Is the world getting riskier? According to the 2017 Travelers Business Risk Index, an increasing amount of Americans are saying “no.” As a matter of fact, the perceived overall risk outlook has been on a steady incline since the insurance company began surveying consumers in 2013 and business owners and executives in 2014. The Index, chock full of data, revealed the top risks to supply chain executives, from transportation to manufacturing.
When it comes to key findings, the study found that some factors have remained consistent, while others are adapting to a changing environment. This includes emerging trends, such as the evolving workforce and emerging technologies that represent some of the greatest opportunities — and risks — for business over the next five years. Prevention measures are also big, as businesses are more likely to take basic risk-prevention measures and less likely to address more complex risk issues with strategies.
Other key findings highlighted show that small business owners tend to worry less about risk, therefore making them less prepared compared to mid-sized and larger businesses. However, some do see a riskier world, as healthcare, transportation, banking, and financial services and non-profit organizations are more likely than other industries to believe their business environment is becoming more risky. And, according to the Index, more businesses are worried about supply chain risks, with numbers showing 28% of a concern in 2017, compared to 23% in 2016. This, in turn, has employee safety becoming an increasing concern, particularly in these industries: construction (45%), healthcare (42%), transportation (46%), and manufacturing (52%).
Overall, the top five concerns over the same worries from previous years remained the same. Since 2014, the most worrisome risks remained the same as in earlier years, including medical costs, cyber risks, and employee benefits. Of the five key risks tracked year over year, medical cost inflation continues to rank as the most worrisome to businesses overall, followed by cyber, computer, technology, and data breaches and risks. Another financial worry — increasing employee benefits costs — comes in at number three. Legal liability — including the risk of the business being sued — and the ability to attract and retain talent and skilled labor, rank fourth and fifth, respectively.
When it comes to the industrial workforce, two major areas of concern are in manufacturing and transportation.
Manufacturers reported greater concerns about attracting and retaining talent, safety on the job, and returning employees to work after injury, compared to businesses as a whole. As increased automation, globalization, and a changing workforce reshape manufacturing, the top manufacturing concerns reflect these emerging trends. With a growing skills gap for highly technical jobs, manufacturers are more concerned than other industries about attracting and retaining workers (63%), as well as avoiding workplace injury (47%).
The impact on the business if highly skilled employees are injured can be significant in terms of lost productivity and increased medical costs. With injuries and chronic pain making their ways into healthcare costs, manufacturers need proactive management of their workers compensation process to contain costs and help employees through the process of returning to work. Thirty five percent of manufacturers are more worried compared with other industries about effectively returning employees back to work after an injury.
In summary, Travelers outlines the top risk concerns for manufacturers:
- Cyber Risk: While 46% of manufacturers surveyed worry about cyber risks, only 20% have a cyber/data breach incident response plan in place.
- Worker injury : 47% of manufacturing leaders worry about this, compared with 36% of businesses overall.
- Skills Gap : With a growing skills gap for highly technical jobs, manufacturers are more concerned about attracting and retaining workers (63%) and workplace injury (47%) than the general business population is.
Looking at transportation, Travelers’ research shows that, with an aging workforce and the potential for road fatigue, the industry is challenged with making drivers ready to meet business demands. Transportation companies have reported concerns about risks rated to employees and driving, and, alarmingly, 57% are concerned about accidents caused by employees. This comes along with distracted driving, inexperienced drivers, and the general health of the workforce.
Looking up the road, transportation companies expect the changing workforce, energy dynamics, and driverless vehicles to present the greatest emerging risks over the next three to five years. Of course, telematics and other technology innovations have the potential to protect their business, but must be right-sized.
To recap, top transportation concerns, according to Travelers include:
- Forty-five percent of transportation leaders believe their environment is becoming riskier , compared with 37% of businesses overall, according to the 2017 Travelers Risk Index, released today. Other key findings include:
- Changing workforce: 43% of transportation leaders say this is one of the greatest risks to their business over the next five years, compared with 38% of businesses overall.
- Distracted driving: Distracted driving, inexperienced drivers and the general health of the workforce are top concerns. More than half of transportation companies (57%) are concerned about accidents caused by employees.
- Emerging technologies: 30% view driverless vehicles as one of their greatest emerging risks. Telematics and other technology innovations have the potential to protect their business, but must be right-sized.