Labour shortages, skills gaps, and cyber literacy reshape Europe’s risk outlook, according to Marsh’s 2026 People Risks Report
LONDON, May 19, 2026 ─ Labour shortages have emerged as the most critical people risk for organizations in Europe, according to the 2026 People Risks Report released today by Marsh (NYSE: MRSH), a global leader in risk, reinsurance and capital, people and investments, and management consulting.
Drawing on insights from over 620 HR and Risk professionals across France, Germany, Italy, Poland, Spain, and Turkey, the report outlines the most significant people risks facing organizations. It reveals that labour shortages carry the highest risk rating score and a 62% likelihood of occurrence in the next 1-2 years, surpassing global averages. This risk is particularly acute in sectors such as manufacturing, energy, retail, and construction, fuelled by demographic shifts, skills mismatches, and intensified competition for talent.
These workforce pressures are compounded by other high-priority risks. While cyber risk remains a top global concern, Europe’s unique landscape places labour shortages at the forefront, followed closely by inadequate cyber threat literacy and technology skills shortages. Rising health and benefit costs also remain significant, with more than half of respondents rating their impact as catastrophic or high.
At the same time, organizations are investing heavily in AI, yet a growing concern is whether that spend will translate into meaningful gains in productivity, innovation, and performance. In Europe, 58% of organizations report advanced or transformative AI maturity, suggesting AI is already embedded across core processes. However, 40% of HR and Risk professionals are concerned that AI is being implemented without adequate training, and 35% cite potential employee resistance driven by fears of job loss.
“These findings show how tightly linked today’s people risks are—and how directly they impact resilience and performance—starting with labour shortages, Europe’s most critical risk,” said Tony Wood, Mercer Marsh Benefits’ Europe Leader. “Organizations can take a strategic approach to attracting, retaining, and upskilling talent while strengthening workplace benefits and cyber resilience, so they can address labour market pressures alongside cyber and health risks and thrive amid ongoing uncertainty.”
The report also underscores the importance of advanced risk management maturity and strong collaboration between HR and Risk functions in Europe, with 37% fully collaborating and 46% partially collaborating on people risk management. Such collaboration correlates with more effective mitigation strategies and improved organizational stability.
Planning priorities for European organizations include supporting employee mental health and managing mobility challenges related to geopolitics (41%), adapting workforce planning to urbanization and intergenerational tensions (32%), climate resilience measures such as insurance for climate threats (40-41%), and AI-related safeguards including training to identify malicious AI content (38%) and addressing cybersecurity vulnerabilities (37%).
“People risks cannot be secondary concerns, as they impact the health and well-being of the workforce and the business,” added Hervé Balzano, Mercer’s President of Health and Benefits and Mercer Marsh Benefits’ Global Leader. “In 2026, resilience depends on how well organizations invest in their people: building the right skills, supporting health and financial security, and redesigning work so humans and technology can perform at their best together.”