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The Stubborn Myths About Older Workers

When it comes to retirement, a significant cultural and demographic trend is taking place. Twenty-five years ago, only about one worker in 10 planned to stay in the workforce beyond age 65. Today, that number has risen to more than 50%. In fact, according to the 16th annual Transamerica retirement survey, 82% of 60-somethings expect to work or are already working past age 65.

Today’s boomers are not ready to stop working. They are better-educated, more physically fit than their parents and perhaps not as financially comfortable as they’d like to be. In short, they are defying stereotypes about an aging workforce and redefining retirement.

It’s not strictly a financial matter. “Money and access to healthcare are of considerable importance,” reports the AARP Public Policy Institute, “but so are the desires to remain active, make a contribution and maintain social relationships at work. Furthermore, these workers often enjoy what they are doing.”

Boomers are still working today at ages when their parents and grandparents had retired. This is particularly true in a service industry like insurance where physical strength is not an issue. Think of today’s 65-year-old worker as yesterday’s 50-year-old worker.

What is surprising is that few insurance firms have adapted to this new trend or have put policies and practices in place to accommodate today’s retirement reality.

Yet, when asked to name their greatest challenges, many insurance firms concede that finding and keeping qualified staff is at the top of their list and state that the loss of talented and experienced older workers is a key concern. This issue is further confirmed by the accounting firm PwC’s report that concludes the industry faces “a potentially massive loss of skilled, knowledgeable workers” as large numbers of older insurance workers approach their traditional retirement dates. The report notes that hiring millennials is only part of the solution and does not adequately address the transfer-of-knowledge issue.

See also: Why Are We Still Just Talking Diversity?  

Perhaps it isn’t so surprising after all. There remains a litany of stereotypes and negative perceptions to explain why firms tend to reject older workers, including:

  • Hiring managers tend to see older workers as more likely to be burned out, slow to accept or adapt to new technologies, more likely to miss work due to illness and poor at working with younger workers, especially younger supervisors; and
  • Many assume older workers are less creative, less productive, slower mentally and more expensive to employ than their millennial counterparts.

But current research negates these stereotypes:

  • According to a study this spring prepared by Aon Hewitt for AARP, “workers aged 50-plus can help employers address current and future talent shortages.” AARP and others have long argued that older workers are reliable, flexible and experienced and possess valuable institutional knowledge.
  • Writing in the AARP Bulletin on “The Value of Older Workers,” T.R. Reid reminds us that hiring skilled, vintage workers can be “a boon to employers, a boost for the U.S. economy and a bonus for the workers. For employers, the ‘unretired’ provide a pool of experienced labor that has proved to be productive, dedicated and loyal.”
  • One of last year’s blockbuster movies, The Intern, took notice of boomers reentering the workforce. Robert DeNiro played a septuagenarian whose experience and life skills help turn around the business run by the wonder-kid played by Anne Hathaway. His character pinpoints the reasons employers should want an older worker: “I’ve always been a company man,” he declares. “I’m loyal, I’m trustworthy and I’m calm in a crisis.”

Researchers at the University of Kentucky surveyed large and small companies to assess how employers evaluate their older workers. They uncovered seven perceived benefits of hiring older workers:

  1. Dedication to the organization
  2. Customer-service orientation
  3. Dependability
  4. High productivity
  5. Life experiences
  6. Strong work ethic
  7. Institutional knowledge

When it comes to actual job performance, Peter Cappelli, a management professor at the Wharton School of Business, is quoted in the AARP article, “The Surprising Truth about Older Workers,” as observing that older workers outperform their younger peers. “Every aspect of job performance gets better as we age,” he says. “I thought the picture might be more mixed, but it isn’t. The juxtaposition between the superior performance of older workers and the discrimination against them in the workplace just really makes no sense.”

