Be more agile! How to anticipate a transforming risk landscape

An effective risk management process is a basic requirement for tackling transformation risks. In most cases, the risk analysis that goes with identifying risks focuses on actual risks. Abstract risks, which are currently hard to assess and thus difficult to evaluate, yet which in essence derive from systemic change or resultant strategic decisions, are often overlooked. However, to master the ever-increasing speed of change we are challenged to adjust the pace with which we tackle the associated risks. Agile risk management plays a decisive role in this process.

My first article of the current HORIZON series introduced our 4 Risk Changers model and put the spotlight on the multiple challenges faced by companies. In the light of ongoing and rapid change, these challenges are to date omnipresent.
 
Based on our vast experience and extensive expertise in corporate risks, I consider these complex changes as systemic risks. I have categorised them as ecological, geopolitical, technological, and social transformation risks.

The 4 Risk Changers

Unlike the tangible assets in former years, it is now the intangible assets which increasingly influence the transformation of companies’ risk environment. The major challenges for a forward-looking risk management are posed less by the concrete individual risks at an operating level but more by the abstract systemic risks which are caused by global events and external developments.
 
Central to my view are the effects of this systemic change on the risk situation of companies. Also, I differentiate between primary and secondary transformation risks.

  • Primary transformation risks derive directly from the risks associated with systemic change. For example, the impact of the war in Ukraine on the supply of energy and the development of prices in Europe are a result of geopolitical transformation.
  • Secondary transformation risks are typically speculative. They include both risks and opportunities and derive from the metamorphosis which companies have undergone because of systemic change. The aim is to emerge from the crisis stronger than before and/or take advantage of the new opportunities presented by this change. The resultant new risks – despite being abstract – are of great significance and cannot be ignored. They must be viewed from a holistic perspective.

How systemic change affects insurance

Primary and secondary risks tend to increase during a transformation process. They evolve over time. At the beginning, these transformation risks can only be identified with great difficulty. Most of the time we tend to pay less attention to them. Only when they reach a specific threshold, when we become aware of “soft signals”, can they be identified as such and dealt with by risk management.
 
As is the case with conventional “emerging risks”, the required risk assessment, however, lacks experience, i.e. it lacks historical data and information, presenting an obstacle for analysing transformation risks.
 

When developing suitable risk management strategies, the attempt to transfer these risks to the insurance market as part of the development of suitable risk management strategies is bound to fail in most cases. The principle of insurability applies. This means, a risk must be measurable for the insurance market to secure adequate capacities. If there is no measurability – as opposed to the maximum loss calculation in the case of fire risks, where the possible maximum loss (PML) represents the maximum expected damage caused – it will be determined based on data modelling of historical risk and claims as well as on actuarial assumptions.

Transforming risk landscape affects insurability

Since new risks and transformation risks lack the required historical data, there is usually also a lack of availability of insurance capacities, especially in their uncertain early stages of development. Adequate insurance solutions (can) only come into being over time.
 
The current systemic transformation leads to numerous new and changing risks which cause companies’ risk landscapes to change permanently and at an increasingly rapid pace. These dynamics now result in less and less insurance for operational risks, which in the past were adequately and successfully insured.
 
Thus, as the gap between the lack of insurability and company risks continues to widen, there is an urgent need for the implementation of new methods in risk management.

A transforming risk landscape is often ignored

In practice, many risk management systems that have been implemented only manage concrete risks which already exist. Due to a lack of both early-warning mechanisms and the outside perspective on systemic change and its global events, the risk analysis focus is still on the known and assessable risks. The attention is on the actual situation of the risk environment.
 
Today’s abstract risks, i.e. risks which still evolve as a result of the changing business environment and have therefore not yet occurred or new risks arising from strategic changes in the business model that aim at seizing new opportunities, are often ignored. In practice, the resultant transformation of the risk landscape is hardly ever anticipated. It is only dealt with once risks manifest themselves because that is when they can be identified and assessed accordingly.
 
