small-tiles Jackson Kam | 05 Sep 2019

Over the past few years, China has emerged as a powerhouse in the increasingly digitized, e-commerce-driven world. Its digital economy accounted for 38.2% of its GDP growth in the first half of 2018,1 and it also happens to be home to 9 of the top 20 internet companies in the world, including the search engine Baidu, e-commerce behemoth Alibaba and internet services provider Tencent.2 China's success can serve as a lesson for companies and economies around the world that are pushing to remain relevant and keep a competitive edge. Policy Initiatives Help Drive Digitization   One driver behind China's success is the government's focus on shifting to a digital economy. In 2015, China's State Council, the highest organ of state administration, issued a report called "Made in China 2025." The document outlines its strategy for transforming China's manufacturing base through digital innovation. Its strategic goals include greatly increasing manufacturing digitization and "informationization." For instance, within the category of integrating IT and industrialization, the report lists a goal of increasing broadband penetration from 37% in 2013 to 82% by 2025.4 That said, the initiatives outlined have also prompted concern among policymakers across the globe.5 Some fear that an industrial policy directed by the government will include financial assistance to Chinese companies, creating an uneven global playing field. Some also worry about China's investments in foreign technology firms. At the same time, the goals and strategies outlined in the report signal that China's leadership intends to focus on ensuring the country is prepared for an increasingly digital world. Investments Are Bringing the Digital Future Into Focus   To that end, investments in research and development from Chinese companies, research institutes and the government have skyrocketed. Since 2000, it's gone from about $40 billion to $443 billion, just shy of the $484 billion invested within the U.S., according to data from the Organization for Economic Co-operation and Development.6 China is also working to minimize any digital divide between citizens in its major cities and more remote areas. Several provinces have developed plans to digitize their economies. For example, the province of Guizhou plans to grow its digital economy by 20% annually.7 The World Economic Forum also explains that, in what are known as Taobao villages, at least 10% of households run online stores for Taobao, which is the shopping site for e-commerce behemoth Alibaba. Across one such village, this generates e-commerce revenues of at least $1.6 million, and more than 1,000 of these villages dot the Chinese countryside.8 Along with financial investment, policies that enable technology companies to thrive are essential to an economy's digital transformation and success in an e-commerce world. This includes an educational model that helps students develop critical-thinking and problem-solving skills, as well as digital literacy. Moreover, education shouldn't stop once students graduate — instead, it needs to continue through training programs that help those employed stay abreast of advancing technology. Robust capital markets, solid protection for intellectual property and mechanisms to prevent and detect corruption are additional requirements for a strong, innovative technology sector. Collaboration between private and public sectors, such as programs that nurture new businesses, also contributes to a thriving digital environment. Start with Your Employees to Build a Digital Workforce   Businesses, as well as governments, can prepare for a growing digital environment and remain relevant and competitive. Somewhat surprisingly, it makes sense to focus on the workforce first and then the technology. Employees can make or break even the most advanced technology solutions. Here are three requirements for an innovative work culture: 1.  Means: This refers to the tools and authority employees need to conceive an idea, establish the right team, build the business case, and develop and test it. 2.  Motive: Organizations provide motivation by encouraging employees to think beyond their immediate job function and even take risks within a predefined framework. They can also enable them to participate, perhaps through a bonus, in any financial upside resulting from their work. 3.  Opportunity: Employees need time, tools and space for brainstorming and innovation. Agility is also key to an innovative digital workplace. Employees should feel confident collaborating with colleagues across functions and sharing ideas without encountering undue criticism. A solid budget for training will also ensure employees obtain the skills they need to contribute to their employers' success on an ongoing basis. Invest in Technology to Keep Pace with Innovation   Of course, technology plays a vital role in digital success. Constraints, such as inadequate network capabilities and legacy applications that can't integrate with new systems, have impacted the digital transformation activities for three quarters of brands, according to a survey by manufacturing services company Jabil. Fortunately, 99% are investing in new technology to replace outdated platforms that hinder their operations.9 China's rise as a digital power is the result of planning, investment and work — and both companies and countries can learn from their digital efforts and e-commerce successes. Sources: 1 China Academy of Information and Communications Technology (CAICT) under the Ministry of Industry and Information Technology (MIIT), Xinhua News, December 23, 2018, 2 Heimburg, Fabian von, "Here are 3 lessons Europe can learn from China's flourishing start-ups," World Economic Forum, September 15, 2018, 3 World Payments Report 2018," Capgemini and BNP Paribas Services, 4 State Council of China, "Made in China 2025," IoT One, July 7, 2015, 5 The Made in China 2025 Initiative: Economic Implications for the United States," Congressional Research Service, August 29, 2018,The Made in China 2025 Initiative: Economic Implications for the United States," Congressional Research Service, August 29, 2018, 6Gross domestic spending on R&D," Organization for Economic Co-operation and Development (OCED), accessed on April 1, 2019, 7CAICT under MIIT, "China's digital economy surges 18.9%, drives growth," China Daily, July 20, 2017, 8Wenway, Winston Ma, "China's mobile economy, explained," World Economic Forum, June 26, 2017, 9Digital Transformation Strategies: How are They Changing?" Jabil,


small-tiles Editorial Staff | 23 Aug 2019

Blockchain has potential to make a huge impact. Learn about fascinating blockchain trends that are emerging in 2019 and beyond. Blockchain technology was invented to safeguard the cryptocurrency infrastructure (e.g. Bitcoin), enabling secure financial transactions without the need for a bank or a middleman. But blockchain’s ledger technology is now expanding beyond digital currency and financial services, offering great potential to improve upon many areas of our lives.  As blockchain matures and becomes more accessible, companies across various industries are finding compelling use cases for blockchain to make businesses processes more efficient. For example, banks can now reduce infrastructure cost by 30% throughblockchain solutions. This is achieved by encrypting millions of storage points, none of which contain a full name or an account number.  While blockchain is currently only being used by 0.5% of the global population, emerging trends are making it more scalable. It is anticipated that 80% of the population will be using blockchain technology in some capacity within 10 years.  Because the HR department is charged with managing so much sensitive data, blockchain technology will be integrated directly into the HR function through a multitude of possible use cases—adding transparency and trust to an organization’s operations. The evolution of blockchain will also mean companies need a workforce with new skills, so HR will be kept busy with recruitment and talent management.  The following blockchain trends are lifting ledger technology from the obscurity of cryptocurrency and making blockchain part of the mainstream conversation.   1.  More potential real-world uses on the horizon will raise the visibility of blockchain.  While cryptocurrency and financial institutions are the pioneers of blockchain, it is important to note that tokenization and securing payments are just precursors to many potential real-world uses for ledger technology.  Every transaction on the blockchain is on public record and its enhanced security makes it a virtually incorruptible platform. Because no central party will ever be in control of all of the record keeping, blockchain can be used to mitigate financial, political and institutional corruption in corporations and governments, alike.  Blockchain may also be able to improve the political sphere in terms of voting systems. Because records cannot be altered in any way, blockchain is ideal for voter registration, identification and vote tallying. Election corruption and voter fraud would be eliminated, ensuring a more accurate, fair electoral process.   