Nathaniel Reade summarized Cappelli’s findings: “Older workers tend to be motivated by causes like community, mission and a chance to make the world a better place; younger workers are more driven by factors that directly benefit themselves, such as money and promotions. But perhaps the greatest asset older workers bring is experience — their workplace wisdom. They’ve learned how to get along with people, solve problems without drama and call for help when necessary.”

In a Sept. 18, 2015, U.S. News and World Report article, “5 Reasons Employers Should Hire More Workers Over Age 50,” Maryalene LaPonise suggests we “forget the myth that older workers are outdated and expensive. The best are loyal and competent and may even help a business’s bottom line.” She sees their experience, confidence, “relatability,” loyalty and ability to save companies money as the key reasons to hire older workers.

In a Brookings blog, World Bank economists Wolfgang Fengler and Johannes Koettl write, “A binary system of working 100% until retirement and then suddenly moving to 0% at an arbitrary age of around 65 is one of the great anachronisms of today’s labor market.” They argue the whole idea of a “retirement age” should be retired.

See also: How Should Workers’ Compensation Evolve?  

At WAHVE, we agree in the power and performance of experienced workers. It is clear that the attitudes of insurance firms toward older workers need to be reset. For our part, WAHVE is helping reimagine both staffing and retirement in the insurance industry and bridges the gap between insurance firms’ staffing needs and seasoned professionals’ “work-life” balance preferences as they phase into retirement.

An Opportunity in Resilience Analytics?

In my post last month, I discussed why the insurtech revolution should be focusing more on addressing the protection gap, thereby growing the pool of insurable risks, rather than figuring out how best to eat the insurance incumbents’ lunch.

At a conference in February, Tom Bolt of Lloyd’s noted that an increase of 1% in insurance penetration can lead to a 13% drop in uninsured losses and a 22% drop in taxpayers’ share of the loss. The key to increasing penetration is lowering distribution costs to make products more affordable. That is where insurtech can come in. Many recent startups have business models looking to tackle the excessive intermediation costs that exist in the current insurance value chain.

Sadly, when a catastrophe strikes areas of low insurance penetration, those communities not only suffer from the difficulties of having to seek aid—which can take three-plus months to reach affected zones—but also face the prospect of a significant drag to economic growth. It is unsurprising, therefore, that governments in vulnerable countries are keen to improve their “resilience” and seek solutions to better prepare themselves for catastrophes by working with the likes of the World Bank, the UN and the recently established Insurance Development Forum (IDF). Interestingly, AIR Worldwide announced recently the Global Resilience Practice, which will be led by former U.S. presidential adviser Dr. Daniel Kaniewski.

See also: InsurTech Need Not Be a Zero-Sum Game  

As well as providing low-cost distribution models in new markets, a related opportunity I see for insurtech is working together with the insurance industry in the growing field of resilience analytics. As Robert Muir-Wood recently pointed out on RMS’ blog, the claims data gathered by insurers — which historically has been used for the pricing and managing of risk — have the potential to also be used to reduce the potential for damage before the event. Insurtech companies could work with government authorities to pool this claims data, leveraging it with other key data from external sources and then using the results to influence urban resilience strategies. There are inevitable doubts over the willingness of insurers to share their data, but agile and thoughtful startups are likely better placed to be able to find insights in a world of abundant unstructured data than the more technologically challenged incumbents.

The current size of the protection gap is a failure of the insurance industry, and any companies that can help address it will not only be first movers in new markets but will also be adding social value and much-needed resilience to vulnerable communities all over the world.

InsurTech Need Not Be a Zero-Sum Game

This summer, I have attended a number of disruption/innovation insurance industry conferences in London that often, to varying degrees, come down to a debate regarding the extent to which InsurTech startups will be able to come and eat the lunch of industry incumbents. There is little argument that, should the insurance industry fail to better engage with its customers and continue to poorly communicate its social value in protecting people, communities and assets somewhere else will transform what today for many is a “grudge transaction” into a delightful relationship.