So, how can risk management help to tackle increasing volatility, uncertainty, complexity, and ambiguity and, in turn, boost the resilience of companies? An effective approach that facilitates an agile management of abstract transformation risks needs to be implemented. Existing risk management processes must widen their scope and perspective with some type of risk forecasts, enabling risk managers to anticipate risks at an early stage and allowing them to better prepare themselves.

Agile approach to anticipate transformation

Quite often, we encounter situations where a company’s risk management is organised in closed administrative departments which function like silos that were put in place to comply with legal requirements. Because such risk management deals with risks at an individual level only, its benefit as a company-wide tool to effectively manage risks often fails to achieve its full value.

Systemic change - Primary and secondary risks

The agile management of risks and opportunities is based on a corporate culture that is open-minded towards such risks and opportunities and is organised around transparency, dialogue, trust, and constant feedback cycles.
 
It comprises interdisciplinary teams whose members act with utmost flexibility as and when needed and who are an integral part of strategic and operative decision-making processes.
 
That way, transformation risks can be anticipated and acted upon at an early stage. This boosts the resilience of companies, enabling them to make the most out of future opportunities.
 
Anticipating transformation risks at an early stage means viewing the world from a future perspective and interpreting the inherent risk situation in the best possible way. Paying attention to soft signals, like new and shifting trends, as well as an open-minded attitude towards strategic considerations helps the establishment of effective early-warning indicators to manage risks.

Agility drives insurability and strengthens resilience

As a risk specialist, it is our vision to manage the risks of our clients in such way that they can rest assured and focus on their core business.
 
As a loyal and trustworthy partner, we work for and with our clients in flexible, interdisciplinary teams where we prove our transparent, dialogue-driven culture every day.
 
We anticipate systemic change and proactively direct our organisation towards the future needs of our clients. Agile risk management plays a key role for us.
 
In future, our progressive service approach will focus even more strongly on anticipating any change and resultant risks at an early stage.
 
HORIZON – “Risk Thought » Fast Forward” is our platform for risk-thought leadership. It follows our ambition to anticipate systemic change at an early stage, drive the insurability of a transforming risk landscape and create value through tailored solutions that strengthen our clients’ resilience and protect their future ventures.
 
 
GrECo, matter of trust.

Georg Winter

CEO

T +43 664 962 39 06

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Be more agile! How to anticipate a transforming risk landscape

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Social Workplace – Giving People a Sense of Belonging

Social Workplace - Giving People a Sense of Belonging

From an HR perspective, the past three years were predominantly shaped by the challenges and crises that have influenced our activities since the beginning of the pandemic. The impact of volatility, uncertainty, complexity, and ambiguity – the VUCA world – has become more pronounced with each crisis that has hit both the economic environment of organisations and people`s personal lives.

Our world is marked by rapid change, continuing disruption, and instability. Geopolitical risks that boost this uncertainty add to the challenges in the global labour market. Organisations find themselves in a seemingly ongoing struggle to attract, retain and manage talent. But what implications does this have on our HR work?

A new approach

The pandemic has taught us to work in hybrid environments that connect co-workers mostly virtually. As a result, social interaction has decreased. Multi-channel communication has become part of our daily work routines. However, Eurostat statistics show that in 2021 only 13.5% of employees in the EU performed work from home on a regular basis. Even if 2022 shows a slight decrease in the area, remote work has come to stay, and yet another upward trend is expected for future years. Although the flexibility of the workplace enables individuals to better balance work and personal life, the downside of remote work is the lack of social interaction. That being ascertained, leadership teams and HR have recognised the importance of moving their people into the centre of their attention.

Creating social work environment

As ESG (environmental, social, governance) topics are gaining importance throughout organisations, HR must focus on creating socially sustainable work environments. The first step in this process is to create awareness and a common understanding of how the most relevant factors of social sustainability are linked to the corporate vision and mission. In this dynamic framework, organisations must seize the opportunity to rearrange their corporate DNA, create sustainable and secure workplaces and build a work culture that puts people first, focussing on individual needs. More and more candidates are now screening potential employers’ efforts towards climate protection, diversity, equity, and inclusion as well as ethical decision-making. Especially the generations X, Y, and Z want to contribute towards making the world a more liveable place again.
 
