Are blockchains insurable? This question was posed as a topic for presentation by the Center of Insurance Policy and Research, a research arm of the National Association of Insurance Commissioners (CIPR/NAIC). The trigger appears to be that some insurance companies are being asked to insure the business operations of blockchain enterprises. This same question would apply to legacy businesses that may choose to use or participate in a blockchain, which is basically a shared database managed by software. If one listens to blockchain activists, this issue could apply to everyone in the near future. The Ingenesist Project volunteered the following opinion to the question: “Are blockchains insurable?” The article is long and comprehensive, but the implications are staggering. The article begins by describing the landscape of finance and entrepreneurship in terms of insurability. It follows with, in essence, a mathematical proof that blockchains are indeed insurable but that business processes using blockchains may not be. Luckily, the technology offers sufficient mathematical underpinning to adequately calculate risk and thereby pool risk exposures of its components. However, trouble arises when digital assets can neither be treated as money nor as property. As such, an extralegal condition may exist that would be categorically non-insurable in mainstream finance. See also: Why Insurers Caught the Blockchain Bug   “Extralegal” refers to a condition where something is neither legal nor illegal. Economist Hernando De Soto writes about how the extralegal sector in many parts of the world grossly inhibits economic growth because people are unable to secure “title” to property and businesses they create. They are unable to bridge the capitalization gap — that is, the ability to borrow against tangible assets or future returns. Blockchain technology appears to be languishing in the extralegal domain as courts and governments have few uniform ideas about how and where this tech fits in society -- that is, until something goes wrong, such as a major hack where important people lose a lot of money. Only then will some patchwork of blanket legislation likely emerge that favors those of one sector over another. The running joke in crypto-space is that any effort to control blockchain technology would negate any benefits of having it one in the first place. A Third Option The CIPR/NAIC article raises the possibility that the pairing of blockchain technology with professional engineers (as the decentralized adjudicators of smart contracts) would achieve a state of insurability and thus bridge the capitalization gap required for mainstream financing of blockchain enterprise. This arrangement applies primarily to basic infrastructure and derivatives of basic infrastructure, which may not actually be a bad thing at all. See also: What Is and What Isn’t a Blockchain?   The Critical Path The Earth is currently an epic case study in deferred maintenance. There are very real and serious global problems that affect every living creature that we need to attend to immediately. Critical path methodology is a technique familiar to all builders as a set of instructions specifying where one action must precede the next for subsequent actions to occur. Millions of business plans that provide basic human needs and protect our natural resources and that are currently unprofitable will suddenly become hugely profitable. These outcomes could be accomplished with the recommendations provided within the CIPR/NAIC article. Please read this article and forward it to others who are interested in this technology. There is very real value to be released and money to be made in the next economic paradigm that is currently at our fingertips. All we need to do is align insurance with engineering on a shared database.