However, I believe InsurTech does not have to be a zero sum game. I am a proud member of the International Insurance Society (www.internationalinsurance.org) led by Michael Morrissey. In Singapore at the IIS annual conference, a keynote presentation was delivered on the recently formed Insurance Development Forum (IDF). The IDF was formally launched in April and is a collaboration between the insurance industry, the World Bank, the UN and various other institutions. The IDF is chaired by Stephen Catlin, with Rowan Douglas leading the Implementation Committee that includes industry heavyweights such as Dan Glaser, Nikolaus von Bomhard, Greg Case and Inga Beale. Its mission is to incorporate the insurance industry’s risk management expertise into governmental disaster risk reduction and to give insurance a larger role in providing resilience to communities all over the world.

In a speech at the conference, IDF Chairman Stephen Catlin noted, “We talk about innovation and new products. The reality is we are not even selling well the product we know and love dearly.” I believe the less insular InsurTech community — with its diverse skills sets (often from outside of the insurance industry) — can help insurers start to address the obvious misunderstanding consumers, governments and regulators share of the social value of the insurance product. Sam Maimbo of the World Bank, who sits between deep technical insurance teams and the public sector, noted he spends 70% of his time explaining what the industry has to offer. Addressing this communication gap has parallels to what many InsurTech companies are trying to do in providing better engagement with consumers than is currently provided.

There is real opportunity for InsurTech to work with the insurance industry in addressing blockages in the system that, if unlocked, would drive increased demand and grow the overall insurance pie. We are seeing a bit of this in microinsurance with companies like MicroEnsure and Bima providing low-cost insurance solutions to customers that, before recent technological advances, were just not possible. For instance, we need to see more examples of smart contracts founded on blockchain technology. In Africa, it is now possible to buy crop insurance through a mobile device that pays out based on a parametric weather-related trigger through a blockchain-validated third party source that almost eliminates the cost of handling a claim.

I am confident we are at the start of this kind of innovation and look forward to seeing more InsurTech companies look to grow the overall industry pie for the benefit of themselves and society as a whole.

Are Our Working Patterns Outdated?

We didn’t need Dolly Parton to tell us that the classic 9-to-5 office routine can be a draining experience. The routine developed at a time when only one member of a household, typically the husband/father, held a full-time job; today, it is far more common for both partners in a relationship (regardless of gender) to work. So a 9-to-5 approach can create considerable challenges for those caring for children.

With childcare costs rising and services in short supply, workplace flexibility is increasingly important to working parents. Today, lack of workplace flexibility is pushing some parents out of the job market, which is especially bad for the still-struggling world economy. Women, in particular, are more likely to rank flexible working and work-life balance as important considerations, according to Aon’s 2015 Workforce Mindset Study. The same study found that a flexible work environment was the second most important factor in deciding whether to take a job, and a-top five-most-desired area for improvement. Confirming this, three of the top six factors causing full-time workers to quit their jobs were because of difficulties in maintaining a work-life balance, according to a recent EY global survey.

Now that the world’s working-age population is on the decline, according to the latest World Bank figures, maximizing the number of people on the job is set to become an increasing concern for governments. With the proportion of women participating in the workplace also in decline over the last decade and the percentage of women in the global labor force stagnant at around 40%, making it easier for women to work could add $12 trillion to global growth, according to McKinsey.

At the same time, the world is experiencing a growing global skills shortage, meaning that businesses are eager to discover new ways to attract and retain top talent.

Introducing more adaptable ways of working to enable people to fit their careers around their non-work commitments could be a solution to all these challenges — maximizing workforce participation, reducing gender inequality and boosting global growth and productivity. This is part of the reason why the U.K. introduced a legal right to request flexible working in 2014.

But with a combination of the rise of new technologies and an increasingly globalized workforce, there are a number of ways to reduce the barrier to workplace participation.

