From the age of anxiety to an era of opportunity

Many workers around the world today have one thing in common: they are worried. The unprecedented pace of change, driven by digital transformation, has cast the old certainties aside.

Today’s working landscape is a far cry from the single-earner households and employer-for-life career models which molded traditional insurance models. The modern worker is increasingly likely to work for themselves, often for tech platforms with unconventional employment models. Ahead of them lies a maze of widely differing career possibilities stretching over the decades.

How, in this context, could anyone possibly feel secure about their future? How, indeed, can we generalize about a global workforce when circumstances vary so widely across different geographical and demographic groups?

Yet some things we do know. For example younger workers, such as Millennials and Generation Z, are most likely to worry about how they are going to pay rent and living expenses. For Baby Boomers and Generation X a greater concern is being able to secure a comfortable retirement. Women, meanwhile, are more likely than their male counterparts to fret about technological developments having a negative impact on their career prospects.

These are big questions and the scale of the research reflects that

We know this much because of pioneering research being carried out by Zurich Insurance Group in collaboration with the Smith School of Enterprise and the Environment at the University of Oxford. The study seeks to establish how individuals adapt their career and financial decisions to changing labor markets, find out the main drivers and impediments and examine the role insurance plays in this process.

“These are big questions and the scale of the research reflects that,” says Professor Gordon Clark, who co-authored the report. “We studied the working-age population in 15 countries across Europe, Asia Pacific, North America and Latin America.

“In the process we made several notable findings, which challenge us to think again about the pervasive influence of the technological revolution and who might be winners and losers in the coming decades.”

The report shows that in all countries except Brazil, women are significantly less likely to supervise other employees. This gender gap is a persistent theme, along with compelling evidence that manual workers are more concerned about becoming unemployed due to technological advances.

Alongside this, both women and manual workers are less likely than their counterparts to own income protection or term life insurance. This highlights the fundamental challenge: coming up with protection fit for purpose in this brave new world.

This is an age of huge opportunity

Stefan Kröpfl, Global Head of Life Business Analysis for Zurich Insurance, says: “We currently have a system which is set up to work on a national level and is very much focused on the traditional regular full-time employee. But there is a societal change towards a greater diversity of households – the old model of a single main breadwinner looking after a spouse and children is less common.

“For example the World Economic Forum’s Global Risks Report 2019 shows that 94% of homes in midtown Manhattan are single households. Then there is the huge rise in platform workers. In these cases they are not classed as employees, so how can they be protected by traditional models?

“This is an age of huge opportunity. If you take the example of car sharing platforms in Switzerland and the U.S., a large proportion of the people who work for them were previously unemployed. So it’s clearly a positive development that more people are working thanks to these new models, but protection models need to evolve to meet their needs.”

We are talking about a long term benefit which is not anchored just in a single employer

The solution to this dilemma has been coined as ‘agile workforce protection’. While traditionally governments provided the safety net for uninsured workers, the new employment models involve such large numbers that it is no longer a viable option. Yet they still have an important role to play in facilitating more portable insurance models: protection which individuals can carry with them throughout their increasingly varied working lives.

As Professor Clark puts it: “We are talking about a long term benefit which is not anchored just in a single employer, but actually operates in the cloud if you like. You could argue that the new models of work, such as platforms, are under-regulated but that is likely to change because companies need people – especially those who are skilled.

“Some people are going to be valuable as a consequence. Employers are going to have to invest in them. And people themselves need to feel that they have good future prospects that will encourage them to take out the kind of insurance that will help them bridge gaps in employment.”

The research is signposting a route to future prosperity. Even younger workers, who worry about paying monthly bills, are significantly more likely than their older counterparts to save. They are also far more likely to leave their job voluntarily in order to further their career elsewhere.

This would imply that, despite the global mood of anxiety (not helped by a sometimes challenging political landscape in many countries), the coming generations remain hopeful about the future.

What they need above all else is the reassurance of protection against the unexpected. This is especially true in an age when the collective bargaining powers of trade unions have been substantially blunted by changing employment models, the increasing premium on skill and the need to cultivate opportunities for those otherwise excluded from the standard model of employment based upon a married, male worker.

Much, then, rests on the successful implementation of agile workforce protection, which arguably holds the key to turning the age of anxiety into an era of optimism.

Key Takeaways:

• The youngest and oldest tiers of the workforce are the ones most affected by labor market changes so far
• Varying demographic and geographical groups have widely differing principal concerns – but almost all are anxious about the future
• People are valuable to employers – also the currently under-regulated platforms – who will have to invest in them in order to thrive in the era of digital transformation
• Collaboration between governments, companies and workers is key in carving out a new, more portable form of agile workforce protection which sits “in the cloud” and can be carried by an individual throughout their career