Sustainable Human Resource Management also considers future generation workforces and seeks to achieve long-term strategic alignment in human resource planning. However, the latter seems to be an increasingly challenging task. The much-cited and increasing shortage of skilled personnel as well as an ever-ageing workforce constitute the main obstacles.

Different generations – different values

The generation mix from baby boomers to generation Z on the labour market and within organisations creates a blend of values and relevant cultural features. The critical assets professional experience and expertise meet young academic knowledge and ambition. Digital natives and digital immigrants team up to achieve corporate goals. Whereas this may seem obstructive at first glance, the dimension “age” as outlined in the Diversity Charta offers numerous chances for individual development, skills transfers, sharing of knowledge and experiences as well as mentoring and sponsoring of talent. Putting the generation issue aside, the focus must be on merging the different values of each generation to create a common work culture.
 
But who are those talents and where can they be found?

Identifying, promoting, and managing talent

According to a Deloitte survey, more and more organisations are beginning to redesign working environments to attract and retain top talents regardless of their age. It is important to acknowledge that what differentiates talents from any other member of the workforce are their relevant performance potential, their competences, and their commitment towards achieving organisational goals. While talent is often associated with external resources, screening the workforce for potentially dormant talent within the organisation should become a permanent feature in the recruiting and people development processes.

Having identified talents, HR must regularly verify whether the skills and competences meet the requirements of the future workforce. Comparing current and possible future roles is part and parcel of a well-structured talent and succession management scheme to facilitate people development within the organisation.

Learning & Development Strategy

In the future, the focus will be on high-value human work, where upskilling and reskilling constitute the main objectives of talent strategies. Rapid change in knowledge and skills lifecycles demand a Learning & Development Strategy that provides learning modules that help identify and develop future skills and, more importantly, enable regular reviews. Learning programmes that foster education and individual development, opportunities that promote transparent and flexible career paths and broaden the range of tasks, rank high among talents. People want to be part of this transformation where businesses evolve into learning organizations. They want to play a role in the development of future skills as this provides them with orientation and the key to unlock innovation and creativity. However, this development needs a framework that allows a balanced error and feedback culture as well as trust in new work approaches.

Creating a sense of belonging

Undoubtably, HR has moved away from the lockdown-induced standstill of the recent past. HR is now trying to best counteract today’s crises of inflation, war, and energy shortages. It needs to move into the new year with a healthy portion of optimism. Whereas little can be done about these crises, HR can be instrumental in building work environments that employees feel connected to. People who feel a sense of belonging are more likely to identify with and stay in the organisation. For HR this means: To move the organisation forward, the first huge step in the right direction is creating a sense of belonging.

Gabriele Andratschke

Head of Group Human Resources

T +43 664 962 39 18

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Embedded Insurance Gives People Peace of Mind

Embedded insurance solutions

The biggest problem of the insurance industry today is the fact that the sales of an insurance product are separated from the sales of the core product or service that the insurance is associated with.

As a consequence of such “separate sales”, the insurance product is often rejected by customers as an unappealing hassle, causing a huge gap in protection in the end. And, due to market changes in terms of digitisation, climate change and lack of innovation, this gap is just getting bigger and bigger.

Buying insurance online is still a major issue for most customers because of the complexity involved. That is why most insurances are still sold offline. True, customers research online but cannot make a purchase online.

Closing the gap with embedded insurance

One solution is to embed the insurance into the digital service offering. This means offering the insurance on the spot, when the need is there and when the risk is a top priority for the buyer. Embedded insurance bundles the insurance coverage or protection while the customer purchases a core product or service. The insurance is no longer sold separately to the customer, but it is provided as a standard feature of the core product or service. The customer thus gets a more affordable, relevant, and personalised insurance when its needed most.