The general public will also be drawn to blockchain’s ability to eliminate transactions fees. Owing to decentralization, sending and receiving money can be expedited and enhanced. This has implications for automated legal procedures, customs payments, ownership transfers and business transactions—allowing widespread disintermediation across industries and economies.  Another mainstream use could be in public records of ownership, citizenship and identity. Even in the thriving digital era, these records are stored in centralized databases for security. However, this exposes them to tampering because of the intermediaries it engages. Blockchain opens up the possibility of a decentralized, public, fixed and consensus-driven ledger of records that could nullify the need for intermediaries. A groundbreaking example of this is Estonia’s E-Citizenship Program, which stores citizens’ information on a blockchain.  The application of blockchain can also be extended to include organizational information for the HR department, where one day a company can maintain one identity stored in a master Blockchain. This could be safely accessed by all stakeholders including vendors, employees, customers and tax authorities. 2.  Blockchain as a Service (BaaS) will facilitate business adoption. A Blockchain-as-a-Service (BAAS) platform is a full-service cloud-based solution that connects developers, entrepreneurs and enterprises on one platform. On the BaaS, stakeholders can develop, test and deploy blockchain applications and smart contracts. Moreover, the BaaS platform provides all the necessary infrastructure and operational support, ensuring that the applications run efficiently.  BaaS providers include major companies like Microsoft, IBM, SAP, Amazon, Oracle, and Hewlett Packard. These providers are nurturing blockchain adoption among business because the platforms enable companies to engage blockchain projects without having to spend anywhere near as much money as they would developing customized blockchain solutions independently.  As more businesses look for convenient and cost-effective ways to implement blockchain technology, BaaS collections will most likely continue to expand. Keeping an eye on the emerging BaaS space can help an HR department choose the right provider for (future) company needs.  3.  Blockchain will be less associated with cryptocurrency & possibly rebranded.  Blockchain was born and bred to protect Bitcoin’s infrastructure— but now ledger technology is leaving the cryptocurrency nest to explore more business endeavors.  Blockchain’s association with the volatile cryptocurrency market has potentially diluted its reputation. There are still negative connotations with cryptocurrencies, including wild price swings and the perceived link to people buying illegal items from the dark web.  But mainstream industries, such as manufacturing and retail, are proving the power of blockchain to improve supply chain management and ownership tracking. To break out of the cryptocurrency pigeonhole, it is expected that the blockchain industry will make a concerted effort to establish an identity that’s separate from cryptocurrency—and better educate the business sphere on the advantages it offers, beyond financial transactions.  To take the rebrand a step further, research from Forrester suggests that it might be beneficial for the blockchain industry to drop the name blockchain and replace it with distributed ledger technology (DLT).  4.  Blockchain enabled Internet of Things (IoT) systems. Gartner predicts that the number of installed Internet of Thing (IoT) will exceed 20 billion by 2020. As HR departments integrate more IoT into companies, there is growing concern because these connected devices often open the door for hackers. The same vigilance applied to computers is sometimes overlooked when ensuring the security of the IoT infrastructure. As a company’s digital ecosystem expands to include more IoT devices, they can be left vulnerable to hacks. Blockchain offers strong protections against data tampering by locking access to IoT devices and shutting down compromised devices within the IoT infrastructure if a security event is suspected.  Blockchain serves to effectively decentralize data, which provides a safety net from hacks and fraud. In the digital age, data is fast becoming the most prized asset a company has. If you store all your jewelry, cash and other valuables in one location of your home, what happens if a burglar enters your home and is able to find this location? Because it spreads data across a large network of computer storage spaces, storing records on a blockchain network is like placing your most valuable digital assets across a multitude of places to mitigate your risk of being severely impacted or wiped out by a hacking event.  One of the first blockchain IoT-specific platforms is IOTA, which provides transaction settlements and data transfer layering for IoT devices. IOTA has launched its  Tangle platform, which developers describe as “going beyond blockchain.” This serves as a blockless, cryptographic, decentralized network, where, rather than outsourcing network verification to data miners, users verify transactions of other users. Such IoT platforms promote greater scalability while also eliminating the need to pay transaction fees to data miners. These are both essential factors in a practical IoT network, which could potentially require the processing of billions of micro-transactions between devices daily.  5.  Hybrid blockchains are promising the best of public & private networks.  As blockchain rapidly comes of age, there are generally two communities that have been established. On one side of the tracks, there is a large community supporting public blockchains and arguing for decentralization. On the other side, there is a more niche community—comprised mostly of businesses and their clients—pushing for private blockchains operated by a single entity that also grants permissions to users.   Traditional blockchains (e.g. Bitcoin and Ethereum) are public and completely open, meaning anyone can join the consensus protocol and participate in maintaining the shared ledger. Users often join public blockchains because, apart from operating in a decentralized system, they can offer incentives for mining or staking.   But public blockchain have limitations, including visibility. Data is completely transparent so anyone can access it, presenting a privacy concern for many uses. In some blockchain use cases, data would need to be restricted and a public blockchain cannot do this. Public blockchains also demand high computational power and consume large amounts of electricity. There are also scalability concerns for public blockchains because the consensus protocol places limits on speed and the number of transactions it can process.  Private blockchains operate similarly to public blockchains with an important exception: they are not open to everyone and require an invitation to join. These blockchains are also permissioned networks and can be customized to interact with certain users differently than the general users. Unlike in the public blockchain, provisions can be outlined to determine who is allowed to participate in the network and what specific transactions they are authorized to conduct. While private blockchains address some data security concerns, the main drawback is that they are not as decentralized as the public blockchains.   To build a bridge, hybrid blockchains are being developed to offer decentralized platforms that can restrict visibility of some information on the network. In particular, this model is appealing to regulated markets because it offers the benefits of public and private blockchains in one network.   Through a hybrid blockchain solution, a company can conduct transactions from certain short-term partners and vendors on the public blockchain side. Since the transaction timeline of these partners is shorter, public blockchain is an ideal solution. It would not require the level of trust needed with a private blockchain. The private side of a hybrid blockchain solution can be used to conduct transactions with long term partners. It would operate with a classic permissioned setup, where authorized parties can view, transact and make changes based on permissions they are given. This private network is fast, scalable and secure. However, adding more parties and establishing their trust takes longer than on a public blockchain so it would only be reserved for transactions with designated users.   6.  Sidechains are improving scalability. For all their power and complexity, blockchains face challenges in scalability and speed. These limit some applications of the relatively new technology. One solution that seeks to improve blockchain efficiency and scalability is the sidechain. As its name indicates, a sidechain is a type of blockchain that accompanies a master chain. In the relationship, the master chain is the parent chain and the sidechain is the child chain.   In order to trade assets from the master chain for assets from the sidechain, the user would first need to send their assets on the master chain to a certain location. This would effectively place a lock on the assets for the time being. After the transaction completes, the sidechain would receive a confirmation and release a designated amount of the sidechain to the user—equivalent to the amount of assets locked up by the main chain times the exchange rate. This also works in reverse to trade assets from the sidechain to the master chain.   