Overview Connected companies are organizations that move away from traditional hierarchies to embrace communities of employees that reach across departments and geographies. By implementing innovative technology solutions and designing workspaces that remove bottlenecks to collaboration, these companies are building smarter and more productive teams, increasing talent retention and creating a more satisfying work experience for their employees. Within an organization, such networks can lead to innovation and competitive advantage. Mapping these communities reveals that the amount of knowledge and information that flows through them far outweighs what is available through traditional organizational hierarchies and silos. The challenge for many large companies today — particularly at a time when consumers are more demanding in the services and support they seek — is to find ways to channel the power of such informal networks to fuel growth and revenue and to better serve their customers. In-Depth Businesses, both large and small, are typically organized by department. Within these formal structures, dozens of informal, shared-interest communities develop — either intentionally to enable collaboration across teams, or organically by employees through their shared interests. Increasingly, it is through these often-invisible networks that work actually gets done in today’s knowledge-intensive companies. As ideas are shared — whether through instant messaging, collaboration tools, intranets or digital social networking platforms — extracting the value within these networks has never been more important – or, if implemented effectively, easy. Perhaps the biggest barriers to harnessing the power of these peer groups are the formal hierarchies, matrices and organizational charts that overlay them. These formal structures tend to downplay the power of informal relationships and the ideas and innovation that are their byproducts. As executive leadership teams contemplate ways to boost the value of these networks, they should consider implementing both technological and structural changes. The idea is to encourage goal-oriented collaboration, create pathways to forging value-creating informal connections and remove bottlenecks to networking across business functions. Addressing the Needs of an Evolving Workforce Changing workforce demographics are forcing organizations to rethink talent management. For example, the impending retirement of baby boomers means companies could face a serious talent shortage and loss of important institutional knowledge. The new workplace imperative is to accommodate the needs of all employees, ensuring they can share information and knowledge effectively. With various skills in short supply, some businesses are increasingly hiring outside their traditional geographic regions to attract and retain top talent, creating a more distributed workforce. As a result, companies are retooling their knowledge-sharing technology to support remote employees. Flexible working programs are forcing executives to rethink corporate real estate and space planning. Should virtual workers be entitled to office space? What workspace designs and technology are necessary to support office workers collaborating with their virtual counterparts? Similarly, many employees want stronger and deeper connections with each other and their leadership, and they are looking for more instantaneous feedback on their work instead of the traditional employee review. Maximizing the Benefits of Instant Feedback “Today’s business environment is real-time,” says Teryluz Andreu, U.S. engagement leader at Aon Hewitt. “Customers act and interact with the swipe of a screen and a click of a button. Data is available immediately, and, increasingly, today’s customer expects instant results.” Employees are no different. “Millennials, in particular, are looking for continuous feedback loops to improve their daily work — not after long, sometimes rather complex, process and formal surveys,” Andreu says. This feedback from employees is essential for the organization to analyze and act upon. Research has shown that employees want organizations to encourage them to speak up, actively solicit their feedback and encourage conversations across the business. Making Informal Networks Formal To help address these emerging needs and maximize the opportunities they present, businesses with entrenched hierarchical structures could consider introducing flatter structures that encourage collaboration, similar to those popularized by startup culture. Rather than completely restructure, businesses can explore designing and supporting informal networks around ad hoc peer groups. These can be designed to focus on a specific work area of mutual self-interest, bringing more diverse perspectives to problems and unlocking enormous value at low cost. Before undertaking such an effort, leaders need to very clearly understand the objectives and the outcomes you are trying to drive in your company and (with) your colleagues,. Just as formal hierarchical structures have defined management roles, employee networks should have defined collaborative roles. These connected communities benefit from designated group owners and “knowledge managers.” In this way, networks can support the creation of small, focused communities of interest within larger communities — for example, sub-communities focused on the different industries within healthcare, such as pharmaceutical and medical devices. By participating in these smaller communities, talented workers gain access to knowledge across the company. A person in the medical devices community could also be a member of a marketing community, helping both groups better understand the needs of the other. Carrying out analysis of existing communities by working through influential employees who are already connected with them can help companies formalize networks. This can often make collaboration more efficient and secure buy-in from existing members. These individuals also tend to have a strong perspective on which people from disparate functions, locations or groups can add the most value. Learning How to Listen A critical factor in formalizing employee networks is ensuring employees are engaged and empowered to participate. “Agile listening” encourages continuous conversations between employees and company leadership, often through technological solutions. These new types of feedback loops are often less cumbersome, intrusive and costly than their annual or semiannual survey counterparts, helping companies and employees put new ideas into practice quickly. “Creating networks and connections is a basic human need,” Andreu says. “Having issues addressed and feedback acted upon is essential to an individual’s engagement and work output. Organizations that listen and respond to their worker’s concerns satisfy the need of employees to feel connected to their organization and part of a larger community.” According to Andreu, one of the primary benefits of agile listening is the ability to act on feedback in real-time and to also help balance the onus of “employee engagement.” Instead of staff feeling employee engagement is only a result of what the organization does, these new tools can now help the individual to proactively improve their own engagement. “These personalized engagement reports for employees help address what they need to change about their own behavior to improve their engagement and, more importantly, what things they can change in the workplace to feel more connected,” Andreu says. From Connections to Collaboration To enable these connections and boost internal networks, businesses need to identify and implement the right mix of technological tools. Just as LinkedIn, Facebook and Twitter have changed the way individuals communicate, there is now an array of powerful and secure communications tools that allow for easy collaboration across time zones and from virtually any location. Internal social networks like Microsoft’s Yammer or Facebook for Business can also support the development of communities of interest within larger networks. Rather than searching for an answer or expert within a large and often cumbersome database, these tools allow employees to search for employees outside their direct groups based on expertise or skills. Companies can also establish a robust intranet or private website that is accessible by employees only. These are useful not only for publishing news and sharing essential company policies and updates, but they can also serve as a secure place in which to communicate in real time, improve collaboration, outline strategy and provide essential training. Rethinking Workspaces to Break Down Silos Beyond the business case, companies should have some sort of cultural readiness assessment in place because it is a (big) cultural change. Technology alone is often not enough to help bring about such changes. This is why, in addition to technology powering collaboration, structural changes to physical workspaces can help promote a more networked work environment. A well-designed workplace can catalyze the collaborative behaviors businesses want to promote, energize and motivate among workers. It’s essential to understand “people want to interact, socialize and play with each other at work,” says Lyle Sandler, head of technology, design and human experience at Aon. “But they find themselves sequestered to cubicles and windowless offices. Instead of interacting with humans, they are glued to computer screens and sometimes overly tied to technology instead of what is more natural to us: human interaction. The ‘agile workspace’ provides us with the opportunity to explore these natural human behaviors — behaviors that produce ideas and drive innovation.” Sandler also notes that well-designed agile workspaces can encourage “successful collisions.” A smart and thoughtful workplace design can “get people to literally bump in to each other, speak with others that one wouldn’t normally interact with and ask for help and perspectives from people with different backgrounds.” The Business Benefits of Collaboration Networks can generate significant value by activating talented employees and encouraging them to work together across the enterprise. The benefits of a networked approach can be substantial: smarter teams, improvements in workforce productivity, better customer service, product innovation, efficiency gains and reduced overheads. The connected company also constitutes a win for employees and a strong reason to join — or stay with — a company in an age of increasing competition for top talent. They can look forward to greater workplace flexibility, more engaged and satisfying experiences on the job and a culture of collaboration. All this can lead to better financial performance and better long-term prospects for the entire business. Talking Points “We are at an interesting inflection point — a time when many of the scenarios we have been talking about for a long time are almost becoming reality.” – Jackie Fenn, fellow emeritus in business innovation and emerging trends, Gartner “In a nutshell, collaboration tools eliminate silos — one of the biggest inhibitors to digital transformation today.” – Andy Litherland, VP of European channels, Avaya “When it comes to breaking down silos, I don’t think you’re ever really done. It’s something you work on every day and every year, by emphasizing that we’re all in this together.” – Pat Cunningham, director of aviation, Pepsico Further Reading

• Team Spirit: Businesses Are Embracing the Idea of Working in Teams. Managing Them Is Hard – The Economist, March 19, 2016
• A Managed Services Model for the Connected Workplace – Computer Weekly, March 17, 2016
• Could a Workplace Redesign Lead to Better Collaboration – TechTarget, March 31, 2016
• Social Networking Comes (at Last) to the Workplace – The Wall Street Journal, March 14, 2016
• What’s Next for Collaboration in the Workplace? – InformationAge, March 17, 2016

Across the developed world, leading businesses are facing new workforce productivity challenges. Many recent graduates lack the skills necessary to succeed in today’s quickly changing workplace, while economic uncertainty has forced many experienced workers to delay their retirement. Companies need to consider the impact of these trends and the ways they can differentiate themselves as they wage the battle to find and retain top talent.  

Winning the battle for talent is about more than compensation. To remain attractive to multiple generations of current and future employees, businesses are shifting their focus to a broader array of benefits. A healthy person at the beginning of a career, for example, is more likely to want flexible benefits that support an independent lifestyle. In contrast, a long-time employee who is nearing retirement is more likely to favor a more predictable structure weighted toward retirement savings.

The reality is that there will be five generations of employees sharing the workplace by 2020, and the best places to work will be defined by their ability to meet the increasingly diverse needs of their entire workforce. So what can employers do to ensure they are offering a competitive range of benefits that attract and retain the best talent?

