Digital disruption to return as top risk over next decade

Government policies regarding public health practices remain the biggest risk for business leaders in 2022, according to a new survey. In the next decade, though, most leaders expect that the adoption of new technologies will have returned to the top of the agenda.

In the years leading up to 2020, digital transformation had swiftly become the top priority for businesses across the industrial gamut. The cost savings, efficiency boosts and ability of technology to free up human labour for value adding activities had captured the imaginations of firms around the world, who were keen to see how digital could transform and improve their organisations, and profitability.

The advent of the pandemic changed much of that. While the need to digitalise did not go away – as organisations had to make provisions for months of remote working – the more immediate realities of the Covid-19 crisis meant the top priorities soon related to public health and employee wellbeing. After all, as so many studies prior to the pandemic made clear, digital transformation cannot supply meaningful change without a human workforce to implement it.

A new study from consultants at Protiviti has further illustrated this. Polling more than 1,000 business leaders around the world, regulations and market conditions due to Covid-19 remain top concerns for board members and C-suite executives in 2022. Almost 60% of respondents said policies on public health, such as social distancing and crowd limits, which could ‘impact the performance of our business’ were the top risk going into the year.

Immediately after, organisations’ ability to attract and retain top talent was the second-placed risk. In a tightening talent market, which has resulted amid the pressures of the coronavirus, firms are having to put more thought into how to keep workers from seeking new pastures – both in terms of workplace safety, and the remuneration offered. Meanwhile, the adoption of digital technologies, such as AI, automation and virtual reality software, was lower down, as the fourth-highest risk priority.

Upcoming risks

Interestingly enough, while the immediate impacts of Covid-19 are expected to diminish in the coming decade, this point is anticipated to have a lingering effect. Looking ahead to 2031, business leaders said workforce and talent-related issues will remain a primary concern, indicating that the impact of the ‘Great Resignation’ will persist as their organisations struggle to fill the talent requirements to support their strategies.

“The tectonic plates of traditional workforce models and talent retention have shifted dramatically as a result of the global pandemic and digital transformation, a dynamic which isn’t expected to go away any time soon, according to global leaders,” said Jim DeLoach, a Protiviti managing director and co-author of the report. “Looking forward, businesses need to shift their focus to adapting to the ‘new nimble’ rather than searching for a ‘new normal.’”

However, while succession challenges, and the ability to attract and retain top talent will be high on the agenda, the need for digital transformation will have returned as the top risk in 2031. This may be due to digitalisation being viewed as a useful antidote to multiple issues. As well as being able to take on some forms of work – decreasing the pressure to fill certain roles – new technology can also help address the rapid speed of disruptive innovations from rivals, and help meet new sustainability and ESG criteria, that is becoming increasingly important to customers.

Dr. Mark Beasley, professor and director of NC State University's ERM Initiative and co-author of the report, added, “It’s clear that business leaders expected a faster return to normalcy and stability, but talent issues and macroeconomic conditions are continuing to contribute to volatility. Nearly all organisations we surveyed are facing talent challenges and shortages, coupled with the need to invest in technology infrastructure and capabilities to effectively engage remote employees, manage dispersed workforces and serve customers on their terms.”