As sidechains store data and process transactions, they help to uphold the integrity of the master blockchain while making it smaller and more agile. When implemented correctly, sidechains relieve the master chain of some of the work, helping to solve the inherent scaling problem associated with blockchain solutions. Sidechains have practical applications for stock exchanges.   7.  Artificial intelligence (AI) & blockchain are teaming up.   While both AI and blockchain involve high levels of distinct technical complexity, there is potential for these two technologies to team up and score major technological victories in the next five to ten years.   The first change win might be in optimizing data management. Blockchain currently relies on hashing algorithms for data mining and these operate in a brute force style, meaning the algorithm inputs all possible sequences of characters until it finds the one that matches with the verification process. This demands extra steps, lags and effort. AI can step in to offer an intelligent data mining system that streamlines the entire process and cuts down total costs exponentially. This streamlining also has implications for improved energy consumption for blockchains.   AI can infuse natural language processing, image recognition and multi-dimensional real-time data transformation capabilities into a blockchain’s peer-to-peer linking. This allows data miners to turn a large-scale system into a series of micro-economic environments. In turn, this can optimize data transactions in a secure and effective manner. Most importantly, machine learning intelligence adds flexibility to the process.   On the flipside, blockchain’s data decentralization technology can help AI step up its game in creating better machine learning models. Introducing secure data sharing across systems, which have traditionally stored and operated data in an isolated manner, introduces higher quality data. Richer data means better models, better predictions and better insights.   Data decentralization will offer companies of all sizes access to analytics and insights they could not possibly generate from an individual data source. When AI’s deep learning algorithms gain access to multiple data points from multiple data pools that have been standardized by blockchain, the competitive advantage of an AI technology will no longer be about finding the data itself. Nor will it be about having the resources and funds to gather the most data. Instead the focus will be on writing the most innovative algorithms. This evolution ushers in a new era of scalability for deep learning where AI finds itself in new marketplaces, opens doors for smaller players and gains trust with the public at large.   The future looks bright for blockchain and it will likely innovate business processes in many industries, including human resources. However, its widespread adoption and full potential have yet to be seen. The next phase of development for blockchain will be in addressing scalability and accessibility challenges, which will pave the way for more applications and varied use cases across more industries.   Amid the rapidly evolving digital landscape, one thing is clear: blockchain is in a state of metamorphosis with many disruptive trends on the horizon. For HR professionals, it is important to keep an eye out on how this nascent technology is impacting various industries and making its way to the world of work.  


small-tiles Editorial Staff | 17 Aug 2019

There is a huge opportunity for blockchain to establish itself in the healthcare sector. Learn more about specific use cases that can help innovate how HR departments deliver healthcare & wellness benefits. Blockchain technology is one of the most disruptive technologies on the market today, with multiple industries adopting it to optimize processes and innovate the way companies function. It has proven to be a game changer in the business arena and the global blockchain technology market is estimated to amass US$20 billion in revenue by 2024. Meanwhile, SAP reports that 71% of business leaders who are actively using blockchain believe it plays a key role in advancing technology and reestablishing industry standards.  While blockchain has already been widely integrated in processes for supply chains, banking and cryptocurrency (e.g. Bitcoin), the healthcare industry has also been identified as one of the top industries likely to be disrupted. Blockchain technology could offer solutions to some of  healthcare’s greatest challenges, from securely managing patients’ medical data to tracking large databases of drugs through the supply chain or extracting healthcare data from clinical trials. As the technology advances and becomes more readily available, more healthcare organizations across the industry will be adopting blockchain solutions to redesign the global healthcare ecosystem.  HR serves a critical function for the healthcare industry and is an intermediate between employees and one of the most valued aspects of life: their health. According to Bitfortune, 55% of healthcare applications will adopt blockchain platforms for commercial deployment by 2025. Meanwhile, adoption seems to be ramping up with multiple governments around the world announcing plans to invest in blockchain and encourage its implementation. For example, Singapore’s government has announced financial incentives to enterprises for adopting the technology. Amid an evolving industry, it is imperative HR professionals stay current with how blockchain’s ledger technology is disrupting the healthcare industry. They should especially keep a pulse on the implications blockchain holds for delivering the employee experience with improved healthcare and other benefits. Use cases: how blockchain can help HR transform in delivering healthcare & benefits   While the use of blockchain technology is still more commonly associated with payment functions, its disruption to HR will be profound and pervasive in coming years with many possible use cases across the functions of an HR department. To prepare for the coming blockchain revolution, HR departments should focus on identifying problem areas and inefficient processes that could be addressed by the transparency, accuracy and speed that blockchain provides. The processes most primed for blockchain disruption are those that are burdensome and expensive with substantial data collection and third-party verification. For this reason, healthcare and benefits could be the ideal match for an HR department looking to adopt blockchain technology. 1.  Enhancing fraud prevention & cybersecurity for sensitive data in HR. HR teams conduct some of the highest-volume financial transactions for an organization and handle sensitive employee data related to healthcare (as well as, banking, disciplinary records, performance records, expense reimbursement, and more). Unfortunately, all of the data an HR department maintains is at risk of being exploited and, as more companies face data breaches, it is becoming increasingly important that proper measures are in place to maintain security and prevent fraud. A company’s cyber risks largely emerge from an underlying lack of transparency and accuracy in its data systems. Because of its capacity for promoting transparency and accuracy, blockchain technology is being lauded as a solution for combating cybersecurity crime and protecting data. While blockchain’s popularity grows among large companies and companies that hold critical, sensitive data (for example, Lockheed Martin is trusting it to secure data), it is also being used by nonprofits to collect donations securely. It is important to consider that blockchain technology can mitigate both internal fraud and external hacks of sensitive employee records. Access to the blockchain is limited and controlled—even those who have access are not able to modify the records. This limits both internal fraud and external hacks of sensitive employee records. In the digital age, data is a major asset for a company. Blockchain essentially functions to decentralize data and places it across a large network of computer storage spaces to reduce the risk that a single hacking event could usurp all the data a company has. By using blockchain, HR departments can introduce a solid measure of security against cyber threats to protect their employees’ health information. 2.  Improving health insurance, health records & patient experience with ‘smart contracts.’ Much of blockchain’s power comes in the application of ‘smart contracts’, which many organizations are using to make payments to employees, contractors and vendors. In fact, it is reported that 45% of early adopters of blockchain are already implementing smart contracts within their organizations. A smart contract codes a set of parameters using statements in ‘if this, then that” (IFTTT) language. These contracts are designed so that, once executed, the entire process is dictated by these codes. It is also made irreversible unless of course terms of a contract need to be updated. While smart contracts have many applications for HR functions in terms of payroll, there are some very important considerations HR departments should be aware of in terms of healthcare. Smart contracts have the potential to be used for insurance, including how patients buy insurance. Through a smart contract, all details of an insuree’s policy could be stored in a patient profile. This profile would then be stored on the blockchain platform in a safe and secure ledger that is less prone to hacks than the databases currently used.  