In-Depth

Thanks to the huge changes in communications technology that many have predicted could revolutionize the way we work in the 35 years since Dolly Parton’s hit song and film came out, there are now more alternatives to 9-to-5 than ever. Here are some of the most popular:

Flextime

Employees work a set number of hours over a given period but can choose when they start and finish work (usually agreed in advance with their employer).

  • Pros: Employees can arrange their workday around non-work commitments such as childcare; employers can increase the hours during which they have staff working without increasing their workforce.
  • Cons: Ensuring clear communication and arranging meetings when employees are on different flextime schedules can be complex, while employees’ preferred hours may not fit client/customer needs.

Telecommuting

Employees work remotely, using the internet and phones to stay in contact with their colleagues.

  • Pros: Reduces the need to maintain expensive office space; saves employees money and time on their commutes; gives maximum flexibility to workers to balance their work and private lives as they see fit.
  • Cons: Unless properly managed, telecommuting can reduce cohesiveness of teams; while vastly improved in recent years, the technology of remote working isn’t yet quite reliable enough, some feel; lack of visibility on colleagues’ availability can lead to frustration and delays.

Shift working 

Employees work at staggered times, allowing multiple people to use the same workspace at different times of the day and night, or on different days of the week.

  • Pros: Employees can work at times that suit them, while employers can maximize the efficiency of their workspaces by running facilities for longer.
  • Cons: Can be complex to administer.

Job sharing

Two or more people share a job, working part-time.

  • Pros: Enables employees with other commitments to continue to work and employers to benefit from different approaches to the same job.
  • Cons: Maintaining consistency and quality levels can be challenging for employers.

Staggered hours 

Workers have different start and finish times.

  • Pros: Employees can set their hours to suit their needs; employers can extend their effective hours of business operation.
  • Cons: Can lead to resentment from employees who are unable to secure the staggered hours that best suit them, and can hurt team coherence.

Compressed hours

Employees work their full-time hours in fewer than the normal number of days, such as working 40 hours in four 10-hour days rather than five 8-hour days.

  • Pros: Employees have more extended periods at home and save money on commuting; employers can cut office costs by closing down on the extra off day.
  • Cons: Interacting with other businesses and with clients/customers on a four-day schedule when they are working to a five-day week can be difficult, and potentially lead to negative impressions.

Annualized hours

A more extreme form of flextime, the employee has to work a set number of hours a year but has some flexibility over when she does it, usually with some guaranteed hours based around peak periods.

  • Pros: Significant employee flexibility, and some benefits for employers with strong seasonal variance in demand.
  • Cons: Can lead to long hours being worked at peak periods, which can lead to reduced quality of work.

Commissioned outcomes

Employees have no fixed hours, just set output targets/deliverables.

  • Pros: Employees have maximum flexibility.
  • Cons: May require considerable project management to ensure that both employer and employee remain happy with the value for money of the arrangement and that targets are hit.

Term-time working

Staff attend the workplace only during school term times, going on leave (or shifting to telecommuting or part-time work) during school holidays.

  • Pros: Enables parents to spend more time with their children and save on childcare.
  • Cons: Means the business has to fit in with school schedules rather than market needs.

Zero-hours contracts

Employees have no guarantee of a minimum number of working hours but are called on as needed and are paid only for the hours they work.

  • Pros: Maximum flexibility for employers and beneficial for some employees who are unable to commit to regular hours.
  • Cons: Have developed a bad reputation and can be seen as exploitative, as the timing of the available work tends to be set by employers rather than employees; can make maintaining quality and training levels difficult.

When considering whether flexible working could work for your company, remember there are potential downsides as well as upsides to most forms of flexible working. What could lead to benefits for one industry, job type or employee could be detrimental to others, and, as with any project, the key is to be clear on what the intended outcomes are and how to measure success.

