Alexander Burgess is director of British Money
According to the World Economic Forum’s (WEF) January Future of Jobs Report, there will be 7.1million redundancies by 2021 – mainly in the fields of management and administration and particularly in the healthcare sector. The redundancies it says will be a result of the fourth industrial revolution which heralds an increasing use of robots, big data and artificial intelligence in the economy.
The Report – which surveyed chief hr officers and strategy executives working at 350 of the largest companies in the world, spanning nine industry sectors and 15 economies - also predicts 2.1million new positions will be created for programmers and engineers. You don’t need to be a mathematical genius to recognise there’s still a gap in the figures.
The WEF believes this revolution will transform labour markets in the next five years with a net loss of over 5million jobs in 15 major developing and emerging economies. Behind healthcare, sectors facing losses are energy, financial services and investors. The industries that stand to create the most jobs are information and communication technology, professional services, media, entertainment and information professionals.
By highlighting the issues now and identifying the drivers of change, the WEF is confident it can help business leaders and policymakers equip their labour forces with the skills to navigate through the disruption caused by the revolution. The most significant driver is the changing nature of work; new technologies make ‘anytime, anywhere’ working possible.
Employers keen to embrace flexible working are moving to internet-based service models (cloud technology and mobile internet) and breaking up tasks which leads to a fragmentation of jobs. This inevitably results in a change in the skill requirements of existing roles.
In the UK, the WEF suggests 28% of the top skills mix is expected to change by 2020. Although this skills instability will impact across all industries, it is likely to be most pronounced in the financial services sector where 43% of the top skills needed across the industry will change.
The employment outlook is net positive in only five of the 15 countries covered in its Report and even then, there will be significant job churn. Why is this relevant to those working in the mortgage sector?
Because not only does the sector need to ensure customers have plans in place to enable them to continue to meet their financial commitments when facing changes in their employment, but those working within this sector must have similar strategies in place for themselves.
There’s much talk about industries evolving and innovating – and the financial services sector will be at the forefront of this – so here’s a plea, in the last column produced by British Money, allow income protection to evolve; innovate the products and e-enable them via tablets and hand-held devices so they resonate with an audience who will need some form of financial protection in the future.
In a recent software survey, nearly half of young people said they fear they will be replaced by machines at work within a decade and Deloitte suggests 35% of jobs are at risk from automation over the next two decades. Deloitte also reports jobs paying around £30,000 are five times more likely to be displaced than those paying more than £100,000.
If the writing is on the wall for so many, equipping business leaders with strategies to cope with the ‘revolution’ is to be applauded, but don’t we need financial coping strategies for the workers too?
Practical solutions not words
As we know from the latest Tata Steel announcements, failures in the UK economy are not the only drivers of job losses in this country; overseas imports have a huge impact. Falling European steel prices and a flood of cheap imports, particularly from China, has prompted a further 1050 job losses at Port Talbot. And while Business Minister, Anna Soubry, pledges the Government will work to help staff find a new job asap – will the theory ever be put into practise? A more practical solution would have come from the back-to-work support provided as part of an income protection policy.
Only ourselves to blame
Yet again, stories have recently surfaced about insurers paying only the bare minimum when it comes to critical illness claims. The first is in connection with a man in his early 30s who lost both legs and damaged his hand in a motorsports accident. The insurer has agreed to pay out on loss of limbs, but say he is not disabled enough to merit a ‘permanently disabled’ payout. This is despite the fact the former mechanic can never return to his job of 17 years because of his injuries.
The second is a middle-aged family man who lost a leg in a motorbike accident. The insurer will only pay out if both limbs are lost, leaving the bread-winner and his family facing a bleak future. In both cases, policy small print is cited and while technically the insurers may be correct, in some cases wouldn’t it be wonderful to see some humanity prevailing? And we wonder why the insurance sector has a poor reputation.
End of an era
British Money is withdrawing from the financial services sector to concentrate on other business opportunities, so we are passing the challenge of re-building the reputation of the income protection sector to one of the UK’s leading income protection brokers, Best Insurance. Best operates as a Managing General Agent, developing, designing and underwriting cover in tandem with and for insurers under delegated authority.
I’m confident their portfolio – with policies for every situation and circumstance - can re-ignite enthusiasm for this cover and protect the finances of workers who face uncertainty in the future. The singer Tracey Chapman talked ‘bout a revolution’ – it looks as if one is on its way.