Smart contracts could also impact the insurance claim process by eliminating the need for lengthy forms and time lags. If an insuree undergoes a medical procedure covered by the policy, a smart contract would be automatically triggered to transfer money from the insurance company’s account straight to the hospital or medical provider. The automation cuts out delays and hassles, allowing for correct payment of the medical service. There are also numerous implications for electronic medical records, information and medical data sharing. Storing patient’s electronic health records (EHR) on secured ledgers, for example, would allow a patient to move easily from one hospital to another without having to fill out numerous forms. The blockchain network would safely store their records, allowing their new physician to access them without delay. While hospitals and healthcare providers currently rely on a number of databases filled with patient data, these can be too centralized and restrictive for sharing potentially life-saving insights around the globe. If health records were to be kept in a smart contract stored on the blockchain, the data analytics would be available to hospitals, providers and research institutions everywhere. With widespread adoption of this healthcare blockchain technology, an individual could essentially walk into any hospital in the world for treatment and, with their private key, their health data would be accessible instantly. 3.  Offering better access to healthcare & other benefits. Blockchain’s ‘smart contracts’ could also change how employees gain access to healthcare and benefits. Once the employer outlines the terms of employment prior to hiring, HR is charged with upholding the conditions in the contract. These terms include provisions that employees value in their employee experience, such as healthcare insurance, wellness programs or other benefits. The current model of manually delivering benefits runs risks of errors and could get in the way of properly servicing employees. With blockchain, HR could seamlessly deliver upon these benefits by implementing smart contracts that automate the process. For example, if a company outlines that an employee’s benefits packages begins after a specific waiting period, the smart contract would be written to automate these benefits at the right time and in the right fashion. Not only does blockchain have the potential to improve security and automation of benefits, it is possible for benefits to be more personalized to each individual employee. In today’s digital world, consumers are accustomed to enjoying personalized experiences and this trend of hyper-personalization is reaching the workplace. Through blockchain’s smart contracts, which could be integrated with artificial intelligence (AI) and IoT technology, companies would be able to empower employees with benefits packages and wellness programs that are tailored specifically for them and their evolving needs. These personalized packages could become a critical tool for enhancing the employee experience. Challenges HR faces in implementing blockchain to deliver benefits   Blockchain is a quickly evolving technology with new applications and trends regularly emerging. Though it is becoming more widely adopted across a variety of industries, it is inevitable that first-time users will run into issues and challenges in implementing it. For HR departments, it is imperative to consider these challenges as they explore which processes might be impacted by blockchain. 1.  Data standardization & integration with legacy systems. With blockchain being a new technology, protocols and standards for its application are not yet established. When the internet began to commercialize, it initially struggled without proper protocols. But over time, controls were implemented to allow for browser compatibility, cross-platform multimedia and better interconnectivity between servers. As more sectors adopt blockchain—especially healthcare which handles sensitive and personal data—ensuring that blockchains offer an industry-wide benefit will require widespread collaboration and standardization. For example, it will have to be determined when private, as opposed to public, if blockchains make sense. Otherwise, this could impact the security and functionality of blockchain technology. All industries will have to get over a major hurdle when it comes to integrating blockchain solutions with legacy systems—or replacing legacy systems altogether. But the hurdle is especially high for HR and healthcare, which are often bound to specific legal regulations and already have very specific HR or healthcare systems in place that incorporate these parameters. Synching these systems or replacing them with blockchain technology could prove to be difficult. 2.  Adoption & incentives for participation. Despite enthusiasm and a strong record of success, blockchain adoption has proven to be difficult for companies. Greenwich Associates surveyed companies that have implemented blockchain and 57% reported its integration has been harder than expected. In terms of scalability, 42% of respondents reported it as a major issue, 39% said it is a minor issue and 19% said it is no issue at all. Much of the challenges are culture or people-related, rather than technical. For example, most people resist change and, if they do tolerate it, they generally prefer it to happen gradually and incrementally. The oppositions to change could be even more pronounced for those in HR, especially with employees across an organization resisting how healthcare and employee benefits—which are very personal—is administered. Some of the proposed uses for blockchain would result in systemic changes that rapidly transform the entire system. Even if employees and management are open to change, HR still has work cut out in hiring, education and training. Blockchain will require companies to hire more research and analytical staff as well as offer training on how to properly implement it. But this is where HR thrives. By helping to cultivate a culture of digital transformation, HR departments can also guide companies on their blockchain journey. 3.  High costs of developing & operating blockchain technology. The adoption of blockchain technology is likely to offer long-term benefits in regard to productivity, efficiency, timeliness, and reduced costs. However, one of the greatest obstacles to widespread adoption of blockchain is the high cost to initially install it. The software required to implement blockchain within an organization must typically be developed specifically for each individual company. This makes it expensive to obtain, whether hiring in-house or buying from a developer. Moreover, even after the blockchain software is developed, the company would also have to purchase specialized hardware to be used with it.  In addition to the software development costs, companies must also find qualified personnel to operate the technology.  The blockchain space is new and growing so rapidly that the demand for professionals in the field outweighs the supply. This makes hiring qualified blockchain experts—either in-house or as consultants—quite costly. Currently, it appears that the world’s largest corporations are the only ones benefiting from blockchain because they have the money, resources and data to spare. Furthermore, the technology itself seems too new and not yet fully understood for SMEs to adopt in droves. However, this is all likely to change over time. The commercialization of the internet was gradual and in the early days it required companies who wanted to go online to put up a substantial amount of money upfront and invest in customized solutions. Eventually, as blockchain becomes more mainstream, it will also become much less expensive, more streamlined and more accessible to companies. Blockchain is already demonstrating its potential to disrupt business as we know it. Because the HR department guards and manages large amounts of sensitive data that are critical to employees’ lives and how a company operates, it is likely that blockchain technology will be infused directly into the HR function to add transparency and trust to various processes. Healthcare and benefits administration is one of the processes that blockchain technology is likely to directly transform. Though there are challenges in cost, scalability and perception to overcome, HR departments could potentially use blockchain technology to provide employees with greater access to more personalized benefits packages. Furthermore, as time is freed up by automated processing, HR departments will be able to turn their efforts to more value-adding activities such as building employee engagement and experience.