Talking Points

“The 8-hour work day is not as effective as one would think. To stay focused on a specific work task for eight hours is a huge challenge. In order to cope, we mix in things and pauses to make the day more endurable. At the same time, we are finding it hard to manage our private life outside of work.” – Linus Feldt, CEO, Filimundus

“The benefits of implementing flexible working policies are absolutely clear: happier staff, increased productivity and positive attitudes towards employer and business, to name but a few.” – Manesh Patel, senior benefits consultant, Aon Employee Benefits

“To boost employee freedom while also ensuring productivity, there are numerous flexible working options that businesses can offer… We have invested significantly in changing workplace culture, empowering employees to work from anywhere, while celebrating performance over presenteeism. These changes have led to great results, including a 20% boost in productivity and significant operational cost savings.” – David Langhorn, head of corporate and large enterprise, Vodaphone UK

“Bias toward stereotyping later starters means employees risk being inadvertently punished for taking advantage of flexible work time programs… Firms should be aware that simply introducing flexible hours on their own can have ramifications that should also be addressed. Indeed, without changes to their review procedures and other practices, they may ultimately be counterproductive.” – Sam Kai Chi Yam, assistant professor of management and organization, National University of Singapore Business School

This article originally appeared on TheOneBrief.com, Aon’s weekly guide to the most important issues affecting business, the economy and people’s lives in the world today.”

Further Reading

Ideas Transforming Developing World

The recent refugee crises in Southeast Asia and the Mediterranean demonstrate how developing world problems are increasingly becoming the problems of the developed world. Instability and economic weakness in poorer countries are leading to significant challenges for richer nations.

Aon’s Political Risk Map analysis finds significant instability across much of the developing world, compounded by cycles of war, famine, drought and disease, and this is only likely to get worse as climate change and rising populations make sustaining poorer countries more difficult than ever.

But the developing world also has huge potential. According to a recent PWC report, leading up to 2050, the 10 fastest-growing economies are all likely to be developing countries, while many developed economies will find their growth hampered by slowing productivity and the needs of their aging populations.

For the health of the global economy — as well as to relieve pressure on developed world countries’ ability to cope with increased migration — helping the developing world become more stable and sustainable is in everyone’s long-term interests. Yet, until recently, most attempts to help had been based around charities and aid.

This is starting to change. Below, we round up some interesting, innovative projects — many driven by the private sector — that could have a significant positive long-term impact on the developing world.

In-Depth

The reasons for the slow growth of the developing world economies are well-documented: poor infrastructure, lack of education, lack of money, high levels of disease, susceptibility to extreme climate events, political corruption and instability.

Solving this is a long-term challenge, not something that can be fixed with a bit of international aid to mitigate the effects of the latest crisis. With governments often focused on the short-term periods before the next election, it is increasingly business that is starting to come up with innovative and effective solutions.

Improving access to knowledge

It might seem strange to suggest technology-based solutions to education in societies where many struggle to earn enough to feed themselves. But to build viable societies and thriving economies, we need to provide the workforce of the future the skills it needs. Everything starts with education — but how can we provide access to reliable, quality education in underfunded countries with poor infrastructure and a serious lack of trained teachers?

According to recent Pew Research Center data, a majority of people across the developing world now have access to a mobile phone. This is a real game-changer.

Access to a mobile means having access to information, and access to information means having the ability to make improvements to your way of life. Even basic feature phones can improve literacy rates, according to the World Bank, while smartphones, computers and tablets have the potential to radically change the educational landscape of developing countries.

By enabling access to the internet, a single connected device shared by a community can provide access to structured remote learning programs, as well as all the knowledge on the World Wide Web. And while internet access may still be a challenge for the most remote communities, there are several initiatives under way to provide universal global Internet — Google’s Project Loon, which uses high-level balloons to provide wireless connectivity, and Facebook’s satellite-based Internet project are merely two of the most high-profile.

