Survey findings
4. Workforce adaptability amid transformation
This section is designed to assess how strategically material human capital risk is to the organisations in the medium and long term, and how effectively it is governed and managed. It builds on the conclusion of the Marsh’s People Risk 2026 report, which ranks among its top 10 risks labour shortages, uncompetitive talent strategies, technology skills shortages, and mindset barriers to AI adoption.
Key takeaway:
Medium-to-long-term workforce risk implications of the upcoming transformative trends are still not fully captured in companies’ analysis processes.
European corporates share a similar view: nearly 30% consider talent shortages or critical skills gaps to be material at the enterprise level, with a slightly higher proportion among listed companies (38%) and those with revenues above €5 billion (50%). Around half of the respondents say these issues are material for specific business units.
How material is talent shortage or critical skills gap to your organisation’s medium-term strategy?
Enterprise level material risk
Material in specific units/functions
Emerging/limited impact
Not material
Source: Marsh
With respect to how these risks are considered, 63% of respondents assess human capital risks within strategic plans either in a structured and measured way (21%) or qualitatively (42%). By contrast, 29% rely on the annual enterprise risk management (ERM) risk assessment cycle as the sole input to strategic planning. This share rises to 38% among non‑listed companies.
To what extent are human capital risks integrated into strategic planning and plan revisions?
Through structured identification and measurement of risks and their impact on strategic objectives
Through a purely qualitative analysis in the strategic planning process
Only within annual risks assessment
Not integrated
Source: Marsh
Regarding medium and long-term structural shifts — driven, among other factors, by AI adoption, automation, and the transition to a clean economy — only 30% of respondents report conducting robust analyses, either through quantitative scenario modelling (8%) or assessments focused on core processes (22%). The remainder report only “some qualitative consideration” (55%) or no action (15%).
To what extent does your organisation run workforce scenarios to assess medium and long-term impacts (e.g., AI adoption, automation, energy transition) on roles, skills, operations?
Quantification of the impact on the organisation and understanding the operational implications across the various departments
Quantification of the impact on the organisation and understanding the operational implications on core business processes
Some qualitative evaluations
No scenario analysis related to workforce
Source: Marsh
Overall, these results suggest that attention to people risks is skewed towards the short- to medium-term, rather than towards the structural impacts that external forces are likely to have on business models. This finding warrants further investigation. However, it may indicate an emerging competitive vulnerability for European corporates in global markets.
Similarly, fewer than one-fifth of respondents have structured data analytics in place to inform KRIs for ongoing monitoring and early warning. Large corporates with revenues above €5 billion perform better (33%), but proactive people risk management remains an area for improvement.
Attention to people risks is skewed towards the short- to medium-term.
To what extent do risk, HR, business, and operations jointly define and operationalise key risk indicators (KRIs) to monitor human capital risk?
Through structured data analytics across the whole organisation
Through manual data monitoring across the whole organisation
Through selected data only for external disclosure purposes
No human-capital related KRIs are defined
Source: Marsh
Actions to address skills gaps — such as reskilling, hiring, partnerships, and similar measures, which may be partial and more reactive than anticipatory — are already underway for 35% of respondents, while a further 24% are still in the planning stage. Listed companies are further ahead, with around 50% reporting initiatives in progress, compared with non-listed companies, which more often remain confined to short-term or reactive measures (45%).
Company size also appears to matter. Smaller organisations tend to adopt less structured approaches, with 62% of companies generating less than €500 million in revenue reporting mainly short-term or reactive actions.
Operational complexity, reliance on a limited pool of critical skills for value creation across multiple processes are among the factors that make talent shortages and critical skills gaps material at the enterprise level for companies in energy and utilities, logistics, technology, and fashion. People risk maturity in these sectors tends to be higher. However, the risk management gaps outlined above are also evident among these organisations.
Following human capital risk assessment, what is the current status of plans to mitigate critical skills gaps?
European corporates broadly recognise people risk as a material strategic issue, often with implications that extend beyond individual functions. However, the way these risks are reflected in strategy is still largely qualitative and tends to prioritise near-term pressures. Consideration of deeper structural shifts, such as those driven by technological change and economic transition, remains limited and is not yet fully and consistently embedded in forward-looking workforce analysis. In parallel, the use of data analytics and KRIs to support continuous monitoring and early warning is not yet widespread, reducing organisations’ ability to anticipate and respond early. As a result, even where mitigation initiatives are launched, these limitations may dilute the effectiveness of investments by making actions more reactive, less targeted, and harder to track against measurable outcomes.