components in protecting against this risk. Additionally, hiring cybersecurity professionals can help organizations stay ahead of emerging threats and ensure the security of their digital assets.

If you want to learn more about tactics for scaling cybersecurity at small, medium, and large companies, here is an article from The Ash Group on this topic.

Recommendation Highlights

Some of the recommendations from Protiviti’s report to address cyber threats include:

  • Understand ransomware threats
  • Hold on to cybersecurity talent
  • Learn the threat landscape of generative AI
  • Audit cybersecurity and privacy compliance
  • Pay attention to quantum computing’s impact on cyber

Adoption of Digital Technologies Requiring New Skills in Short Supply

Expanded Version of Risk from Study

“Adoption of digital technologies requiring new skills in short supply – The adoption of digital technologies (e.g., artificial intelligence, automation in all of its forms, natural language processing, visual recognition software, augmented/virtual reality simulations and the metaverse) in the marketplace and in our organization may require cross-functional skills in Agile, Lean and design that are in short supply in the market as well as significant efforts to upskill and reskill existing employees to fully utilize the new capabilities.”

Summary

With a score of 5.52, this risk ranked sixth in this study. The rapid adoption of digital technologies is creating a demand for new skills. However, these skills are in short supply, posing a significant risk to organizations. Upskilling existing employees and attracting new talent with these skills will be crucial to fill talent gaps.

Mitigation Strategies

Companies can mitigate this risk by investing in employee training and development programs to upskill their workforce. Additionally, organizations can partner with IT staffing and recruitment companies to access talent with the required skills.

Existing IT Infrastructure Unable to Meet Performance Expectations

Expanded Version of Risk from Study

“Existing operations and legacy IT infrastructure unable to meet performance expectations as well as “born digital” competitors – Our existing operating processes, in-house talent, legacy IT infrastructure, lack of digital expertise and/or insufficient digital knowledge and proficiency in the C-suite and boardroom may result in failure to meet performance expectations related to quality, time to market, cost and innovation as well as our competitors, including those that are either “born digital” or investing heavily to leverage technology for competitive advantage.”

Summary

The IT infrastructure and processes meeting performance expectations risk ranks seventh on the top 10 list, scoring 5.51. Outdated IT systems or processes not only limit competitiveness but also pose cybersecurity and data privacy concerns. As businesses increasingly rely on digital technologies, their IT infrastructure must be robust and capable of supporting them.

Mitigation Strategies

Depending on the anticipated performance expectations, mitigating this risk could be as simple as optimizing existing operations or as complex as upgrading or overhauling current IT systems. IT professionals with expertise in infrastructure management are a key component in addressing this risk and ensuring the reliability and performance of IT infrastructure.

To learn more about innovations in cloud computing, a growing domain in IT system updates, read this article from the Ash Group.

Increases in Labor Costs

Expanded Version of Risk from Study

“Increases in Labor Costs – Anticipated increases in labor costs may affect our opportunity to meet profitability targets.”

Summary

Increases in labor costs scored 5.43, making it ninth in the top 10 risks. With the previously mentioned top risks of recruitment and retention, companies will need to find a balance between offering competitive compensation packages to attract and retain talent and managing their bottom line.

Mitigation Strategies

Organizations can mitigate this risk by optimizing their workforce planning and management processes. Additionally, leveraging automation and digital technologies can help organizations improve efficiency and reduce labor costs.

Conclusion

We hope these insights into executives’ top IT & recruitment-related risks have been valuable. If you are looking for recruitment solutions or want to learn how The Ash Group can turn your business objectives into a fully supportive workforce strategy, please get in touch with us below.

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