At our Marsh & McLennan dinner here at Davos every year we aim to offer what our colleague who organizes it describes as a “haven from the madness.” And it’s amongst that atmosphere of intense discussion of the hard facts and figures of policy and economics, and the showcasing of incredible analytics and technology, that I want to take time to talk about something which events this year might suggest we may have overlooked: that’s people.
Every year, Davos brings home to me how powerful connecting as directly as possible with people continues to be. At a time when virtual, high quality face-to-face discussion is so accessible, it’s remarkable how many of us still value coming together in person. And clearly none of us came for the beautiful warm weather!
Far from the village limits of Davos, the importance of connecting with individuals at a personal level has become incredibly stark to all of us this past year. Data and analytics did not accurately predict the outcomes of such powerful popular sentiment that drove events like the Brexit vote and the still hotly debated outcome. And nor did the data around the US election adequately predict that outcome. And now we’ll see how that plays out in the elections across Europe in the coming months. There’s no doubt that the rise of broad-based individualism, yes people, is one of the greatest trends bringing transformative change to the world. As leaders, we connect with multiple millions of people annually. What they think, how they feel and how they behave as a result really makes a difference in the world. And it makes a difference to all of us because people -- with due respect to the rise of the robots -- remain the engine that powers the companies we lead. So, amidst this A.I. -dominated conversation, what we often hear is that leaders of major organizations worry about the intersection of technology with the human element. As Klaus Schwab noted in his recent blog: “Leaders must be much better prepared for the rapid and disruptive changes…including those affecting labor markets. [We have to] ensure the optimal use of the tremendous technological opportunities, while […] addressing the […] popular concerns.” There is an acute need for new skillsets. Mercer partners with the Forum on its Future of Jobs research. That clearly tells us the new technologies – along with demographic changes – are set to transform labor markets in the coming years.
Here’s how where it becomes real for me: my 2 granddaughters, born a few months ago, are very likely to start work in jobs that do not even exist today!
In fact, of today’s children entering preschool, 65% of them will start their employment life in a job that is nowhere to be found right now. That alone boggles my mind.
So as we think about the future complexion of our new talent, I want to use three groups in particular as fascinating examples of the change.
One growing new group of workers is older employees who would traditionally have retired. With life expectancy extending, over 70% of today’s pre-retirees say they would like to or they have to keep working beyond the traditional retirement age. Within our organizations they bring expertise and perspective. But we need to have strategies to benefit from this – we need to continually reinvent roles to keep these highly experienced older workers engaged, and create a differentiated value proposition for each generation in the workplace.
Financial organizations have been employing older bankers to help bring back some of the customer intimacy they have lost through technology. Japan has dedicated job centers for older workers, and the US has a number of projects to pair young entrepreneurs with older workers who are custodians of dying trades.
Here’s something interesting: If just half the 1.2 million older workers in the UK who are currently inactive but would like to work were to move into employment, this could boost GDP as much as £25 billion a year.
And the benefits go beyond that. Later this week, work on sizing the global pensions savings gap, where we have been the lead partner with the Forum, will be released. You won’t be surprised that the gap is large – very large. Basic demographics are the driver: we used to have close to 5 working people for every retiree aged person, and that number will decline to around 2 by the year 2040.
The second major group of different talent in our future workplaces is women. Businesses need women - it’s not just a numbers game to show social responsibility. “When Women Thrive, Businesses thrive” is Mercer research that shows many areas where we still need to make progress....the Forum’s own data says it will still take a staggering 170 years to close the gender equality gap! Unbiased systematic practices around hiring and assessing women, supported by benefits tailored to women’s needs, and strong leadership are important levers we can use to make a step change in progress.
This will become increasingly difficult as women will be disproportionately disadvantaged by technology disruption. Jobs like office work are dominated by women and they will see 10 times the number of jobs lost as compared to areas where there will be job growth such as computing, engineering and math – more typically male careers.
The final group I’ll talk about that we need to engage with differently in the future are contingent workers, or those in the gig economy. And let’s be clear: Gig is Big. At least it’s big enough for nearly a third of CEOs to rely on it as an important source of labor. Just look at some examples: in the EU, contractors are the fastest growing group in the labor market, India’s independent workforce of about 15 million fills about 40% of the world’s freelance jobs, and about 30% of today’s US workforce are independent workers.