small-tiles Editorial Staff | 09 Aug 2019

Digital transformation is here and it is disrupting HR functions in various ways. Learn about the latest digital transformation trends emerging in 2019. The digital transformation is well under way with over a third (34%) of businesses already implementing digitalization programs, representing a 30% increase over last year. Meanwhile, two-thirds of global CEOs report they will embrace a digital-first focus by the end of 2019. In recent years, digitalization has profoundly enhanced the customer experience to drive more value for brands. But digital transformation is transcending the customer experience to impact the employer experience as well. Employees, who have become accustomed to the digital experience in their personal lives, are increasingly expecting to have a digital relationship with their employers as well. This shift has implications across the human resources function, including recruitment, onboarding, training, L&D, and more.  The following digital transformation trends and new technologies are disrupting the business model for companies of all sizes, across various industries. But these innovations also represent unprecedented opportunities for HR leaders to improve the employee experience and better adapt for the future of work.  1.  Blockchain adoption is increasing. While just 0.5% of the global population is currently using blockchain technology, its popularity is rising and it is projected that 80% of the population will be engaged with blockchain technology in some capacity within 10 years.  Blockchain technology is perhaps best known for its role in safeguarding the cryptocurrency infrastructure (e.g. Bitcoin)—but ledger technology is leaving the cryptocurrency nest to explore more business opportunities. As the technology matures, companies across various industries are reporting compelling use cases for blockchain. For example, banks can now reduce infrastructure cost by 30% through blockchain solutions. This is achieved by encrypting millions of storage points, none of which contain a full name or an account number. Because the HR department is the guardian of so much data that is critical to employees’ lives and how a company operates, the human resources space is welcoming blockchain for cybersecurity reasons. Ledger technology will likely be integrated directly into the HR function through a multitude of use cases—lending transparency and trust to an organization’s operations.   Despite current challenges in cost and scalability, the case for blockchain HR is strong. To prepare for the coming blockchain revolution, HR departments should focus on identifying pain points and inefficient processes that could be improved by the transparency, accuracy and speed that blockchain facilitates  The processes most suitable for blockchain disruption are those that are burdensome and expensive with substantial data collection and third-party verification. For this reason, healthcare and benefits could be the ideal starting point for an HR department looking to adopt blockchain technology. The healthcare industry has been identified as one of the top industries likely to be disrupted by blockchain and, according to Bitfortune, 55% of healthcare applications will adopt blockchain platforms for commercial deployment by 2025. HR departments will therefore need to keep a strong pulse on how blockchain is impacting the healthcare landscape so they can continue delivering healthcare plans and wellness programs to employees. As blockchain technology becomes more mainstream and accessible, it is possible that many processes of daily workflow will transform: recruitment, tapping talent pools, running background checks, verifying employment history, engaging contract workers with smart contracts, onboarding, maintaining employee data, maintaining employees’ personal data, handling financial transactions and managing payroll systems.  2.  Businesses are investing in cloud platforms. Cloud computing and its various functions have been a hot topic for the human resources industry. It is not a relatively new technology but still the forecast is calling for more clouds. By 2020, a staggering 83% of global enterprise workloads will be stored on the cloud.  For the HR space, cloud’s success is owed to its acclaimed ability to organize data, centralize processes, scout high-quality talent and boost performance. But most importantly, cloud computing lends transparency to an organization’s processes and can subsequently enhance the employee experience, from the recruitment process all the way through to L&D and exit interviewing.  The traditional recruitment process can be rather tedious, requiring the company to advertise the position, shortlist candidates and conduct interviews. Cloud computing streamlines at least some of the process, offering everyone in the department immediate access to the data about a candidate. Feedback can be shared and decisions can be made using cloud software, all with the click of a button.  The implementation of a multicloud ecosystem can also automate several HR processes for employees that include large amounts of data such as timesheet submission, performance reviews and vacation requests. Employees can take ownership of their employee data forms through the cloud, including tax information and emergency contacts. Many companies are also using public clouds to automate employee signatures on various documents, such as employee handbooks, sexual harassment training, L&D, webinars, etc. Performance reviews are also being managed on the cloud, offering employees better access and insight.  Automatic software updates are another benefit of the cloud and these can simplify compliance. The HR department is often required to generate several comprehensive reports at specific intervals of time. Paperwork, time and hassle can be reduced by having the cloud software’s process automation generate these reports instead.  Cloud computing technology is inherently developed with security woven into its DNA. By replacing physical filing cabinets, data can be protected from theft or natural disasters. For example, if a company’s office were to become inaccessible due to flooding, employees would still have remote access to the programs they work with on a daily basis. Furthermore, data would be protected.  3.  Conversational User Interface (UI) & chatbot experiences are improving. According to Gartner, by 2021 more than 50% of enterprises will spend more per annum on bots and chatbot creation than traditional mobile app development. And, as other conversational UIs improve on voice recognition and reasoning frameworks, their understanding of the user’s needs and wants will also grow.   HR departments are engaging chatbots and other conversational UIs to streamline processes and eliminate redundancies. These technologies can provide employees with immediate and consistent answers to commonly asked questions related to holiday leave, compensation, benefits, company policies and legal rights. Even some aspects of recruitment, employee reviews, onboarding, benefits and L&D can be assisted by chatbots and other conversational UI.   Nudge-based technology is being implemented in tandem with conversational UI to suggest behaviors for employees and subsequently improve workflow. For example, a software program can monitor employee activity at a computer workstation and, after a certain amount of time, send a message to the employee that it might be time to take a break. Nudge-based technologies can also be used in lieu of repetitive communication from the HR department. Automatic reminders can even be sent to managers to fill out performance evaluations, with conversational UI then stepping in to assist with that process.  As self-service platforms, the conversational UIs free up time for both employees and employers while still delivering the right information at the right time. This HR technology also allows the team to focus on more urgent questions and complex issues that require special attention. 4.  Data & people analytics continue to be important. Information as a critical business asset is still in the infancy phase, making it a competitive differentiator for companies as they transition to the digital age. For leading companies, big data and analytics are becoming strategic priorities and key drivers for digital transformation initiatives. While fewer than 50% of documented corporate strategies currently cite data and analytics as fundamental elements for enterprise growth, Gartner predicts that this number will jump to 90% in 2022.  