In-Depth

Workplaces are evolving — and not always in ways that support business goals. Employee trust in employers is at an all-time low, according to the Aon Workforce Mindset Study, and one-third of employees are seeking to change jobs in the next year.

With populations aging and the pool of local, fresh talent stagnant, businesses can’t afford to ignore these realities. They need to develop innovative ways to attract and retain talent, including workplace flexibility, according to the Workforce Mindset Study. Benefits packages, in particular, stand out as one area that can be made more appealing.

Craig Dolezal, senior vice president of Aon, believes offering a wider range of benefit choices tailored to each generation’s needs can become an important differentiator for attracting and retaining this talent. One model that could become a powerful vehicle for achieving both of these aims is through what Dolezal calls “a total rewards exchange,” where an employee gets to create a benefits package, prioritizing compensation, bonuses, time off, medical, dental, wellness and child care (among other rewards).

Essentially, it’s like creating “a marketplace where people can make their own decisions about how they want to be compensated,” he says, “whether they want life insurance at this level or they’d rather have it in a sabbatical. It’s up to them to decide.”

Learning From Health Exchanges

Such an arrangement can appeal to prospective employees who desire greater individual control over their benefit options and care choices. But, according to the Workforce Mindset Study, employees also want to see more honesty and transparency from their leaders, which ranks as their top suggestion. Further, consistent with other aspects of their life, they expect to be able to access information on their benefits when and where they want.

Mike Christie, senior vice president, Exchange Market Strategy at Aon, says health exchanges, which are becoming popular in the U.S., represent a significant step in this direction. Private health exchanges are competitive marketplaces where consumers can shop across multiple products — often from multiple providers in an efficient manner. Their purpose is to combine cost-accountability with meaningful control over health benefits for individual employees. They also arm employees with information to make smart choices based on their health needs and tools to evaluate their options.

“What the health exchange does is in a very overt way show employees what the employer contribution allows you to purchase,” Christie says, so it brings more cost transparency about what the company’s contribution provides them.

New thinking about benefits

The high cost of health care in the U.S. is one of the key drivers of the private health care exchange market. But the U.S. experience with private health exchanges does have potential applications in other countries. Today’s workforce is more global and diverse than ever before. In almost every country in the world, there is a greater range of age groups, ethnicities and nationalities, as well as more women, more people working remotely and more hiring in other countries and time zones.

“Private exchanges give employees a wide range of options so they can decide which plan is best suited for them,” Christie says, and this has broad appeal in markets around the world.

In the competition for talent, businesses offering benefits that employees crave is only part of the challenge. Businesses should consider using a more consumer-driven benefits approach to create incentives for healthy behaviors and encourage people to make smarter choices about the health insurance, supplemental benefits and retirement products they need to prepare and protect themselves and their families for the future. For example, strong retirement packages might have greater appeal to people in their 60s than to people in their teens — and a working parent might prioritize child care, while someone just beginning a career could be interested in tuition reimbursement.

For many, a balance of reward options is a precondition for employment, and as the battle for talent becomes more competitive, perks such as travel vouchers and free lunches could become differentiators.

The Future of Employee Rewards?

At a time when skills shortages are on the increase globally and workforce demographics are changing, 70% of employers say they are going to be revising their total rewards strategy to accommodate the changing needs and demographics of their workforces in the next five years, according to the Aon 2015 Health Care Survey. Applying the health exchange approach to employee benefits could prove a valuable model for rethinking how to administer these benefits.

It can “take away a lot of the corporate decision making employers have to do when trying to choose the right plans,” Dolezal says, allowing organizations to focus their energies on value creation rather than administrative functions.

Employers can also find significant cost savings through this model because of the reduced in-house administrative burden. By giving employees more choice, an exchange-style approach answers the increasing demand for benefits flexibility from employees. By expanding this approach beyond healthcare to a fully flexible benefits offering, organizations can offer a rewards package that meets the needs of employees as individuals, rather than attempting a one-size-fits-all approach.

“We actually think that will be the next wave of innovation,” Dolezal says. “Moving beyond healthcare exchanges to total rewards marketplaces.”

Talking Points

“By shifting the role of the employer to that of financier/facilitator and empowering employers with a true consumerism model — one that brings together competition and consumerism, a private health exchange brings a host of incentives to bear to exert positive influence on the market, including reduced costs and higher consumer satisfaction.” – Private Health Exchanges and the Consumerism Movement, Aon Hewitt (White Paper)

“We’ve seen individuals move to plans that are close to what they’ve had in the year prior, however, there are individuals who increase coverage or try to secure lower premiums. The exchange model lets people decide which plans and which insurance companies are best suited for them and their situation.” – Mike Christie, senior vice president, Exchange Market Strategy, Aon

“We believe this new approach to medical coverage better meets the needs of our diverse workforce and provides our company with increased efficiencies in our health careofferings.” – Dean Carter, chief human resources officer of Sears Holdings

Further Reading

• XChanges Today: A Business Brief
• Aon 2015 Retiree Health Care Survey 
• Reshaping Retiree Health Care Through a Private Exchange Strategy