Looking ahead in volatile times

If we look at what happened all over the world recently, what is currently happening and if we are wondering what will still happen, we will agree that we are facing massive, serious, and stressful life events. Whether the Covid-19 pandemic, the war in Ukraine or a potential blackout crisis – events like these hit us physically, emotionally and financially. Consumers all around the world have felt it and continue to face extreme consequences. Many have lost their jobs and many are tackling with a decrease in income.

Events like these dramatically change consumers needs and preferences, making them more open to new, innovative products and new ways of purchasing products. More importantly, customers now want to reach for simple and affordable products with obvious, yet strong value propositions.

Consumers are looking ahead, they are trying to plan and find ways that will protect their life, health and well-being. They want to be better protected, just in case they must deal with a new crisis. They have become proactive rather than reactive. Insurances that will cover their hospitalisation expenses, life insurances with an emergency funds availability or protection of their income is what they are now focusing on.

They are looking for innovative products, embedded solutions and new ways of insurance distribution. Consumers expect the insurers to understand their needs and satisfy those in easy, direct and most affordable ways. They want insurers to help them feel somewhat normal again and provide them with new ways of engagement.

The role of embedded insurance

Embedded insurance helps customers when they need it most. It provides them with the possibility to protect their lives, their health and their lifestyle at the right point in time.

One example is an electricity company that decided to offer customers a free-of-charge bill protector insurance that covers customers’ electricity invoices in case of unemployment or a work inability.
They found a way to show their customers that they care and that they are there to help when things get rough. They also show them how much they appreciate their loyalty. This is exactly what customers expect during volatile times.

Embedded insurance can help people recover from the stress of the pandemic, the economic effects of the war and other serious life events by adding great value and combining it with great insurance solutions via new distribution channels and new ways of customer engagement.

Sources:
https://www.ey.com/en_gl/insurance/how-can-insurance-protect-the-customers-who-need-it-most
https://www.micglobal.com/reasons-why-embedded-insurance-future/
https://medium.com/digital-diplomacy/embedded-insurance-cbc408ebfb7
https://www.albion.vc/blog/why-we-are-excited-about-embedded-insurance-2021
https://www.linkedin.com/pulse/embedded-insurance-3-trillion-market-opportunity-could-simon-torrance/

Alma Ribanovic

Group Practice Leader Affinity

T +43 664 962 40 17

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Be more agile! How to anticipate a transforming risk landscape

An effective risk management process is a basic requirement for tackling transformation risks. In most cases, the risk analysis that goes with identifying risks focuses on actual risks. Abstract risks, which are currently hard to assess and thus difficult to evaluate, yet which in essence derive from systemic change…

Czytaj dalej …

”The World Is in Big Trouble.“

Our CEO Georg Winter shares his views on why geopolitical transformation is our focus this year and why it exacerbates existing risks and causes new risks to emerge.

Secretary-General António Guterres made this statement at the General Assembly of the United Nations on 20th September 2022 in New York.

We are undergoing times of permanent change, which many refer to as systemic transformation or multiple crises strung together. This change takes place in different fields and segments. They, in turn, are interlinked at various levels. HORIZON’s risk-oriented approach aims to define and outline the key areas of change affecting your company. In doing so, we take a close look at the systemic influences of ecological, geopolitical, technological and social transformation on your company’s risk landscape.

The 4 Risk Changers

The 4 Risk Changers

These transformation processes are very dynamic, they are often interdependent and thus characterised as complex processes. They also result in systemic risks. Managing them requires much more than traditional methods of risk management.

In terms of risk management, we refer to these systemic risks as “risk changers” that directly affect companies and categorise them as follows:

  • “Environment in danger” for ecological,
  • “Beyond globalisation” for geopolitical,
  • “Digital transition” for technological and
  • “Social disruption” for social transformation.