The importance of a  . data-driven culture is being especially emphasized in the world of work. For years, people analytics was mired in complexity. But today it is being leveraged as a critical people management instrument that can be applied at every level of the HR function, ranging from the recruiting process all the way to talent development and exit interviewing.  For recruitment, people analytics can increase the chances of finding the right people for the right jobs. It can also be useful for building employee engagement and satisfaction, as it cultivates data about employees’ attitudes and moods. People analytics can also facilitate collaboration within an organization, providing insights about how well certain people and groups work together.  When it comes to performance management, people analytics helps eliminate the human bias that often comes with manual evaluations. It also allows for an evaluation of both the process and outcome, which can help HR teams distinguish variables (such as luck or coincidence) from real, applicable skills that an employee has.  It’s important to note that people analytics is more than just data—it can be translated to guiding insight. With new analytics capabilities, HR teams are unearthing deep insights into the company’s organizational health. In turn, this insight can be used as a basis for proactive programming and support. Overall, people analytics helps cultivate a digital culture where decisions are informed by data.  5.  Internet of Things (IoT) adoption is accelerating. As digital transformation progresses, we are connecting more devices to the internet at home, at work and on our person. Thus, the market for the Internet of Things (IoT) is flourishing.  For HR, the starting line for IoT integration is usually with mobile smartphones and tablets—central hubs in IoT. In our personal lives, these devices offer centralized, easy access to our personal data and allow us to carry about a lot of our business. For example, we can share our thoughts on social media, communicate with friends via SMS and even buy products on our mobile devices.  Employees are increasingly expecting to migrate their work onto mobile devices, demanding access to data, analytics and communication. This helps employees and employers alike by enabling continuous performance management and a flexible workplace where employees can be productive no matter where they are.  Employers have leveraged IoT to drive health and wellness initiatives. As companies recognize that healthy people perform better and are more engaged, they are taking measures to help encourage wellness and offering employees devices like smart watches, heart rhythm trackers and similar devices. These fitness trackers are not intended to track where employees are but how they are.  IoT can be being leveraged by companies to enhance employee engagement and improve productivity. But as IoT in HR advances, companies are also delving into the data provided by user devices. If gathered collectively, the cumulative data becomes a great source of information for the company. 6.  Artificial intelligence & machine learning applications continue to increase. Artificial intelligence (AI) and HR may seem incompatible at first—it is ‘human’ resources after all—but the HR department is increasingly steered by non-human capabilities. A slight majority (51%) of companies have already deployed AI and machine learning and there are a variety of trending use cases for HR.   With AI, employers are in a position to greatly improve the assessment of candidates. For starters, a notable feature of AI is its potential to mitigate the effects of unconscious bias in the hiring process. With AI, candidates are sourced, screened and filtered through large quantities of data. The programs combine data points and use algorithms to identify who will likely be the best candidate. These data points are looked at objectively, completely removing the biases, assumptions and oversight that humans are susceptible to. Virtual reality (VR), by placing candidates directly into in virtual situations, can potentially provide more insight about a candidate than what is written on their resume or what they say in an interview. This can reveal candidates’ capabilities as decision makers and lead to assessment based on behavior and action rather than words.  Meanwhile, machine learning tools can help with recruitment by tracking a candidate’s journey throughout the interview process. HR tools can calculate a holistic score for new talent, drawing data derived from digital screening and online interview results. This score system can help hiring managers objectively arrive at decisions based on data.  On the opposite end of the interview table, machine learning tools can also help deliver streamlined feedback to applicants much faster and objectively than manual methods can.  Augmented reality (AR) could be implemented to transform the employee onboarding experience into something fun and interactive. Employees might start the job with an AR tour of the office where information about key locations, company history and colleagues pops into view as they move around.  Machine learning also has implications for employee retention. HR is charged with courting top talent so they stay with the company and this often involves identifying risk attrition. Through advanced pattern recognition, machine learning draws from an array of variables to recognize attrition risks and patterns in a company’s workforce. These pertinent variables can include years at company, satisfaction rates from surveys, education, department, time at company, training times, time since last promotion, attendance, etc. Once an employee is identified for possible attrition, the HR department can act accordingly.  When it comes to assessment and development, L&D programs can be boosted by machine learning to identify high-potential employees with the skills and qualifications the company needs. Notably, it has been found that the employees ranked highest by the machine learning software aren’t usually those on the promotion track. Instead these high potential employees may be overlooked by traditional methods of assessment.  7.  The rise of headless architecture. In today’s competitive, customer-centric business environment, the race is on for organizations to deliver innovative, personalized customer experiences across various platform. This omnichannel movement is impacting digital content publication and giving rise to “headless architecture” in website design.   In traditional approaches to digital publishing, the front-end and back-end are tightly bound to each other. But in the headless model, they are decoupled and instead communicate through an application programming interface (API). With just one back-end in place, multiple front-end delivery systems can be developed to seamlessly publish the content on various channels such as desktop, mobile and IoT devices. Headless offers more flexibility and choice, allowing companies to choose the front-end framework that makes sense for them. Furthermore, because the headless architecture model keeps the back-end and front-end separated, companies can easily upgrade and customize digital assets without compromising the website’s performance. Digital assets can accumulate as the company grows.  By offering the freedom to innovate, headless architecture can help companies reinvent user experiences as needed. This also helps to future proof their websites because they can revamp the design without replacing the entire content management system. It allows them to migrate existing content already on the platform and integrate it with new tools and frameworks as they emerge.  As the voice for human capital, amid a rapidly evolving workforce, HR plays a critical role in guiding a company’s digital transformation journey. After all, effectively integrating new digital technology requires the right people in the right positions. Despite disruptions from AI and automation, the world of work remains people-centric at its core.  As employees continue to demand a more experiential and omnichannel approach to work, HR teams must be deeply involved in a company’s digital transformation strategy. Keeping pace with  digital trends will help HR do what it does best: merge the best in human skills with state-of-the-art digitalization to create a vibrant, enriching workplace.