In a highly competitive market, every insurance document needs to engage the customer in a consistent way to ensure a positive customer experience. However, with the plethora of business correspondence that an insurance enterprise produces, many insurers have lost track of their document inventory — all of those policies, statements, invoices, proposals, letters and even marketing materials — that have been created over time and what those pieces actually say. Making sense and maintaining these large inventories of communications can be an overwhelming task. It’s a huge challenge to ensure you’re reflecting and reinforcing your company’s brand while also ensuring compliance with regulatory requirements. See also: Payoff From Great Customer Experience? Additionally, companies often go through ideation phases where they attempt to refresh a piece of correspondence and label it a “redesign.” That can be a misnomer, as a true redesign of a document needs to get beyond applying a new coat of paint (the look and feel). Your “redesigned” communications still need to ensure they are meaningful, comprehensible, targeted and personalized, and that’s exponentially more difficult to achieve the larger your inventory. Find the patterns So, if it isn’t a traditional redesign that will create more compelling, relevant communications, what will? The answer starts with identifying what content you need that you can share and re-use in a consistent way. Set a course streamlining and reducing your correspondence content down to core chunks — for example, minimal sets of paragraphs that might make up a letter or a set of letters in such a way that they become your kernels in the system. These kernels are your foundation, your building blocks that you define once with a common voice and tone and deploy consistently to elicit the expected response you hope to get from the recipient. The name for this process is “rationalization.” Rationalization also means taking a hard look at what we call “outlier bits of content,” things that might appear just once in 1,000 letters, and asking why that paragraph only appeared once; was it really a situation where this company needed to say this at all? Sometimes the answer is “yes,” sometimes “no.” See also: Tips on Improving the Customer Experience   As an engineer by training, I am intrigued by the concept of rationalizing content because it is really about applying the principles of pattern recognition. By finding meaningful patterns in content, you can reduce your communications inventory to the minimum set of content “chunks” required to efficiently produce the correspondence in a way that meets the vision you have for a better customer experience. It’s about more than replication; think about it as revitalization. It’s understanding your content puzzle pieces and having an intelligent way to assemble them to complete the communications picture. With rationalization in place, you can make communicating with customers easier — for them and for you.

In part one of this blog, we looked at the transformational changes insurers are facing and the need to build bridges between today’s world and the future. Now it’s time to look at “the hows” – How do you respond? … How do you set a call to build those bridges? … And how do you stay competitive in this new world? SMA recommends that insurers plan to bridge to the future, building in capabilities that will achieve near-term goals for improvement, while moving toward a Next-Gen Insurer model. The following seven suggestions should be part of your bridging strategy: Operationalize customer-centric strategies: Improving the customer experience has been the top strategic initiative for insurers in 2015 and 2016 and is sure to remain critical in the years to come. Emerging technologies and the increasingly connected world have a large impact on customer needs, behaviors and expectations. More than ever in this fast-moving age, listening to the customer and creating a customer-centric business will be key. Modernize core platforms: Technology systems for rating, policy administration, billing and claims are the hub of every insurance company. Many a company has discovered that legacy systems in these areas stand in the way of implementing new business strategies and seizing market opportunities. Modernizing those core platforms is a great place to start in the quest to become a Next-Gen Insurer and position for a changing world. See also: 4 Technology Trends to Watch for Build a flexible organization and workforce: Technology and process don’t improve by themselves. New business models, new ideas and ways to capitalize on emerging trends and technologies come from an organization and the people who are able to change. Culture, organizational structure, new roles and agile technology infrastructures are required as part of a comprehensive strategy to build an organization that can quickly and willingly respond to changes in the environment. Major in data and analytics: Every insurer needs to create an enterprise strategy to leverage their internal data assets and capitalize on more external data in the marketplace. At a minimum, the strategy should start with master data management and include a strong business intelligence foundation. Building skills and capabilities for more advanced analytics and big data should be on the road map, as well. Institutionalize innovation: Innovation is not a passing fad. The creative rethinking of the business is a requirement for success in a world that is transforming. But institutionalizing innovation means going beyond thinking or imagining new ways to do business and extends into operationalizing those ideas. Go digital: Most insurers have been on a digital journey for a long time, but in many cases it has been on a department-by-department, project-by-project basis. Now is the time to create a more comprehensive strategy to improve digital operations across all aspects of the business. There may still be a long way to go on this journey, but it is important to have an overarching strategy and framework. Keep your finger on the pulse of the emerging trends and technologies: Not all emerging technologies will require the attention of every insurer. But each insurer should identify those with the most potential impact for their own company; develop a plan to monitor them; and invest, experiment and incorporate elements into the strategy over time. SMA has created a Next-Gen Insurer framework that brings together all of these elements into a common vision to aid insurers as they prepare for future success. This framework has innovation at its core and includes four related elements:

1. Creating a strategic plan that starts with customers
2. Establishing capabilities to develop innovative products and services
3. Adapting and capitalizing on technologies and data
4. Implementing new and revised business models.

As insurers consider the impact of emerging technologies for their companies, the SMA Next-Gen Insurer Model helps in planning how to bridge from today’s business to the insurance business of tomorrow. See also: Next-Gen Analytics Drive Efficiency Bridging is so important to insurers today that is a major theme of the SMA Summit this September. Insurers recognize that timing is critical, and the exponential changes taking place now in technology will only increase. Finding ways to build those bridges between today and tomorrow is paramount. Change is here, and it’s not going away. Now is the time for insurers to prepare and execute plans to ensure their company’s future.

Overview Shifting demographics are starting to reshape the workforce. As baby boomers retire, in most developed markets there will simply be fewer people of working age to fill positions. Not only is the pool of locally available replacement talent shrinking, but competition for their talent is on the rise. The people shortage is exacerbated by the lack of growth in graduates with science, technology, engineering and math (STEM) degrees. This is happening at a time when, because of rapid advances in technology, the demand for these skills in the workplace is on the rise. At the same time, businesses are also finding that the leadership and experience of the baby boomers are being sorely missed. As they leave the workforce, baby boomers are taking decades of knowledge with them, while younger generations often have yet to build up the experience and leadership skills needed to maintain successful businesses. So how can businesses respond to this confluence of demographic and training challenges to avoid being hit hard by a skills shortage that could be even more pressing than the one the world is already facing? With an emerging challenge this great, this is not just an HR issue – it’s core to future business strategy. In-Depth How are business leaders coping with the rising demographic, technological and human resource challenges they face as experienced staff retire and new technologies disrupt industries and require new skillsets? The first step in addressing these challenges is to understand staffing as part of a holistic business strategy. Organizations need to identify the critical skills and roles needed to support overall goals and objectives and build a sustainable talent pipeline. Aligning talent strategy to business strategy in this time of rapid change requires taking a long-term view. It’s not just about hiring for the positions you need today but about identifying the critical skills needed to help your business adapt over the long term. How to Tackle an Emerging Talent Shortage At a time of increasing competition for qualified people, what many of the firms are focused on now is creating a culture that is attractive for people to join and stay with. With as many as a third of employees thinking about leaving their current job within a year, according to Aon’s latest Workforce Mindset Study, this isn’t just about attracting new staff — it could be about preventing existing employees from being lured away by a competitor. Both mature and fast-growing industries are focusing on developing a culture to help them compete for scarce talent and become more attractive to their current and future workforce. When it comes to culture, here are a few things organizations can do:

