As you enter the new year, it’s important to understand the risks your business faces. In a recent blog article for the National Association of Corporate Directors (NACD), Jim DeLoach — managing director of the global consulting firm Protiviti — provided a thorough breakdown of critical uncertainties we encourage our Central Indiana clients to keep in mind.
Here are a few risk factors DeLoach highlights that we think you should prepare for over the next 12 months:
Succession challenges: After three years of business obstacles stemming from the pandemic, many business owners and executive leadership members may be burnt out and want to retire, but attracting and retaining talent to fill their roles remains difficult.
The economic climate: Economic conditions, such as inflation and supply chain disruptions, could slow your business’s growth well below your projections.
Increased cost of labor: This not only affects recruitment efforts but your ability to turn a profit as well.
Increased dependence on digital technology: This requires new skills, which are in short supply due to labor/ new talent shortages, as well as more time dedicated to training your current employees. And as the adage goes, time is money.
Emergencies: Your business may not be resilient enough to manage a crisis that impacts your daily operations or overall reputation.
Because of the pandemic and government health protocols for businesses across the world, 2023 is marked as the riskiest year in the 11 years Protiviti has conducted its annual risk analysis survey. Talent acquisition and retention are considered the top challenges due to a number of factors, including increased labor costs, resistance to COVID-related changes (remote working, virtual meetings, etc.), increased training time, etc.
Even with increased risk awareness and preparation, there is no guarantee that any business will run smoothly. As DeLoach writes: “Uncertainty surrounding the viability of key suppliers and energy sources, unpredictable shipping and distribution logistical issues, and concerns over price stability in the supply chain ecosystem are impacting the ability to deliver products or services at acceptable margins.”
Having said all of this, don’t be discouraged. Always hope for the best, just prepare for the worst. Businesses must remain agile and responsive to our ever-changing business environments and the many challenges that exist.
The prudent leader proactively plans for all possible outcomes. After the unpredictable and unprecedented past three years, surely you’re ready for whatever 2023 throws your way. And if you ever need any assistance, please don’t hesitate to reach out to us for help. That’s why we’re here. Best wishes for a bright future and a successful 2023!
Please call us at (317) 608-6699 if you have any questions.