HORIZON – “Risk Thought » Fast Forward” is our platform for so-called risk thought leadership. It is based on our vision to detect the impact of these risk changers at an early stage and introduce risk management solutions that boost our clients’ resilience.

How do the 4 Risk Changers affect companies?

Companies are exposed to various kinds of risks. At the same time, systemic transformation exacerbates existing risks and causes new risks to emerge. These primary risks have a direct bearing on companies.

 How do the 4 Risk Changers affect companies?

Primary risks – Transformation leads to direct exposure

Ecological risks
When we look at climate change, we refer to climate risks. They are apparent in form of a changed or an increased exposure to natural disasters, such as floods, storms, hail as well as heat, drought or a rising sea level. As far as companies are concerned, these risks can cause anything from material damages to disruptions of transport routes, in energy, or raw material supplies.
 
Geopolitical risks
Geopolitical change, characterised by an economic bloc having been established between the USA and China, has put free world trade to the test. It also shows, by looking at Russia’s invasion of Ukraine, just how quickly a system conflict, which we thought had been settled between the democratic and autocratic world, can be reignited. All that, exacerbated by global events, like the Covid-19 pandemic, puts pressure on the availability of energy resources, disrupts supply chains and leads to a global wave of price hikes that challenge governments, businesses, and the civilian population alike.
 
Technological risks
Technological change has resulted in an over-dependence on data, software and IT infrastructure. All are targets of a rapid increase of cyber threats all over the world and are thus one of the biggest threats of the 21st century.
 
Social risks
The growing divide between rich and poor, the lack of equal opportunities regarding age, ethnic background and nationality, gender and gender identity, physical and mental abilities, religion and ideology, sexual orientation and identity as well as social backgrounds increases social tensions. The Club of Rome deems equality and justice as part of the ideal solution for a liveable future.

Companies cannot shirk their responsibility in this regard. For instance, social issues are becoming more and more important as we are facing an inevitable demographic change that has already resulted in a systemic shortages on the job market.
 
Correlation
The interdependency of these systemic risks is best demonstrated by the war in Ukraine: From a geopolitical point of view, it has led to an energy crisis. In terms of technology, it has led to an increasing number of cyber threats. On top of that, well-targeted campaigns are aimed at splitting society and disturbing social peace in our Western world. From an ecological perspective, however, there is hope that our efforts to reduce carbon dioxide emissions can finally be carried through.
 
Systemic change – Primary and secondary risks

Systemic change - Primary and secondary risks

Secondary risks – Adaption creates new chances and challenges

Besides these primary transformation risks, which affect companies as “pure risks” from the outside, systemic change leads to secondary transformation risks that are “speculative”. They derive from companies’ adapted business models that were developed in response to the systemic change and comprise both risks and opportunities.
 
Ecological adaption
In the fight against climate change, many companies have decarbonised their processes or have developed sustainable products. Saving resources and taking advantage of new opportunities are key focal points. However, new products and processes lead to new risks that must be identified at an early stage.
 
Geopolitical adaption
As a result of the geopolitical change, companies had to explore new markets and new sources for raw materials and find new ways of attracting both customers and suppliers, while keeping a watchful eye on possible dangers. Although the currently rising energy prices still paint a different picture, supply chains can be shortened through nearshoring. This could very well result in a wave of reindustrialisation in Europe.  
 
Technological adaption
Technological change enables us to pursue totally new paths. While the automation and digitisation of value chains is gaining importance, the full potential of mergers, transparency, big data, and metadata remains to be exploited. Manufacturers of previously traditional products and services are becoming system providers, goods are being replaced by data, and machines by platforms.
 
Social adaption
In the past, humans used to be regarded as resources. Now, humans with all their resources take centre stage. The concept of Industry 5.0. does exactly that. It places the human being at the centre to promote and foster diversity, different talents, and activities. Many companies have already initiated a transformation process because employees nowadays attach more importance on meaningful work. They believe that they can make a difference when it comes to resilience and sustainability.