1. Develop leaders who are engaging and serve as role models — With corporate leaders increasingly high-profile (and with leaders as a top driver of employee engagement), select and develop people who can act as internal and external role models and create an environment in which people are appreciated and motivated.
2. Establish a clear employee value proposition — To stand out from the employer crowd, think about how to make your corporate culture feel more distinctive and attractive by offering support in career development and continual training, as well as competitive compensation and benefits.
3. Develop and articulate a sense of purpose — With workers increasingly wanting employment that means something beyond just making money, explaining what your business stands for can be a powerful tool to attract like-minded talent and drive long-term employee engagement.

In addition to culture-building, planning for tomorrow’s workforce is key. Talent shortages are likely to remain a feature for years to come. Ensure your business has the qualified staff and skill sets needed by adopting a long-term program for attracting, training and developing the people who will drive its success over the long term — not just for this year’s needs, but for five to 10 years. There are a few things organizations should consider doing to help with their long-term talent needs:

1. Establish apprenticeships — Not only does on-the-job training help you cultivate the skills your business will need, it can help promote loyalty and long-term engagement. With training and career development opportunities as strong pull factors for modern workers — especially from younger generations. Making training a continuing part of your business from the early stages of employees’ careers can be a powerful proof point in your commitment to employee development.
2. Work with schools — Encourage changes in the educational system that support the development of needed skill sets in the long term. Ensure students are made aware of career opportunities in your industry and of the true value and potential a career with your organization can bring.
3. Commit to workforce diversity — Women and minorities still have significant under-representation within the managerial ranks of many industries. Organizations should be reaching out to qualified minorities, not just because practicing equality in the workplace reaffirms your business’ commitment to fairness, but because diverse workforces are a proven driver of innovation. Not only have organizations with greater gender equality proven to perform better, but being seen as promoting gender equality in the workplace can be a powerful attractor for talent.
4. Globalize your hiring — Developing countries around the world are producing well-qualified staffing for accounting, data analysis and other financial services, while in healthcare a majority of newly qualified healthcare professionals (including nurses and general practitioners) are graduating from schools in these countries. In a globalized world, the competition for talent is also increasingly global, so you increasingly need to look where the talent is, not just where you would like it to be.

Talking Points “Rather than focusing on salaries alone as the cure-all for attracting employees, corporations would be wise to look closely at the wider expectations and demands of their candidates, if they are to draw in the best talent. … While increasing the flexibility of the job offer can provide an effective short-term solution to draw in the best candidates, ultimately even these measures won’t resolve systemic talent gaps that have a significant impact on the long-term health of the business.” – Tara Sinclair, chief economist, Indeed “The struggle to fill vacancies is holding back growth and opportunities for business, and it is essential that both government and industry work together quickly to identify ways to plug this gap.” – Mike Hawes, chief executive, Society of Motor Manufacturers & Traders “Companies looking for sophisticated skillsets are starting to look to foster skills and relationships with future employees among high school age students.… If you’re not already thinking five to ten years ahead for your talent needs, you need to.” – Usha Mirchandani, partner, talent analytics, Aon Hewitt Further Reading

• Companies Struggle to Fill Quarter of Skilled Job Vacancies – Financial Times, Jan. 28, 2016
• How to Find the Right People in a Skills Shortage Sector – Talk Business, March 11, 2016
• The War for Tech Talent Escalates – Boston Globe, Feb. 19, 2016
• Talent Challenges in Times of Disruption – FinTech Innovation, March 28, 2016
• Workforce Mindset Study – Aon report

When it comes to driverless cars, I argue in a recent article, the appropriate first-mover unit of innovation is not the car, or even the car company. It is the nation. That’s because further development and deployment of this technology is now very much dependent on a tangled web of competitive, policy, regulatory, licensing and other hurdles that span local, regional and national regulatory bodies and entrenched interests. Thus, in the U.S., sorting out how to test and deploy driverless cars is a muddled mess. See also: 7 Wonders of the Driverless Future Singapore, on the other hand, is fertile ground for this innovation. As an island nation, its urban density and finite space make it particularly sensitive to traffic congestion and land use. Roads consume more than 12% of the island’s area. Its aging population and limited workforce of potential professional drivers makes mobility for non-drivers an urgent policy imperative. Today, Singapore imports half of its bus drivers from other countries. Its environmental conditions — modern infrastructure, flat terrain, warm weather (no snow or ice) and well-marked roads — simplify the introduction of driverless cars. Finally, the nation’s strategic focus on fostering a high-tech, knowledge-based economy makes it unusually open to driverless-car innovation, and its tight-knit, efficiency-oriented government makes it easier to manage regulatory constraints. Singapore also has a long history of public and private support for driverless-car research, development and testing. An area of the island center is currently open to real-world testing, and plans are in place for eventually opening up the entire island to driverless cars. A small company called nuTonomy is partnering with Singapore to turn those plans into reality. nuTonomy is based in Cambridge, Mass., near its academic roots. But its cofounders, CEO Karl Iagnemma and Chief Technology Officer Emilio Frazzoli, are MIT roboticists with a rich history of research in Singapore. nuTonomy, therefore, has its commercial sights  focused squarely on Singapore. See also: Is Driverless Moving Too Fast?   Iagnemma told me of his ambitious plans, including a major demonstration in 2016. He envisions building a fleet of fewer than 100 cars for the first operational pilots, then launching expanded and more sophisticated pilots and ultimately creating a “radical expansion” to launch the world’s first commercial driverless taxi service. He has set his sights on Singapore. Read the full story about nuTonomy’s ambitious approach and the potential rewards for Singapore for being a first-mover nation in driverless cars.