Access to the internet can also bring significant health benefits. Connected devices are increasingly being used for some remote medical examinations through organizations such as Peek and CardioPad. Education campaigns to improve knowledge about nutrition and basic hygiene via mobile could also have immense impact; improving knowledge about child nutrition in the poorest countries could boost their GNP by 11%, cut child deaths by a third, and increase wages by up to 50%, according to the Scaling Up Nutrition movement. Even simple text message alerts about disease outbreaks, such as those used in Sierra Leone during 2014’s Ebola outbreak, have the potential to save tens of thousands of lives.

Improving access to finance

Technology could also help tackle the developing world’s funding challenge. According to the Bill and Melinda Gates Foundation, only 41% of adults in developing countries have bank accounts. Without bank accounts, saving for the future — to invest in improving farms and businesses and to weather unexpected financial shocks — becomes much harder, as well as far less secure. It can also restrict the ability to buy products and services that people need to improve their lot in life.

Access to physical banks remains a serious challenge for remote communities — which is where mobile phones again come in. Vodafone’s M-Pesa money transfer system is one of the best-known examples of mobile-based payments, reducing the need for a traditional bank account, but there are plenty of alternatives (such as Africa’s Airtel Money, or Bangladesh’s bKash). “The mobile phone is becoming ubiquitous and is a natural distribution channel,” says Aon’s latest Global Insurance Market Opportunities report. “It offers the promise of more efficient distribution and an improved ability to scale quickly.”

Yet the ability to make payments is one thing, but getting hold of the money to pay them is quite another. This is where microfinance comes in.

First established in the 1970s, the microfinance concept is simple: provide reliable, low-interest loans of relatively small sums to the poorest in society to enable them to invest in essential equipment or materials to start or improve their businesses. With the rise of mobile, the logistics have become considerably easier — and the concept has been spreading exponentially. With basic seed capital becoming more accessible to small businesspeople across the developing world through organizations such as the Nobel Peace Prize-winning Grameen Bank, the potential for economic growth is stronger than ever.

But while loans are a good start, the next phase in microfinance is set to focus on providing additional financial security through microinsurance. Funded by low payments, if crops fail, natural disasters strike or illness or injury hit, low-cost insurance for the world’s most vulnerable can help them recover — where previously they may have had no safety-net. People with microinsurance have also been shown to invest more in developing their businesses. This has been shown to encourage the use of healthcare services, prevent the spread of diseases and help reduce the burden on government budgets for pensions, healthcare and aid.

Teach a man to fish

The key to both these approaches is to help the world’s poorest help themselves — not merely teaching them to fish rather than giving them a fish but providing them with the ability to buy their own fishing nets, rods and boats and with the security of knowing that if any of these are broken, they will be able to replace them.

Where previous efforts at helping the developed world to develop have focused on providing vital infrastructure, healthcare or nutrition one community at a time, the shift in recent years toward helping the developing world help itself is proving a revolutionary innovation. It’s still early days, but the signs are that by focusing on improving access to knowledge and finance and empowering communities to focus on building sustainable improvements, the developing world is starting to have a better chance of developing than ever before.

Talking Points

“From better health to increased wealth, education is the catalyst of a better future for millions of children, youth and adults. No country has ever climbed the socioeconomic development ladder without steady investments in education.” – Irina Bokova, Director General, UNESCO

“There has been a strong social mobilization to use cell phones, television and whatever technology the government and private health care sector can to disseminate public health messages… Modern technology is vital here, and it can be this simple.” – Ladi Awosika, CEO, Total Health Trust

“The problems and risks facing low-income populations are vast and complex. Offering microinsurance to these segments brings with it all the complexities of their daily life which need first to be understood and then addressed by microinsurance stakeholders; education levels, house-hold budgeting, behavioral economics, choice, priorities and inconducive infrastructure to name but a few. These barriers change from community to community, from region to region and are often vastly different to those faced by the more traditionally served clients in developed insurance markets.” – Marco Antonio Rossi, President, Brazilian Insurance Federation

This article originally appeared onTheOneBrief.com, Aon’s weekly guide to the most important issues affecting business, the economy and people’s lives in the world today.”

Further Reading