Beyond globalisation – Geopolitical transformation in the spotlight

The upcoming release of HORIZON will concentrate on the geopolitical transformation and therefore looks at all its challenges from various angles.
 
New political world order
Does the war in Ukraine show us the dramatic face of a new political world order and how does this conflict at the very centre of Eastern Europe disrupt our economic basis?
How will the global trend of bloc formation between democratic and autocratic countries influence companies’ global business activities in the future?
What is the risk of technology being abused as an instrument of power and how could this affect companies?
How will the increasing conflict between the USA and China influence global economic relations?

Energy crisis
Blackout and a cold winter – how can we prepare for a total outage?
Will the current shortage of natural resources ruin Europe’s industry or will an ambitious energy transition turn Europe into a role model for a green global economy?

Supply chain dilemma
Will the geopolitical transformation result in a new era of offshoring, or will regional supply chains and increasing investments in circular economy boost independence and resilience?
How will China´s rise continue – considering its growing regional influence along the new silk road – and what will be the effect of its strategy of isolation as a result of its zero-tolerance pandemic policy?
Is the conflict over Taiwan’s independence a ticking time bomb for the global economy?

Loss of wealth
Will double-digit price increases lead to a decreased standard of living over the long term?
Does high inflation increase the risk of social riots in Europe?
How do these circumstances influence people’s work-life balance and their work attitude?
What does a new wave of migration mean for European companies and their DE&I (Diversity, Equity, and Inclusion) agenda?
 
It is indeed a difficult and challenging situation that raises many most pressing questions. We need to discuss them, their impact on the transformation of the risk landscape as well as possible solution scenarios.
 
Stay tuned!

Georg Winter

CEO

T +43 664 962 39 06

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Be more agile! How to anticipate a transforming risk landscape

An effective risk management process is a basic requirement for tackling transformation risks. In most cases, the risk analysis that goes with identifying risks focuses on actual risks. Abstract risks, which are currently hard to assess and thus difficult to evaluate, yet which in essence derive from systemic change…

Czytaj dalej …

Do Health & Benefits Really Matter to Employees?

Employers need to go back to basics and look at the structure of the benefits they offer and determine if it must be changed or stepped up. Now is the time to do it.

Steps employers can take to future-proof benefits

For employers with international offices or mobile employees, the wider benefits strategy must match the wider HR and Benefits strategy, corporate objectives as well as workforce demographics. Any required local changes must be assessed as well.
 
The Health & Benefits being offered must ideally reflect changing working patterns, age differences in the workforce, as well as individual country requirements affecting mobile employees, expatriates, and teams in international offices.

Do Health & Benefits really matter to an employee?

Absolutely yes, but with different emphasis. A recent report by edays showed that 75% of employees are more likely to stay with their employers because of a great Health & Benefits programme. Considering a new political world order, employee cross-border migration and decreased standards of living, employers need to recognise that their Health & Benefits, together with corporate culture, are ways to differentiate themselves, to compete for talent, retain staff and better engage their workforce.
 
At the same time, employers need to keep in mind that the success of any benefits programme largely depends on benefits being tailored to the needs of a diverse workforce.
 
As no workforce is the same, benefits that matter to one group of employees may not matter to another. Millennials for instance may be most concerned about the debt they have to pay; older employees will focus more on whether they have enough for their pension. TeamStage reported that millennials will represent 75% of the global workforce by 2025.
 
Employers are challenged to find new and innovative ways to engage this group of employees, while making sure the Health & Benefits they offer cater for the needs of the entire workforce – a huge challenge for HR. A sustainable Health & Benefits programme that is fit for purpose will be an asset for the success of the business.

Is remote and flexible working here to stay?

Yes, and no. I am rarely one to sit on the fence but in this case, it is not a simple answer. Adding more flexibility to the way we work will enable employees to create the work-life harmony that works best for them.
 
