Workforce Safety Is Now the Top Threat to Competitive Advantage
New research from Travelers and Morningstar applies the Economic Moat framework to workforce risk, revealing why safety now outranks turnover and skills gaps as the biggest threat to business durability.
Key takeaways
- Workforce is a primary competitive advantage. Across four industries – manufacturing, construction, life sciences and technology – workforce capabilities ranked first as their organization’s strongest competitive advantage.
- Maintaining consistent safety practices and reducing workforce injuries ranks No. 1 across every industry surveyed as the biggest threat to that advantage.
- CFOs and risk managers in the same organization consistently disagree on what’s threatening their competitive position. That misalignment is one of the most actionable risks leaders can address.
What threatens long-term competitive advantage?
The forces reshaping the economy right now (accelerating deal activity, ownership transitions, AI adoption and tightening labor markets) are exposing a more complicated picture of competitive advantage than market share, cost structure and brand recognition alone can explain. For years, the assumption was simple: Build a strong enough position and the business sustains itself. The data tells a different story: What sustains it is the workforce behind it.
To understand what makes competitive advantage durable, Travelers partnered with Morningstar, a prominent financial services and investment research company known for its Economic Moat framework. Built on two decades of research, the framework evaluates whether a company has a structural competitive advantage strong enough to sustain excess profits over a long period of time. It's the same fact-based methodology investors and boards trust to assess whether a company’s edge is real and whether it will last. The wider a firm’s moat, the longer it can invest at returns above its cost of capital. Morningstar has identified five drivers that support an Economic Moat: intangible assets, switching costs, network effect, cost advantage and efficient scale.
Travelers used that framework as the foundation for new proprietary research, surveying 700 CFOs and risk managers across manufacturing, construction, life sciences and technology to understand what’s driving, and threatening, competitive advantage today.
The advantage most business leaders say they rely on isn't a patent portfolio or a proprietary platform. It’s their people. Across every industry surveyed, workforce capabilities rank as the top source of competitive differentiation, ahead of financial strength, brand reputation and operational efficiency.
Workforce strength and the confidence gap around it
What makes that finding striking is what came next. When those same leaders were asked how confident they were that workforce strength would endure over time, it ranked among the lowest of any category. That uncertainty extends to competitive advantage broadly: Across all industries surveyed, confidence in long-term durability is low.
No. 1
The ability to maintain consistent safety practices and reduce workforce injuries ranks as the top threat to competitive advantage.
34%
Only about a third of companies surveyed believe their competitive advantage will last 20 or more years.
Anything that destabilizes an organization’s workforce is a threat to competitive advantage. Turnover walks institutional knowledge out the door, and inconsistent safety practices can erode the operational discipline that keeps work on track. A breakdown in training or career development weakens the execution capability the competitive position depends on.
Do CFOs and risk managers see the same workforce risks?
The study showed that CFOs and risk managers within the same organization often diagnose workforce risk differently. When the people controlling resources and the people managing risk aren’t solving for the same problem, investment follows the wrong priorities.
CFOs prioritize short-term workforce stability
CFOs focus on immediate operational readiness, getting employees productive and reducing early turnover.
Risk managers take a longer-term, life cycle-oriented view
Risk managers take a longer view, concentrating on sustaining performance and reducing risk accumulation across the full employee life cycle.
Alignment on strong workforce practices helps competitive advantages last
The organizations best positioned to sustain competitive advantage are the ones that close the gap between how leadership diagnoses risk and how the business actually invests in its people. That starts with asking whether a company’s CFO and risk manager are looking at the same problem.
The 2026-2027 Competitive Advantage Study
This year's Travelers Special Report goes deeper into what's driving and threatening competitive advantage across manufacturing, construction, life sciences and technology, how the Morningstar Economic Moat framework applies to midsize and large businesses, and where the data indicates the most actionable opportunities.
Source
Travelers 2026-2027 Competitive Advantage Study