How we think about our relationship with our growing contract workforce needs to evolve from a largely transactional state to one where we are meeting requirements in facilitating portable benefits.
Technology advancement, while a challenge for some job groups, can also be an enabler. Neuroscience and hard analytics have come together to make talent decisions more evidence based and more directly linked to right fit hiring…today.
In the EU, contractors are the fastest growing group in the labor market, India’s independent workforce of about 15 million fills about 40% of the world’s freelance jobs, and about 30% of today’s US workforce are independent workers.
Mercer has one of these tools – it’s called Mercer Match. Mercer March is a diagnostic system that can tell you, through a series of simple games played on your phone, how you index against job characteristics such as risk-taking, complex decision making and other critical factors. We are able to profile an organization’s top performers in a specific function and then find “look alike” candidates who are the most likely to excel in that type of role. One of the great powers of tools like this is that it helps with bias-free assessment and hiring. Companies and governments are also interested in determining how this might be useful in reskilling initiatives or in growing opportunities for under-represented populations. There is a card on your table to act as a reminder to play. If you do find a moment to play the games I’d love to hear whether you discover any inspiration for your next career, and also want to see if you agree with me that the red and green balloon game is definitely the most fun!
So, cultivating new talent streams can contribute to all of our economic prosperity, and clarity around what talent we’re tapping into helps us understand those very human needs of our people that we talked about up front. That takes me to another concern reflected by this audience.... engaging and retaining your people. There’s a paradox that we see more and more: A recent Mercer survey of US employees identified that over 60% of senior staff who were highly satisfied with their jobs were still seriously considering leaving.
This result brings the age old belief of a correlation between satisfaction and retention into question. Building a stronger bond with our people is key. Research suggests many things that can impact loyalty across the varied generations: Create the right culture, financial stability, hire right employees, relatable purpose, values they can be proud of.
Let’s play out one of these fabrics: financial security. Financial security or wellness is more than how many Euros or Yen or Dollars someone has, it’s about a state of being.Does someone feel like they control their month-to-month finances? Do they feel like they have the financial freedom to make the choices they want to enjoy life? In our recent financial wellness survey it was sobering to note that a third of respondents wouldn’t know where to get the money to cover an unforeseen $400 expense!
Now, if you feel like personal life issues aren’t an employer’s problem, let me share with you one statistical nugget that, as a leader of a large company, struck a chord....on average, we found that people spend 13 work hours per month worrying about money matters! So it’s incredibly obvious to me that employers who work at diminishing this distraction in people’s lives would be big winners in increased productivity, and overall increasing attractiveness as an employer of choice.
I know many of you are joining us for the financial wellness session tomorrow morning, “Mend the Gap,” so I don’t want to steal their thunder, but just one quick finding to make you thirsty for more.....
Something rather interesting is that the link between financial wellness and higher income isn’t as strong as most of us think – there’s some correlation but a solid income isn’t a guarantee – so some of our well-paid people, and presumably top performers, are among those spending the 13 hours a month distracted!
Meeting our people where they are is about closing the gaps to what they really want and worry about. It’s about understanding that health care and financial savings are completely different if you’re an older worker or an entry level employee carrying massive educational debts.
Our people’s worries are daily and real. We only have to look at an example like the pressure on the healthcare systems in places like the UK where in the last few days hospitals have become so overstressed they’re taking the sad step of cancelling urgent cancer operations for the first time, or in the US where healthcare provision is about to see more change adding to the daily concerns at large.
Economist, John Kenneth Galbraith famously said, “All of the great leaders have had one characteristic in common: it was the willingness to confront,unequivocally, the major anxiety of their people in their time. This, and not much else, is the essence of leadership.”
So, as we leave the respite of our dinner tonight and head back into the highly charged conversations on the congress center floors over the next few days, let’s reflect on the human element. It’s important for people, societies and all of us as “responsive and responsible leaders.” When you hear from political, intellectual and technological pundits over the next few days – just remember… it’s all about the people!