The proposed workers' compensation opt-out legislation in South Carolina and Tennessee, coupled with the recent challenge to the Oklahoma opt-out statute’s constitutionality, has spawned many recent articles, publications and commentaries regarding legislation allowing employers to “opt out” of state-governed workers’ compensation insurance programs and become “nonsubscribers.” Most of these articles have attacked the nonsubscriber option as pro-employer and anti-employee. Interestingly, however, when the Texas Department of Insurance (TDI) last investigated the satisfaction levels of injured workers employed by nonsubscribing companies, those studies showed that employees of nonsubscribers were generally satisfied with their treatment post injury, making nonsubscription a win/win for both employer and employee. Indeed, there are lots of reasons why employees like working for nonsubscribers: 1. Nonsubscribers Provide Enhanced Safety. Nonsubscribing employers tend to provide safer workplaces overall. Why? Because their claim costs directly correlate to claim frequency and severity. Consequently, improved safety, with the resultant decline in claims and severe injuries, is in nonsubscribers’ best interest. In her recent comprehensive study of nonsubscription, Stanford Professor Alison Morantz observed this phenomenon. Morantz studied 15 large multistate firms, analyzing and comparing data relating to their nonsubscriber claims in Texas and their workers’ compensation claims in other states. She found “strong evidence” that nonsubscription creates a “real safety effect,” because “[n]onsubscribers are, at least in theory, internalizing all of the costs associated with workplace accidents (including tort liability), which should induce them to invest more in safety-enhancing technologies.” She based this conclusion on the “sizable and statistically significant decline” in the claim frequency of severe, traumatic injuries. See also: Even More Tips for Building a Workers Compensation Medical Provider "A" Team   Steve Weatherford, vice president of finance and human resources at Daryl Flood Relocation (a Mayflower Transit agent), explained how safety is an integral part of Daryl Flood’s nonsubscription program: “The key ingredients to a successful non-subscriber program are an effective safety program (prevention); employee acceptance of the benefit of early reporting (early treatment); a quality medical network (effective treatment); and a proactive light duty program (restoration to employment).” He explained that “[t]he investment in these ingredients results in higher employee satisfaction; lower frequency of injuries; lower costs per injury; and a quicker return-to-work rate.” Because of its focus on these key ingredients, and notwithstanding the physically demanding nature of the employees’ work, Daryl Flood has gone more than four years without an employee missing a day of work due to a work-related injury. 2. Nonsubscribers Provide Enhanced Access to Quality Medical Care. The Texas workers’ compensation system can actually impede an employee’s access to quality medical care. Texas workers’ compensation laws cap the amounts that doctors can charge when treating injured workers receiving workers’ compensation benefits. As a result, many prominent doctors refuse to treat patients under the workers’ compensation system. Nonsubscribing employers, on the other hand, have the freedom to negotiate fees with medical providers, and they take advantage of this opportunity to enlist the most highly regarded specialists in many fields. “We search for and use credentialed doctors and strive to use only board-certified specialists,” says Jim Dickinson, Kroger’s claim manager, who helped roll out Kroger’s nonsubscription program in 1992. “And since we are not bound by workers’ compensation protocols, we are able to help associates who are in pain by expediting the treatment and testing they need.” 3. Nonsubscribers Provide Enhanced Benefits. The vast majority of the employees covered by occupational injury benefit plans receive benefits that are more generous than their workers’ compensation counterpart. For example, many nonsubscriber benefit plans provide wage-replacement benefits on the first day of missed work. Employees whose injuries are processed through the Texas workers’ compensation system, on the other hand, do not begin receiving wage-replacement benefits until the eighth day away from the job. Additionally, nonsubscriber benefit plans typically pay 85% to 100% of lost wages with no weekly caps, whereas an injured worker employed by a subscriber to the Texas workers’ compensation system is only reimbursed 70% to 75% of lost wages, with caps based on the state’s average weekly wage. United Supermarkets, for example, pays 90% of the injured employee’s wages beginning the first day of missed work, and it does not set a ceiling for the maximum amount of a weekly paycheck. In addition, most nonsubscribers allow their injured workers to make their usual deductions from their paychecks, such as deductions for group-health insurance premiums—an option not available under workers’ compensation. See also: How Should Workers’ Compensation Evolve?   Statistically, these differences are significant, because most claims involve minor injuries with little missed work. Workers who suffer minor injuries and are out of work between one day and one week under the state compensation system receive no lost wages, whereas workers employed by nonsubscribers with benefit plans typically start receiving lost-income benefits immediately. Professor Morantz wrote about this benefit to workers in her article: “Some ubiquitous features of private plans—such as first-day coverage of lost earnings and wage replacement rates that are not capped by the [state’s] average weekly wage—are more favorable to injured workers than workers’ compensation.” 4. Both Nonsubscribing Employers and Their Employees Are Satisfied With Their Treatment Following On-the-Job Injuries. For these and other reasons, “injured workers employed by nonsubscribers are generally satisfied with their post-injury treatment.” Indeed, in 1997, the last time that TDI studied the satisfaction rates of nonsubscribers’ employees, the study “revealed that worker satisfaction with employer treatment, medical coverage and income benefits paid during recovery was relatively high.” Nonsubscribing employers’ satisfaction levels are likewise high.  In TDI’s 2014 study on nosubscription, the department found higher satisfaction rates for nonsubscribers – 67% overall – than for subscribers – 61% overall.  Historically, researchers have found the gap to be logical: “Differences in satisfaction levels observed between subscribers and nonsubscribers are not surprising since employers who have made a conscious decision to opt out of the WC system may feel a stronger sense of ownership over their alternative occupational benefits program than subscribers do about the statutorily based WC system. Thus, higher overall satisfaction levels, as well as a greater degree of satisfaction with specific aspects of their programs, can be reasonably expected from firms that choose to opt out of the system.” And while there will always be employees who are dissatisfied or mistreated under any system—whether employed by a subscriber or nonsubscriber to workers’ compensation—many employees sing the praises of nonsubscription. Paul Philley, for example, describes his favorable experience following a workplace injury at Kroger: “They got right on it, and the treatment was excellent,” he said in a telephone interview. Philley, a 36-year-old produce employee with Kroger, suffered a severe cut to his finger when a baler door slammed closed on it. In previous years, he suffered several hernias, which he also treated through Kroger’s nonsubscription plan. “I give Kroger 100 percent A’s,” he said. “They went by the book and took care of me each time.” He confirmed that he never had to pay a penny for his medical care out of his own pocket. 5. The Most Criticized Features of Nonsubscribers’ Plans Have Little Impact in Real Life. Four of the features of nonsubscriber plans that are most criticized have very little impact on workers as a whole: non-coverage of permanent partial disabilities, capped benefits, lack of chiropractic care and categorical exclusion of some diseases and non-traumatic injuries. Professor Morantz’s study concluded “that even in combination, these four plan features account for relatively little of the cost savings.” As Morantz explained, “The impact of these plan features on total savings looks much smaller than I expected.” These headline-grabbing provisions affect only a very small percentage of injured workers. 6. Nonsubscription Is a Win/Win for Employers and Employees. While many organizations and lobby groups representing workers’ compensation insurers and plaintiffs’ attorneys spout unsupported criticisms of nonsubscription, the only objectively researched and published data shows that nonsubscription works, both for employers and employees. The ability to opt-out was a key component of the Texas workers’ compensation system as it was initially crafted in 1913, and nonsubscribers’ treatment of their injured workers has only improved since then. See also: Five Workers’ Compensation Myths   Most employers—whether subscribers or not—genuinely care about their employees and want to treat them right. Nonsubscription is an alternative way for employers to provide for their employees, and a way to get them better care, faster, so they can return to work sooner. The truth is, nonsubscription works, and it’s a win/win for both employees and responsible nonsubscribing employers.

