Brilliance in Resilience Part 5 – Spotlight on key sectors

In the most turbulent of times, European companies face a myriad of challenges and crises, particularly within specific industries. With uncertainty, risk, and disruption at an all-time high, the question arises: how can businesses adapt, evolve, and thrive in such volatile times? What is the optimal model of organizational resilience to adopt? These are the questions driving our Brilliance in Resilience blog series. In this fifth instalment, we spotlight several key sectors facing acute challenges, examining how they cope and what resilience strategies they can employ.

The utility sector – navigating multiple crises

The utility sector has become an increasingly critical target for cyberattacks, highlighting the growing challenge of securing infrastructures against new threats. Recent attacks on European oil terminals, such as SEA-Tank in Belgium, Mabanaft in Germany, and Evos in the Netherlands, disrupted operations across fuel and oil distributors, forcing gas stations to switch suppliers and driving up costs. As utilities struggle with cyber threats, the added strain of a global labor shortage compounds the challenge.
 
A 2022 report from the Global Energy Talent Index reveals that 75% of workers in the energy sector are considering moving to another industry within the next three years, with 77% considering leaving the energy field entirely. Career progression, environmental, social, and governance (ESG) concerns, and innovation are key motives for this attrition. Combined with rising costs for transmission and distribution lines, the utility sector faces additional pressure from financial shocks triggered by shutdowns due to severe weather events, cyberattacks, and the ongoing energy crisis.
 
Climate change and natural disasters further complicate the forecasting of power supply and demand, often leading to outages and price spikes. These fluctuations can disrupt industrial activities, affect consumer spending habits, and increase uncertainty. To better prepare for these unpredictable events, the utility sector must focus on building resilience by enhancing cybersecurity measures, investing in workforce development, and improving energy forecasting models.

Financial services – under siege

The financial services sector is facing similar challenges, with cyberattacks posing a major concern due to the sensitive nature of financial data. According to the Global Financial Services Information Sharing and Analysis Center (FS-ISAC), 24% of member-reported incidents involve phishing campaigns. Cybersecurity firm UpGuard revealed that in 2021, the financial industry was the most targeted, accounting for nearly 25% of all cyberattacks.
 
Labor shortages are also prevalent in financial services, worsened by the pandemic and the competition for talent from fintech companies. The UK’s Financial Services Skills Commission (FSSC) reported that 92% of member firms had hard-to-fill vacancies in 2021, a trend that has continued into 2022 and 2023. Deutsche Bank, for example, increased its payroll costs by 30% last year to retain talent.
 
The geopolitical events of recent years have further compounded financial shocks across the sector. Inflation, rising interest rates, and recessions have pressured financial services companies. Switzerland, which had enjoyed stable inflation for decades, saw inflation rates jump to 3.3% in September 2022—driven primarily by a 24.1% increase in energy prices. To cope, the sector must bolster its cybersecurity infrastructure and seek innovative talent retention and attraction approaches.

Retail – facing workforce and consumer shifts

Retail has been one of the hardest-hit sectors, especially regarding labor market shocks. Workforce attrition is rampant, with the U.S. Bureau of Labor Statistics reporting an employee turnover rate of 60% in retail—a figure echoed in other markets. A 2021 survey by the Food Industry Association revealed that 80% of retailers had difficulty hiring and retaining employees. The reasons? Poor working conditions, dated technologies, pandemic shifts, supply chain challenges, and employees’ growing demand for work-life balance.
 
The sector has also witnessed a rise in “quiet quitting,” where employees do the bare minimum due to burnout. A European survey by LifeWorks revealed that 41% of workers were at high risk of developing mental health disorders due to low morale from the pandemic, war, and rising cost-of-living crises.
 
Financial shocks further complicate the retail landscape. Rising energy costs, inflation, and supply chain disruptions drive production expenses, utility bills, and inventory overhead. Retailers are left to balance raising prices enough to maintain profitability while not alienating price-sensitive consumers. To remain resilient in these challenging times, the sector must invest in workforce well-being, technology upgrades, and flexible pricing strategies.

Pharmaceuticals – caught in the supply chain crossfire

The pharmaceutical industry is also facing severe disruptions. The Russian invasion of Ukraine sent energy prices soaring, prompting lobby group Medicines for Europe to warn European ministers that material costs had risen by between 50% and 160%. This led to discussions about halting the production of some lower-cost generic drugs. In addition, the rising geopolitical tension between Western countries and China—the leading exporter of active pharmaceutical ingredients—threatens to further increase costs and cause supply shortages.
 
The industry is also grappling with transportation issues. Pharma carriers are raising their rates amid demand surges and limited supply, leading to delays and cancellations. The result? Shortages of essential drugs, such as baby formula in the U.S., Tamoxifen in Germany, and even life-saving treatments like Ozempic and Metalyse in Europe. In Switzerland, unavailable essential drugs rose from 57 in 2020 to 82 by the first quarter of 2022.
 
These shortages are compounded by active pharmaceutical ingredients and drugs being highly sensitive to temperature and handling conditions, increasing the risk of damage during transportation—especially as shipping delays have doubled since the pandemic began. These damages incur significant costs and can delay critical treatments for patients across Europe.

Looking ahead: resilience for the future

Each sector faces its own unique set of challenges, yet common themes of cyber threats, labor shortages, financial shocks, and supply chain disruptions are apparent across the board. The key to building resilience lies in adopting proactive strategies: investing in cybersecurity, upskilling and retaining talent, improving supply chain visibility, and ensuring financial flexibility to weather unexpected shocks. As we continue our exploration of resilience, our next blog will focus on the critical role digital innovation plays in helping organizations overcome these crises and emerge stronger. Stay tuned for more insights on navigating the future with resilience and foresight.

Get in touch
Subscribe to the Brilliance in Resilience blog series for expert insights on building organizational resilience in the face of unprecedented challenges. In our next blog Part 6, we’ll dive into preparing for macro shocks—those unpredictable forces that can reshape entire industries. Stay informed with the strategies that will help your business survive and thrive in an uncertain world.

<- Back to Part 4