Companies are overlooking ‘people risk’ in inflationary, recessionary environment

Credit: Yuri Arcurs peopleimages.com/Adobe Stock

Companies are being challenged in this current — and complex — macroeconomic environment. We are experiencing record inflation and rising interest rates paired with contrasting low unemployment rates and equity market declines year over year. In fact, rising costs and inflation became one of the top concerns for business leaders in 2022, according to Aon’s 2022 Executive Risk Survey, showing that C-suite executives are even more focused on solving the balancing act of increasing performance while managing costs.

Throughout this process, companies need to stay alert to a hidden risk that can create more business impact than today’s economic environment: people risk. The term refers to a broad range of potential negative events an organization could face, from employees making risky or adverse decisions to organizations not quantifying the impact of retirement and knowledge loss.