Nevertheless, we cannot work remotely in every sector. Remote and flexible working models thus need to be well-managed. No doubt, the move towards remote working has presented employers with a new opportunity to address the needs of a multi-generational workforce, but it has also created a huge challenge and in some sectors a move away from “tradition” where employees came to the office every day and were “present” to a new way of working, sometimes not just from their home, the coffee shop, library, or on a beach.
 
We are faced with up to five different generations of employees in the workforce: from those in their 20s to those who are still working into their 70s and beyond. As a result, HR teams have been reviewing their long-term approach to flexible working and related policies. Talking with many HR leaders, it has become clear more flexible Health & Benefits strategies could help employers retain their ageing workforce and attract new talents.

What role can an adviser play?

The first step is for employers to better understand their working environment, culture and people. Culture plays a key role. It provides employees with a solid foundation, helps build trust and a safe working environment. Besides that, employers have started to recognise that the value of an effective Health & Benefits offering goes far beyond the traditional objective of recruitment and retention. It also goes far beyond traditional insured benefits, rather it focuses on wellbeing, flexible leave policies as well as wider fringe or lifestyle benefits.
 
The right benefits strategy, a clear direction as well as practical solutions, will help employers attract the best people and look after the needs of their workforce. Health & Benefits will become more employee-led. More and more employees are wanting to select the benefits that suit them, meaning employers need a multilevel benefit system where people can pick and choose – hence the need for the right technology and digital solutions.
 
Globally, we are all feeling the financial squeeze on our income. Now, more than ever, employers need both support and sophisticated solutions, coupled with expert and professional advice to ensure they have the right benefits, strategy, and direction in place to meet the changing needs of their employees and business.
 
Employers are already looking beyond insured benefits at other factors which are fast becoming part of the wider HR and organisational strategy. Factors that impact decisions concerning benefits design and strategy, such as: ESG (climate, DE&I and Governance), alignment of benefits with corporate objectives, employee value proposition and achieving work-life harmony across their domestic and international workforce.
 
The time is now for employers to invest their benefit budgets wisely and in areas where the impact will be felt most! A one-size-fits-all Health & Benefits package is no longer appropriate, presenting HR with one of their biggest challenges!

Adam Riley, Cert PFS 

Group Practice Leader Health & Benefits

T +44 (0) 7507 788 144

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Be more agile! How to anticipate a transforming risk landscape

An effective risk management process is a basic requirement for tackling transformation risks. In most cases, the risk analysis that goes with identifying risks focuses on actual risks. Abstract risks, which are currently hard to assess and thus difficult to evaluate, yet which in essence derive from systemic change…

Czytaj dalej …

The World Is Changing, Enter a New World Order!

The world is changing, enter a new world order!

Nowadays, employees expect more from their employer than ever before. Meeting these expectations will involve more personalisation of the health and benefits offering.

The world has had its fair share of upheavals, but when Covid became part of our daily conversations, irrespective of where one lived, we were all looking for the magic light at the end of the tunnel! It took a long time to come, never have we had to live with so much uncertainty, and this new state of uncertainty will become part of life, certainly for the foreseeable future.
 
Employers reacted quickly when another lockdown was announced. Working from home became the norm, and a new way of living was forced upon us. I remember when the first lockdown was announced; I thought it would soon be over, but days turned into weeks, then months. Schools closed, infrastructure suffered, travel became a distant memory, as did freely going on holiday.
 
The financial impact on the global economy was severe, and the true extent of the impact on people’s mental wellbeing is still largely unknown.
 
Then the unthinkable happened: a war in Europe! Further significant disruptions aggravated the already fragile and near-breaking healthcare and financial systems across the globe. Energy supplies, production lines, supply chains, distribution channels, and more, were equally hard hit. Many believe these disruptions have permanently altered the world order. While we all feel the direct and indirect impact of the war, managers and business owners have made it their top priority to protect the health and safety of their employees. 

A new world order …

History tells us that Woodrow Wilson and Winston Churchill introduced a term “new world order” to global politics, describing a new era of history marked by a profound shift in world political philosophy and the worldwide balance of power. Over the years, it became a factor in domestic and international relations and in legislation. It also sent out a clear message that change to the status quo was on the cards. As a result of the global consequences to the war in Europe, “a new political world order” has come about, again.
 