Overview Your data might not be as safe as you think it is — and it could cost you dearly. Part of the threat comes, unwittingly, from your employees — and, possibly, even yourself. A significant proportion of cyber breaches (as many as 30%)­ are caused by “negligence or mistakes,” caused by individuals failing to act responsibly or follow procedure. Two decades after the launch of the web, digital has become so ingrained in our lives that it’s easy to assume you know the best security practices to keep you and your organization safe from a data breach. But as technology continues to drive changes in the way we live and work and as the Internet of Things becomes more omnipresent, the digital risks we all face are only going to increase as more and more devices share data around the world. Read on for some simple steps you can take to help keep your data more secure. In-Depth A growing threat, but an inadequate response The number and potential severity of cyber breaches is increasing. A recent PwC survey found that nearly 90% of large organizations suffered a cyber security breach in 2015, up from 81% in 2014; the average cost of these breaches more than doubled year-on-year. With more connected devices than ever before — and the total expected to reach 50 billion by 2020 — there are more potential targets for attackers, as well as more potential for accidental breaches. What’s more, as of late 2015, companies are, for the first time, listing their information assets as nearly as valuable as their physical assets, according to the2015 Ponemon Global Cyber Impact Report survey, sponsored by Aon. So how do you keep your organization’s data — and that of your clients and customers — safe? According to Aon cyber insurance expert Stephanie Snyder Tomlinson, it’s not just a matter of investing in better technology and more robust systems. “A lot of companies find that the weakest link is their employees,” Snyder Tomlinson says. “You need to train employees to make sure that if they get a phishing email, they’re not going to click on the link; that they don’t have a Post-it note right next to their monitor with all of their passwords on it. It’s the human error factor that companies really need to take a good hard look at.” From intern to CEO: Simple steps everyone can take It’s easy for individuals to become complacent about data security, says Brad Bryant, Aon’s global chief privacy officer. But with cyber threats increasing, it’s more important than ever to be aware of the seemingly innocent individual actions that can potentially lead to serious cost and reputational consequences for your organization. According to Bryant, there are four key things everyone can do to help protect themselves and their organizations from the rising cyber threat:

• Be alert to impersonators— Hackers are becoming increasingly sophisticated at tricking people into giving away sensitive information, from phishing to social engineering fraud. You need to be more vigilant than ever when transmitting information. Are you certain they are who they say they are?
• Don’t overshare— If you give out details about your personal life, hackers may be able to use the data to build a profile to access your or your company’s information. From birthdays to addresses, small details build up.
• Safely dispose of personal information— A surprising amount of information can be retained by devices even after wiping hard drives or performing factory resets. To be certain your information is destroyed, you may need to seek expert advice or device-specific instructions.
• Encrypt your data— Keeping your software up-to-date and password protecting your devices may not be enough to stop hackers should those devices fall into the wrong hands. The more security the better, and, with the growing threat, encryption should be regarded as essential.

Key approaches for organizations to better protect data To protect your and your customers’ and clients’ information, investing in better cyber security is only one element. But data breaches don’t just happen through hacks, or even employee errors. At least 35% of cyber breaches happen because of system or business process failures, so it’s vital to get the basics right. Prevention is key, says Tom Fitzgerald, CEO of Aon Risk Solutions’ U.S. retail operations. There are four key strategies he recommends all organizations should pursue to limit the risk and make sure they’re getting the basics right:

• Build awareness— Educate employees on what social engineering fraud is, especially in your financial department. Remind employees to be careful about what they post on social media and to be discreet at all times with respect to business-related information.
• Be cautious— Always verify the authenticity of requests for changes in money-related instructions and double-check with the client or customer. Do not click on random hyperlinks without confirming their origin or destination.
• Be organized— Develop a list of pre-approved vendors, and ensure employees are aware. Review and customize crime insurance. When it comes to coverage or denial, the devil is in the details.
• Develop a system— Institute a password procedure to verify the authenticity of any wire transfer requests and always verify the validity of an incoming email/phone call from a purported senior officer. Consider sending sample phishing emails to employees to test their awareness and measure improvements over time.

