The top risks according to business leaders in 2025

By: David Dickinson, Customer Research Director, Sentry Insurance

Ask most business leaders what’s keeping them up at night, and it’s rarely just one thing. Today’s operating environment is defined by a convergence of challenges—from ongoing labor shortages and persistent inflation to supply chain unpredictability and increasing operational risks.

Sentry’s 2025 C-Suite Stress Index, which polled 1,000 business leaders, confirms what many already feel:

• 47% cite economic volatility as a top concern

• 44% express concerns over supply chain challenges

• 38% say labor shortages are a threat to operations

This intersection of workforce, financial, and leadership pressures is forcing executives to reprioritize—shifting energy away from long-term strategy toward managing short-term needs.

Inflation may not dominate headlines the way it did a year ago, but it remains a serious issue for many businesses. Rising costs for raw materials, labor, and logistics are complicating budgets and eroding margins. In some cases, leaders are forced to delay investments in innovation or expansion just to stay afloat.

Our survey shows that economic volatility (47%) is the top concern among business leaders across company sizes. The February 2025 NFIB report reflected a similar trend, noting that “the net percent of owners expecting the economy to improve fell 10 points” from a month earlier to 37% (seasonally adjusted).

For companies already operating on tight margins, volatility only adds more uncertainty to planning.

The supply chain is a pressing concern this year for executives and leaders, as they may face a two-fold problem. Global tariffs could affect industries within the physical economy—particularly those who rely on raw materials, parts, products, and equipment from overseas. Uncertainty and cost pressures have led some businesses to stockpile inventory and adjust their pricing in the short-term.

A second, long-term effect, could include businesses shifting operations closer to home—a move known as reshoring. While working with local suppliers may offer greater control over production and distribution, it may introduce a new set of challenges. One of the most pressing questions will be whether domestic supply chains have the workforce necessary to meet increased demand.

While headlines have shifted to other topics, labor shortages haven’t gone away. In fact, they’re reshaping how companies think about workforce planning, safety, and productivity.

The Bureau of Labor Statistics reported more than 7.6 million open jobs as of February 2025. That trend has led leaders to look inward, according to our survey, with 43% asking their current employees to increase output beyond current expectations.

It's an ongoing challenge that will prompt leaders to rethink how they recruit, train, and retain talent.

With so many immediate challenges to manage, strategic planning may take a back seat. 67% of business leaders report higher stress levels in 2025, and nearly one in five (18%) feel “significantly higher” pressure. Instead of focusing on growth or innovation, they’re consumed by navigating disruptions—both internal and external. 97% admit their company has put off updates due to cost pressures or scarce resources.

The result is a shift in leadership mindset. Time that was once spent growing their business may now be spent resolving staffing gaps or adjusting to emerging risks. This constant pivoting may advertently shift focus from proactive initiatives to reactive measures.

Managing overlapping risks isn’t easy. But leaders across industries are finding ways to stay focused and forward-thinking, even in an unpredictable environment. Here are a few strategies we’re seeing emerge:

• Building flexibility into workforce models—whether through upskilling, outsourcing, or cross-training

• Establishing financial security by assessing changes to the risk environment and implementing strategies—such as risk transfer or risk sharing—to mitigate financial setbacks

• Strengthening local partnerships to create more resilience in supply chains and operations

There’s no silver bullet—but clarity on what’s driving stress and disruption is the first step toward building smarter, more adaptive strategies. For many leaders, that includes managing their stress by more proactively managing their risk: taking stock of exposures, mitigating external threats, and seeking out expert guidance to stay ahead of what’s next.