The disconnect between what employers offer and what workers actually need is now a measurable business risk
Canadian employers are losing talent not because they can't find workers — but because their own programmes are driving them away.
That is one of the central findings of Marsh and Mercer's People Risk 2026 report.
Canadian organizations ranked uncompetitive talent strategies — outdated combinations of pay, benefits, career development, and employee experience — as their top people risk this year, diverging from global peers who placed inadequate cyber threat literacy first.
Thirty-five percent of C-suite respondents said outdated well-being and benefits programmes no longer meet the needs of the modern workforce.
The report linked these gaps directly to disengagement, attrition, and an inability to attract skilled workers — particularly in technology-focused roles.
Employee financial insecurity ranked fourth globally and fifth in Canada, driven by inflation, high interest rates, and rising housing and healthcare costs outpacing wage growth.
The report described the risk as structural rather than cyclical.
Employees under financial stress, it found, were also more likely to neglect cybersecurity best practices and more prone to workplace misconduct — making financial insecurity a risk that compounds across the organization.
The report warned that cutting benefits to manage costs often backfires.
Organizations that reduce coverage tend to see higher turnover, lower productivity, and more volatile claims over time — offsetting short-term savings.
Despite 90 percent of risk and HR leaders identifying rising health and benefit costs as the most likely risk to materialize within two years, unaffordable or inaccessible healthcare ranked dead last — 25th out of 25 people risks globally.
The report called this a persistent disconnect between cost awareness and preventive action.
Mental health was the exception, ranking ninth globally.
Yet fewer than a quarter of insurers include mental health screenings as a standard feature of health plans, and only half offer access to counselling services.
The report noted that untreated mental health conditions escalate into more complex and costly medical claims, with downstream effects on absence, productivity, and workplace safety.
While organizations continue to invest heavily in AI, 35 percent of Canadian HR and risk professionals said their organizations were adopting AI without adequate employee training and upskilling.
The report found most organizations still expect employees to layer AI onto existing workflows rather than redesign work itself — a pattern it said risks automating inefficiencies rather than improving outcomes.
Mercer's Global Talent Trends 2026 research found that 63 percent of employees would trade a 10 percent pay raise for better AI and digital reskilling opportunities, suggesting demand for employer-led development is high and underutilized.
The report identified inadequate leadership skills as the single biggest risk multiplier, triggering or worsening more downstream risks than any other factor — from mental health deterioration to unsafe working conditions.
In Canada, unsafe working conditions appeared in the top people risks for the first time.
Organizations where HR and risk functions collaborated fully reported significantly stronger outcomes.
Full collaboration produced a 39-percentage point advantage in the effectiveness of succession planning and similarly large gains in reskilling, medical insurance coverage, and rewards communication, compared to organizations with weak collaboration.
Only 14 percent of respondents described their organization's risk maturity as transformative.
Those that did reported risk mitigation measures that were, on average, 15 percentage points more effective than organizations still at the experimental stage — translating into stronger decision-making, greater workforce stability, and reduced exposure.
The report surveyed more than 4,500 HR and risk professionals across 26 markets, including more than 300 in Canada, between October and November 2025.