Editors' Picks


Pivot to Growth: How AI Is Democratizing the Future of Work
Gail Evans | 25 Jul 2019

The power of AI will shape the future of work and optimize productivity. As digital transformation continues to accelerate business operations, our work and personal schedules are becoming increasingly integrated. Never before have parents, professionals and entire communities of people been forced to harmonize such escalating demands on their work and private lives. Orchestrating the responsibilities of modern life can feel daunting. Raising healthy and well-adjusted children, supporting a struggling partner or friend, impressing your boss and coworkers, and not purchasing those chocolate chip cookies (who has time for dinner?) can overwhelm the human soul. Thankfully, AI platforms are not only changing how professionals organize information and interact with data, but how they navigate the challenges of everyday life. Introducing Warren   Warren, Mercer consulting's AI digital assistant, is a sophisticated AI platform designed to leverage real-time data with learned patterns to enhance workforce productivity. It works 24/7 to ensure your personal and professional obligations are well organized and your career trajectory is moving forward. It does this by contextualizing data from your past, present and future and streamlining your responsibilities and schedule in ways that encourage better decision making. In other words, Warren is your dedicated personal coach, confidant and teammate — the ultimate convergence of people and technology. Every day, people struggle to maximize the value of their time. Too often, our work is undermined by inferior data that results in poor choices, inefficient scheduling and time-consuming distractions. Many people lack the time or resources to adjust to inevitable changes in our pressing daily priorities. Warren is here to help people focus on what is most important, when it's most important. It's less about how tech informs us and more about building a hybrid existence of machines and people working together. You bring the human element to the relationship with your creativity, strategic thinking and empathy, and Warren augments your human capabilities by suggesting recommendations based on designated goals and targets. It then makes adjustments according to previous conversations with you. All professionals, not just those at the top of the hierarchy, deserve a personal assistant to help clear their headspace. This democratization of the workforce due to AI will revolutionize how ideas come to fruition and businesses grow. The days of compartmentalizing your personal and professional lives are gone. Warren allows you to prioritize and immediately address anything life throws at you: Your child's school principal expects you to answer the phone at 1 p.m. on a Tuesday, and your boss emails you at 8 p.m. on Thursday night anticipating a quick reply. No problem. Warren is here to help you thrive in a world that demands so much of your time, energy and sanity. Warren will take it from here: No, your child does not have a peanut allergy. Yes, you have briefed the team about the sales meeting and printed the glossy reports for each stakeholder. Done and done. Modern life is a fully integrated experience without boundaries. Welcome to the new normal. Work at the Speed of AI   Working at the speed of AI means never having to ask yourself if you left the stove on, the location of the room for your 9 a.m. meeting or the accuracy of the data in the graph illustrating last quarter's output numbers. Forget reminders taped to your computer, those awkward moments in conference rooms when your PowerPoint presentation won't load and having to memorize yet another password. Say goodbye to staring into your glass of red wine late at night and wondering if you're a good parent. You are because Warren reminded you not to schedule that important call with the Hong Kong office during your daughter's debut as the Cheshire Cat in her school's rendition of "Alice in Wonderland." Warren recognizes your human idiosyncrasies and fallibilities. It fact checks and performs quality control for each step of your busy day. Every aspect of your professional life will be optimized through AI technology, which consequently, will profoundly increase the quality and enjoyment of your personal life, too. By predicting and mitigating our own very human mistakes and lapses in judgement, AI can make the human experience more meaningful, rewarding and impactful. Just as email, instant messaging and in-person video calling has changed the way people communicate with others, Warren is changing the way people communicate with themselves, their work duties and their entire careers. An Era of Democratized AI   As businesses pivot to growth, people will increasingly have the freedom to think beyond the minutia of day-to-day obligations and dedicate that found time, brain space and capacity to keep looking and moving forward. In the workplace, Warren empowers change at every level of an organization, which will forever alter the dynamics of influence and flow of ideas. No longer will the big ideas and future-thinking changes come from the top down. From the CEO, the summer intern and the stately boardroom to the bustling mailroom, groundbreaking solutions and cutting-edge revelations will arise from everywhere. Through the democratization of AI, the people closest to the products, solutions and services will finally have the necessary time and capacity to think through improvements and invent the next best practice or idea. AI will inspire employees at every level to think smarter and faster, drive game-changing strategies and identify new ways to co-create and innovate. Warren and other AI technologies will enable employees — regardless of title, level or rank — to grow personally and professionally. The future of work, much like in the past, will be defined by access to information and opportunities, as well as the integration of technology and human potential. AI now presents businesses with a universe of unprecedented possibilities, and employers must do everything they can to empower their people to compete in the future and continue to provide value to the company. Warren is AI's version of a dedicated collaborator who barely sleeps, only deals with facts and accurate data, and will never steal your lunch from the refrigerator. Finally, Warren is a colleague for a new era of people, technology and the symbiotic workforce.


Navigating the New Era of Automation
André Maxnuk | 25 Jul 2019

Artificial intelligence (AI) and automation are global main-stage players in many industries, with seemingly limitless opportunities. You can have your food made by robots, or even let your car do the driving for you — but what's next?1 This upward trend has been far-reaching, disrupting the ways certain industries operate and shifting how employers hire. With no slowdown in sight, let's explore what's in store for businesses navigating this new era. Automating Jobs in Key Industries   Automating work isn't a one-size-fits-all approach. Certain industries, firms and jobs are more likely to be impacted than others. For instance, manufacturers have long used this approach and tend to seize automatable opportunities whenever possible. Take the South Korean Ministry of Trade, Industry and Energy for example, which has been investing money into the development of industrial automation for the past few years and shows no sign of stopping.2 This is just one country, but it represents the direction of the industry and process overall — the goal is to keep costs low while maintaining efficiency. The auto industry has seen similar gains within the manufacturing process, as well as in the production of self-driving vehicles. While there have been fits and starts with this tech, The Verge notes that it's being continuously refined and may soon change automobile production entirely.3 While these industries serve as golden examples of what AI and automation can do, others struggle with implementing key functions of this tech. Hospitality, food service and health care all exemplify this lag: These industries are heavily driven by labor, which makes automating operations tricky. While there are opportunities to embed technology to scale services, not every customer in these industries is ready to have their service automated, as aptly noted in a recent CNN news story.4 Measuring the Impact on Economies and Employment   The idea that artificial intelligence will eliminate jobs is a real fear for workers. It echoes concerns previously heightened in the U.S. in the 1960s regarding the bump in automated processes and unemployment, as MIT highlights.5 However, Lyndon B. Johnson said it best: "The basic fact is that technology eliminates jobs, not work." This distinction and how employers handle role changes is what will make or break many organizations shifting to automated operations. For developing economies, automating certain jobs could create better opportunities by eliminating dangerous roles or roles that rely too heavily on physical labor. While it may cause some degree of unemployment during the short-term transition, it's likely to open opportunities for other safer, more satisfying jobs for those affected individuals. It all comes down to a shift in workplace skills. Research shows that the future skills of the workforce should prioritize leadership and other soft