Talent Crunch Threatens the East, say region's business leaders
Tue 06 Dec 2011
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While Western governments grapple with an unprecedented sovereign debt crisis which threatens a new recession, Asia's booming economies are most concerned about a shortage of talent and skills according to the latest Lloyd's Risk Index.
The Lloyd’s Risk Index – based on a survey by the Economist Intelligence Unit (EIU) of 500 business leaders – found that the top risk facing Asia-Pacific businesses is a growing talent crunch. The vast majority (70%) of businesses in Asia-Pacific are concerned about a growing talent crunch, compared with less than half in Europe (42%) and North America (45%).
The Lloyd’s Risk Index also shows that risk awareness is rising quickly among business leaders in Asia-Pacific with priority rankings for all categories of risk on average 19% higher than 2009 and 9% higher than the global average.
Lloyd’s Chief Executive Richard Ward said:
“As Asia-Pacific businesses prioritise risk management, we’re seeing an emerging East-West contrast. In the East, the priority risks are those associated with high performing economies – including an emerging skills and talent crunch. This contrasts with the Western world where businesses are steeling themselves for a double-dip recession as a result of the deepening sovereign debt crisis.”
Despite being rocked by a series of devastating natural disasters in 2011, macro-economic risks are the greatest concern for Asia Pacific’s business leaders. The top five priorities identified were:
- Talent and skills shortages
- Currency fluctuation
- Inflation
- Loss of customers/ cancelled orders
- Reputational risk.
The survey found that worldwide, business leaders perceive the world as a riskier place than in 2009. Prioritisation of business and economic risk has increased by 8% across the board since 2009 as operating in an uncertain economic climate has become the norm and natural catastrophes have had complex impacts on global supply chains. The first half of 2011 was the most expensive on record for the insurance industry facing claims from floods in Australia, earthquakes in Japan and New Zealand, and tornadoes in the US. However, there was still a $205bn1 gap between the insured risk and the real economic cost of these catastrophes.
Richard Ward added:
“It’s reassuring to see that businesses around the world have a growing awareness and understanding of the risks they face. Business leaders must plan not only for likely scenarios, but those hard to predict, rare events that form part of this complex, modern risk landscape.”
To find more detail on the top risks facing business today, please visit www.lloyds.com/riskindex
For further information, please contact:
Sarah Robson
Tel: +44 (0)20 7327 6125 Fax: +44 (0)20 7327 5229 Email: sarah.robson@lloyds.com
Tom Foxton
Tel: +44 (0)20 7327 5514 Fax: +44 (0)20 7327 5229 Email: tom.foxton@lloyds.com
About Lloyd’s
Lloyd's is the world's specialist insurance market and occupies fifth place in terms of global reinsurance premium income, and is the largest surplus lines insurer in the US. In 2011, 87 syndicates are underwriting insurance at Lloyd's, covering all classes of business from more than 200 countries and territories worldwide. Lloyd's is regulated by the Financial Services Authority.
About the Survey
The Lloyd’s Risk Index 2011 was carried out by the Economist Intelligence Unit in August 2011. The survey measured attitudes about risk across five categories:
- Business and strategic risk,
- Economic, regulatory and market risk,
- Political, crime and security risk,
- Environmental and health risk, and
- Natural hazard risk.
Survey respondents were distributed across Europe (35%), North America (27%) and Asia-Pacific (27%), with the rest of the world comprising about 10%. Financial services provided the largest number of respondents at 19%, followed by professional services at 13%, manufacturing at 10% and technology at 10%. The remaining 48% of respondents represent a wide range of other industries.
Around one-half of respondents represent corporations with annual revenues of over US$500m.
1 Taken from Insurance Information Institute report Global Economic Turmoil, Catastrophic Loss and Insurance: Implications for Risk Management & Marine Insurance Markets, September 19, 2011
