The biggest issues of concern for UK firms are the impact of financial uncertainty (34%), employee health and wellbeing (31%), and supply chain disruption (23%) on their businesses over the next 12 months, according to report by broker and risk advisor Marsh.

According to the research, financial uncertainty is the top risk facing UK businesses 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). Marsh suggests this is due to businesses strengthening their financial resilience during the pandemic and a return to more familiar financial risks, post-Covid.

The findings come from Marsh’s UK business risk report 2023, which 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.

Despite operating in a challenging trading environment, many UK businesses are optimistic about their financial prospects for the year ahead, with 50% expecting an increase in productivity, 47% expecting an increase in turnover, and 46% expecting an increase in profitability.

Alistair Fraser, CEO of commercial & corporate at 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.”

The findings also reveal that people-related risks are a big concern, with employee mental health and wellbeing (31%), talent retention, attraction and succession planning (22%), and health and safety of the public and employees (21%) taking second, fourth and fifth place respectively.

Over the last 12 months, only 47% UK businesses addressed health and safety policies and procedures, and employee mental health and wellbeing offerings (51%). Looking ahead, these are likely to be the top two ‘people’ priorities. Reviewing workplace culture and leadership is also cited as a focus area for one in three businesses in the year ahead.

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