Financial uncertainty, employee health and wellbeing and supply chain disruption revealed as top risks for UK businesses: Marsh
London, October, 2023. New research has been published by Marsh, the world’s leading insurance broker and risk advisor. The research found that companies across the UK are most concerned about these impactson their businesses over the next 12 months:
- financial uncertainty (34%);
- employee health and wellbeing (31%);
- and supply chain disruption (23%).
The findings come from Marsh’s UK Business Risk Report 2023. It features data obtained in May and June 2023 from over 2,100 UK businesses with turnover of between £100,000 and £500 million + per year. Now in its third year, the report explores how circumstances over the last 12 months have impacted businesses. Specifically, risk appetite and approach to risk management among UK companies. The report identifies their priorities for the year ahead.
According to the research, financial uncertainty is the top risk facing UK businesses. This uncertainty is due to rising inflation, energy prices, and raw material costs. However, only 34% of respondents see it as a significant concern, the lowest percentage in the last three years (43% in 2021, 37% in 2022). This is due to businesses strengthening their financial resilience during the pandemic. And also because they've seen a return to more familiar financial risks, post-Covid.
Businesses are operating in a challenging trading environment. But despite this many UK businesses are optimistic about their financial prospects for the year ahead. The report shows that:
- 50% are expecting an increase in productivity;
- 47% are expecting an increase in turnover;
- and 46% are expecting an increase in profitability.
Other findings include:
- People-related risks are a top concern. Employee mental health and wellbeing (31%) takes second place. Talent retention, attraction and succession planning (22%) is in fourth place. And health and safety of the public and employees (21%) taking fifth place.
- Over the last 12 months, only 47% UK businesses addressed health and safety policies and procedures. And 51% addressed employee mental health and wellbeing offerings. Looking ahead however, these are determined to be the top two ‘people’ priorities. Reviewing workplace culture and leadership is also a cited as a focus area for one in three businesses in the year ahead.
- Environmental, social and governance (ESG) standards were identified as a priority for the majority of UK businesses. Just over half (55%) of respondents understand ESG requirements. And half (50%) are incorporating ESG into business strategy. Some are also already passing those expectations down through their supply chains. With 48% of businesses having reviewed their suppliers’ ESG strategies over the last three years.
- Reporting on ESG performance is already mandatory for large UK businesses. But the vast majority of respondents (76%) have not yet embedded ESG into their business strategies.
Commenting on the findings, Alistair Fraser, CEO, Commercial & Corporate, Marsh UK, said: “The UK risk environment over the last year has been heavily impacted by macroeconomic changes, as well as the trickle-down effects of geopolitical events. From sole traders and fast-growing companies to large established corporates, no commercial entity in the UK is exempt from requiring a robust approach to risk management. This report tells a story of the very broad spectrum of risks facing UK businesses and provides practical advice on how to tackle them, helping strengthen the resilience that they need to grow with confidence.”
More information can be found at https://www.marshcommercial.co.uk/campaigns/risk-hub
About Marsh
Marsh is the world’s leading insurance broker and risk advisor. With over 45,000 colleagues operating in 130 countries, Marsh serves commercial and individual clients with data-driven risk solutions and advisory services. Marsh is a business of Marsh McLennan (NYSE: MMC), the world’s leading professional services firm in the areas of risk, strategy and people. With annual revenue over $20 billion, Marsh McLennan helps clients navigate an increasingly dynamic and complex environment through four market-leading businesses: Marsh, Guy Carpenter, Mercer and Oliver Wyman. For more information, visit marshmclennan.com, and follow us on LinkedIn and Twitter.