Much of this advice is not new — but the scale of the threat is increasing, making following it more important than ever. “Social engineering fraud is one of the greatest security threats companies can encounter today,” Fitzgerald warns. “This is when hackers trick an employee into breaking an organization’s normal digital and physical security procedures to access money or sensitive information. It can take many forms, from phishing for passwords with deceptive emails or websites to impersonating an IT engineer, to baiting with a USB drive.” How governments are driving data protection The potential consequences of inadequate data security are becoming more serious as courts and regulators are focusing on this issue globally. The EU is considering a data protection directive to replace previous regulations implemented in 1995. The expected result will be a measure that focuses on protection of customer data. Similarly, an October 2015 ruling by the European Court of Justice highlighted the transfer of customer data between the E.U. and the U.S. “Regardless of where a company is located, the provision of services to E.U. customers and the collection or mere receipt of personal data from European citizens may potentially subject companies to E.U. jurisdiction,” Bryant warns. “Failure to comply could present unprecedented risk for companies, including fines of up to 4% of a company’s total global income.” It’s not just changing E.U. rules that could affect your business. Internet jurisdictions and organizational operations are increasingly becoming cross-border. This global patchwork of internet rules and regulations is why only 24% of cyber and enterprise risk professionals are fully aware of the possible consequences of a data breach or security exploit in countries outside their home base of operations. Why getting the basics right is critical As the Internet of Things continues to grow, the number and range of potential targets for cyber attack is only going to increase. While eliminating all cyber risk may be impossible, getting the basics right is becoming more important than ever. “Given the large scope and impact of the various changes in data protection law, coupled with the drastic increase in fines, becoming educated on how to protect our data is more business-critical now than ever before,” Bryant says. Talking Points “The average cost per user of a data breach is now $240… The costs are costly, but the current model of privacy will not make sense going forward.… The Snowden revelations advanced hope that there would be this really excited response that would get government to impose really strict regulations. There was some posturing made, and it seemed like we were heading in that direction, but I don’t think we are going there.” – Lawrence Lessig, Roy L. Furman Professor of Law, Harvard Law School “A step change in sanctions will make privacy a board-level issue. Some businesses will need to start taking these issues a lot more seriously.” – Tanguy Van Overstraeten, Linklaters “The digital future of Europe can only be built on trust. With solid common standards for data protection, people can be sure they are in control of their personal information.” – Andrus Ansip, Vice President for the E.U. Digital Single Market Further Reading

• 2016 Privacy Forecast: Cloudy, With a Strong Chance of Regulation – Bloomberg BNA, Jan. 6, 2016
• Tech Privacy Policies Need an Overhaul, Regulators Say – CNET, Jan. 7, 2016
• How to Prepare Your Company for EU Data Protection Reform – TechWeek Europe, Jan. 2, 2016
• E.U. Data-Privacy Law Raises Daunting Prospects for U.S. Companies – Wall Street Journal, Dec. 16, 2015
• Privacy Can No Longer Be a Low-Level, Box-Checking Exercise – Irish Times, Dec. 31, 2015
• Social Media: The Challenges of Risk and Governance – Forbes, Jan. 5, 2016
• Essential Guide: E.U. Data Protection Regulation – ComputerWeekly
• Lessons Uncovered: The New Role of Data Privacy In Outsourcing – Aon.com
• 2015 Ponemon Global Cyber Impact Report – Aon.com

Employers looking to dial up the correct mix of benefits to retain valued employees are increasingly including identity theft protection services as a perk. Research firm Willis Towers Watson predicts identity theft protection, offered by 35% of employers in 2015, could double to nearly 70% by 2018, making it the fastest-growing type of employee benefit over the next couple of years. See also: Identity Theft Can Be Double Whammy   ThirdCertainty recently sat down with Joel Ray, the CEO of New Benefits, a Dallas-based employee benefits solutions provider, to discuss the drivers — and the arc — of this trend. The following text has been edited for clarity and length: 3C: Identity theft has become part of the lexicon of the world we now live in. Ray: With all the hacking of corporations, health plans and government, there is a myriad of ways people can get their identities stolen and misused, whether it’s medical fraud, tax return fraud, stealing a Social Security number or a credit card information scam. To me, not protecting yourself with an identity theft protection service is commensurate with not locking your door and setting an alarm when leaving home or not buying life insurance to protect your family. It just makes all the sense in the world, when you have the ability and a product is available to address identity theft, to include this as an employee benefit. 3C: So how do employers view this? Ray: Employers were the first ones decades ago to offer health insurance to their employees, and early adopters have added other types of benefits over the years. The idea, of course, is to attract and retain good people . … Research shows an employee’s financial health is every bit as important as physical and mental health. If anything goes wrong (financially), they are not going to be a productive worker. Meanwhile, identity theft happens every two seconds in the U.S. to quite a large number of Americans. So, identity theft protection is something that, in today’s digital world, makes perfect sense to provide employees, either on an employer-paid or payroll deduction basis. 3C: How much of a challenge is public awareness? Ray: The hard part is the education. Yet the almost daily reports about breach events have gotten employers more interested. We’ve had many (benefits) brokers representing our products say that, for the first time, employers are asking for identity theft protection. It really is the brokers in today’s world who act as consultants regarding the latest and greatest new products. And, typically, identity theft is toward the top of the list — if not at the top of the list. See also: ID Theft: A Danger Even After Death   3C: How does improved productivity factor in? Ray: Identity theft protection is like any other benefit. Basically, anything you can do to provide financial security to your employee is a good thing. It’s a primary reason employers provide 401Ks. A lot of voluntary benefits, like cancer disability, critical illness and dental, charge a lot more for family coverage. This one charges a little bit more, but you get financial security and protection, not only for the employee but for the entire family, as well. It’s a very inexpensive benefit relative to the protection it offers, and I think it will become a staple of the industry in the very near future. The early adopters who provide this benefit to their clients now are going to have market advantage over those who wait. 3C: Sort of like supplying peace of mind as a benefit? Ray: Yes. For example, employees buy life insurance for peace of mind so the family is protected in case of an untimely death. With identity theft protection, employees and their families are protected from something that happens every day from thieves who always seem to be one step ahead and out of reach from the law. If you’re an employer, wouldn’t you rather offer your employees a benefit that will meaningfully protect them from financial harm versus other benefits that, based on the historical record, may not add any real value? More stories related to identity theft insurance: As threats multiply, cyber insurance and tech security industries start to merge Cyber insurance industry could face turf war, report warns NAIC sets model standard for consumer rights, cybersecurity This article originally appeared on ThirdCertainty.