skills to remain relevant and competitive. In a recent interview, the CEO of LinkedIn explained the most important skills of the future aren't coding or technical; they're soft skills, such as communication and collaboration, and the workforce will need to readily prioritize these as automated operations grow.6 Aging in an Automated World   The intersection of an aging workforce and increasing automation is a very real threat to today's workers. Those with 30 or 40 years of experience are more likely to be doing tasks that can be automated — a fact that is only more troubling when examined on a global scale. In certain areas, such as Vietnam and China, between 69% and 76% of tasks managed by older workers are at risk of becoming automated. For reference, in the U.S., jobs held by more senior workers are believed to be about 52% automatable. What's also potentially worrisome is that older populations of workers in areas, such as Japan, are growing rapidly, creating a spiraling effect. The good news is employers are responding by eliminating forced retirement and looking for additional options to alleviate this pressure. Automation is bringing an incredible amount of positive opportunities into the workplace, but it's important not to lose sight of those who may be negatively impacted. Whether that means prioritizing training in soft skills to ensure a more "future-proof" workforce or looking for more appropriate ways to leverage automated work in highly manual jobs and industries, the truth is this trend isn't going away. Competition and globalization will continue to push employers to find new, creative ways to automate processes, but those who seek visionary ways to reshape their workforce around this technology will have the real competitive edge. Sources: 1 Constine, Josh, "Taste test: Burger robot startup Creator opens first restaurant," Tech Crunch, June 21, 2018, 2 Demaitre, Eugene, "South Korea Spends $14.8M to Replace Chinese Robotics Components," Robotics Business Review, October 20, 2015, 3 Statt, Nick, "New documentary Autonomy makes the convincing case that self-driving cars will change everything," The Verge, March 13, 2019, 4 Andone, Dakin and Moshtaghian, Artemis, "A doctor in California appeared via video link to tell a patient he was going to die. The man's family is upset," CNN, March 10, 2019, 5 Autor, David H., "Why Are There Still So Many Jobs? The History and Future of Workplace Automation," MIT: Journal of Economic Perspectives, Vol. 29, Issue 3, summer 2015, 6 Umoh, Ruth, "The CEO of LinkedIn shares the No. 1 job skill American employees are lacking," CNBC, April 26, 2018,


Asia Must Navigate Pensions Crunch
David Anderson | 03 Apr 2019

Asian pension systems are facing major challenges. The region is experiencing seismic demographic changes, with rapidly aging populations and declining birthrates. But investment returns are relatively low due to geopolitical uncertainty and minimal interest rates. With the region having relatively few robust retirement systems, many Asian countries will struggle to provide adequate pensions. Governments need to take positive action now to reduce financial pressures and avoid intergenerational conflicts between the young and old. Life expectancy at birth in the region has increased by seven to 14 years in most countries during the last 40 years, according to the 2018 Melbourne Mercer Global Pension Index (MMGPI), which ranks pension systems round the world on adequacy, sustainability and integrity. This is an average of one additional year every four years. The increased life expectancy of a 65-year-old over the last 40 years has ranged from 1.7 years in Indonesia to 8.1 years in Singapore. Much of the rest of the world is facing similar challenges relating to aging populations, and nations are pursuing similar policy reforms. These include raising pension ages, encouraging people to work longer, increasing the funding levels set aside for retirement and reducing the amount of money people can take out of their pension accounts before they reach retirement age. The 2018 MMGPI findings pose the fundamental question: What reforms can Asian governments implement to improve the long-term outcomes of their retirement income systems? The natural starting place to create a world-class pension system is ensuring the right balance between adequacy and sustainability. A system providing generous benefits in the short-term is unlikely to be sustainable, while a system that's sustainable over many years usually provides modest benefits. Without changes to retirement ages and eligibility ages to access social security and private pensions, the pressure on retirement systems will increase, which could threaten the financial security provided to the elderly. Increased workforce participation by women and older workers can improve adequacy and sustainability. Japan, China and South Korea rank near the bottom of the Mercer index. Their pension systems do not represent a sustainable model to support the retirement of current and future generations. If left unchanged, these countries will suffer social conflicts, since pension benefits will not be distributed equally between generations. Japan, for instance, is taking baby steps to reform its pension system by gradually raising the mandatory retirement age of some 3.4 million civil servants to 65 from the current 60 years of age. Japanese retirees can now choose to start receiving their pensions at any point between the ages of 60 and 70, with greater monthly payments offered to those who start at age 65 or older. Having the world's highest life expectancy and lowest birthrate, Japan's population is expected to shrink. This challenging situation is already contributing to skill shortages, which will further impact Japan's shrinking tax revenue base. The Japanese government could improve its pension system by encouraging higher levels of household savings and continuing to increase the level of state pension coverage, since 49 percent of the working age population is not covered by private pension plans. Introducing a requirement that part of the retirement benefit must be taken as an income stream and not a lump sum will improve the overall sustainability of the social security system — as would reducing government debt as a percentage of gross domestic product, as this improves the likelihood that the current level of pension payments can be maintained. China faces different issues. China's unique pension system comprises various plans for urban and rural populations, as well as for rural migrants and public sector workers. The urban and rural systems have a pay-as-you-go basic pension consisting of a pooled account (from employer contributions or government expenditure) and funded individual accounts (from employee contributions). Supplementary plans are also provided by some employers, particularly in urban areas. The Chinese pension system could be improved by increasing the use of workers' contributions to pensions to enhance the overall retirement protection of workers and increasing minimum support for the poorest retirees. A requirement that part of the supplementary retirement benefit must be taken as an income stream should be introduced, as well. More investment options should be offered to pension holders to permit a greater exposure to growth assets, while pension plans should improve their communications with members. Hong Kong should consider introducing tax incentives to encourage voluntary member contributions, thus increasing retirement savings. Hong Kong should also require that part of the retirement benefit be taken as an income stream. Older workers should be retained in the labor market as life expectancies rise. South Korea suffers from one of the weakest pension systems for the poor when expressed as a percentage of the average wage at just six percent. Its system would benefit by improving the level of support provided to the poorest pensioners, introducing a requirement that part of the retirement benefit from private pension arrangements be taken as an income stream and increasing the overall level of contributions. Singapore's well-structured pension system is ranked top in the region and has seen improvements in sustainability. Its retirement system, the Central Provident Fund, provides flexibility to its members, who include all employed Singaporean residents and permanent residents. But more can be done. Barriers to establishing tax-approved group corporate retirement plans should be reduced, and the CPF should also be opened to temporary nonresident workers who comprise more than a third of the labor force. The age that CPF members can access their savings should be raised, as well. Since pension systems are an intergenerational issue, they require a long-term perspective. Pension systems, which are one of the largest institutional investors in any market, should increasingly recognize the importance of acting as good stewards of the capital entrusted to them, including managing risks, such as climate change. With Asia's aging populations staying productive well into their 70s and even 80s, it is critical to improve the provision of adequate and sustainable retirement income. Raising the retirement age, expanding the coverage of private pensions for workers and encouraging financial planning and early savings should be the focus of employers and policy makers. Article originally published in Nikkei Asian Review.