Uncompetitive talent strategies named top people risk for Canadian organizations, according to Marsh report
Toronto, May 4, 2026 ─ Canadian organizations have identified uncompetitive talent strategies as the number one people risk they are currently facing, 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. Canadian organizations differ from global peers who identified inadequate cyber threat literacy as their top risk.
Drawing on insights from more than 4,500 HR and Risk professionals across 26 markets, including more than 300 participants from Canada, the report highlights that technology disruption is driving the top people risks, the workforce-related factors that can amplify or mitigate enterprise risk and impact organizational resilience and performance.
“People risks cannot be secondary concerns, as they impact the health and well-being of the workforce and the business,” said 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.”
In Canada, employers rank uncompetitive talent strategies as the number one people risk highlighting the need to collapse ineffective, outdated, or irrelevant programs and refresh their strategies to have the workforce they need for the challenges ahead. These outdated strategies are a combination of pay, benefits, career development, flexibility and employee experience which lead to disengagement, attrition and the inability to attract and retain top talent.
Technology skills shortages, such as those in cyber and AI, follow closely at number three globally and in Canada, reflecting a growing gap between digital ambition and workforce readiness.
“Canadian businesses need to overhaul legacy rewards programs, reinventing the way they build the workforce of the future,” said Jennifer Schmidt, Partner of Mercer Canada. “Thirty-five percent of C-suite respondents are concerned about outdated well-being and benefits programs not meeting the needs of the modern workforce. Being competitive now means updating the approach to compensation, benefits, career development and upskilling to help businesses attract the caliber of talent needed to fill technology focused roles that are in demand.”
While organizations continue to invest heavily in AI, the most significant threat may be translating that spending into real productivity, innovation and performance gains. Mindset barriers to AI adoption now rank among the top global people risks. Thirty-five percent of HR and Risk professionals in Canada are concerned that their organizations are investing in and adopting AI without adequate training and upskilling.
In Canada, 39% of HR and Risk professionals are concerned that their organizations have insufficient HR technology budgets to adopt new technologies and 38% are concerned they will be unable to support employees and businesses in moments of crisis.
Leadership gaps and labour shortages amplify risk
In Canada, the top concerns around labour shortages are skills mismatches between available employees and required roles (40%), increased labour costs due to competition for talent (35%) and operational disruption from insufficient staffing (32%).
At the same time, the report identifies inadequate leadership skills as the single biggest risk multiplier, triggering or worsening issues like mental health deterioration and unsafe working conditions, which put productivity, performance, and reputation at risk. In Canada, unsafe working conditions appears in the top people risks for the first time, and as the top risk according to HR respondents.
Financial stress and health risks undermine performance
Financial insecurity of employees is now a material organizational risk, ranking fourth globally and fifth in Canada. According to respondents, employees’ rising living costs and debt burdens are directly linked to lower employer retention and engagement, as well as potential misconduct in organizations.
“Despite concerns about rising benefit costs and growing mental health challenges, HR and Risk professions are deprioritizing health-related risks as they are overshadowed by more immediate concerns,” shared Amy Laverock, Mercer Marsh Benefits’ Global Advisory Specialties Leader. “This highlights a concerning disconnect. Organizations are attempting to separate health outcomes from risk management, when they are inherently intertwined.”
Risk maturity delivers a measurable advantage
Organizations that report more advanced approaches to managing risk also consistently report having more effective people risk mitigations in place. Additionally, the report shows, companies with strong collaboration between the Risk and HR functions have significantly more effective risk mitigations in place today — translating into stronger decision-making and greater stability.
“Forward-looking organizations recognize that their workforce is not just a source of risk, but their greatest strategic asset,” Ms. Laverock added. “Those that act now — investing in leadership and technology skills, as well as employee health and financial security — will be best equipped to turn uncertainty into advantage.”