Rapid change and shifting trends have also found their way into companies. In response to the economic crisis – caused by the world bouncing back from Covid, changing weather systems, spending patterns and the conflict in Europe – employers are taking steps to support their staff, arguably much more than we have seen in recent memory, but this can only go so far as it is not just individuals who are affected. Employers also need to address their short, medium, and long-term strategies simply to remain in business.
 
The cost of living has risen significantly. Levels of inflation across the globe have spiked. Talks of recession and warnings of energy price-increases have become reality. The war in Europe, which many thought would be over quickly, still rages on, with terrible human loss. Unstable Governments resulting in profound market and economic shifts resulting in significant changes to financial ratings.
 
The news presents a gloomy outlook – yet, still, employers continue to uphold both health and benefits in their companies, whilst at the same time employers are facing increasing insurance premiums and crippling energy bills. Why? Their employees are important, as are the families. With this, we are seeing a shift in how employers are looking at their future benefit programmes – a steady wise in employers ripping up the “benefits blueprint” and looking at how to restructure their benefits to be more sustainable; more fit for purpose to assess how the wider package could better support their employees.
 
Whilst some level of financial support is welcomed by all, this is only one part of the solution. Employers with voluntary-style benefits, discount schemes etc can also signpost employees to these as they can offer real-time savings for every-day-expenditure.  In view of the current economic backdrop where pressure on salaries has started to impact, we are seeing more employers incorporating this into the wider offering, and anecdotal evidence shows this has been well-received by employees.
 
We learnt valuable lessons through lockdowns when innovative digital solutions were introduced because we could not access face-to-face services. Solutions such as online yoga and personal trainer lessons, telemedicine and virtual appointments to access General Practitioners, wearable technology being used to track fitness levels, our sleep, diet, etc. have been widely adopted.  Many of us have become used to doing things via handheld devices.
 

We need to better listen to our people

People typically don’t like to admit it they are struggling or ask for help! The same applies to financial difficulties, where many people struggle silently when faced with the next household bill, rising energy bills, dental costs, etc. Hence, employer attractiveness has long since ceased to be defined by just the daily fruit basket or a water cooler. Corporate culture and wider wellbeing must therefore be place permanently on the leadership agenda to enable employers to better support employees and promote financial, mental, physical and social Wellbeing.
 
Everyone knows and understands the arguments as to why Wellbeing needs to be taken seriously. When it comes to Wellbeing, it is a complex dynamic between the culture of the company, the work environment, external factors, and the physical, social, psychological & mental health of employees – it also perfectly dovetails into the wider ESG conversation and the key sustainable development goals!
 
As the Human Sustainability Index, a new way to track Wellbeing and performance, gains momentum, we’re seeing more and more organisations wake up to how they can decrease burnout and build performance and Wellbeing at the same time.
 
Employers also need to focus more on the individual; however, they first need to listen to what their employees are saying, and not simply push forward an employee “benefit” just because it may be a good idea for the company. Over the years, I have seen many employee “benefits” introduced (sometimes at significant cost to the company) only to hear the end recipients, the employees, say that it isn’t something which is needed or wanted.
 
Nowadays, employees expect more from their employer than ever before. Meeting these expectations will involve more personalisation of the benefits offering: employers reviewing what benefits are offered, restructuring leave, and working policies, bringing forward salary reviews to help those who need it most, and perhaps even shaping a position to suit the skills, experience, and ambitions of the individual they want to recruit. Ultimately, employees are expecting employers to work hard(er) to attract and retain them. Those that do can expect to gain the very best talent. Those that don’t will face an uphill struggle in getting the right people, achieving employee loyalty, and of course engaging their people!

Adam Riley, Cert PFS 

Group Practice Leader Health & Benefits

T +44 (0) 7507 788 144

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