Career

Three Leadership Traits Critical to the Future of Work

25 April, 2019
  • Sophia Powe

    Editor-in-Chief of Voice on Growth, International Region at Mercer

article-img
“Emotional intelligence and soft skills should become priorities for business leaders who wish to thrive in the future of work.”

The ongoing evolution of the global economy is a reflection of powerful changes occurring within the human population. Economies once historically sidelined by political headwinds, poor infrastructure and underutilized workforces are using digital technologies and access to interconnected resources to build unprecedented wealth and influence.

But growth economies are doing more than catching up with traditional markets. They're now leading profound changes in the future of work and throughout the global economy. India has surpassed the U.S. and Japan as the leader in artificial intelligence (AI) and robotic process automation (RPA) technologies;1 Latin America's once stalled economy expects stable growth throughout 2019;2 and the purchasing power of China's middle class has forever changed e-commerce and how consumers find, purchase and acquire products and services.3

Business leaders, understandably, can feel overwhelmed by the pace and scope of modern change and what it means for their organizations and workforce dynamics. These three leadership qualities can guide them to success in an uncertain future.

1. Demonstrate Emotional Intelligence & Soft Skills

 

"I've learned that people will forget what you said, people will forget what you did, but people will never forget how you made them feel." — Maya Angelou

Leaders must be truthful to their own feelings while acknowledging the feelings of others. The era of lifetime employment and guaranteed pension plans is ending in many regions, which means employees around the world harbor fears about job security and long-term financial well-being. Moreover, Mercer's 2018 Global Talent Trends report shows that employees are increasingly searching for roles that allow them to work with purpose, putting additional pressure on leaders to connect with their workforce on a deeper level. Business leaders who internalize this reality and take meaningful steps to curtail their employees' anxieties command the respect of workers.

Candidness is the cornerstone of true communication. Leaders must actively develop their emotional intelligence (EQ) and soft skill quotients, so they can inspire individual employees and entire workforces by speaking to their emotions while always delivering the truth. Reality always prevails. People respect leaders who treat them with respect and prepare them with information that will impact their lives.

Emotional intelligence and soft skills should become priorities for business leaders who wish to thrive in the future of work. Being able to relate to the aspirations, sensibilities and challenges of other human beings requires a concerted effort to listen, understand and take action. As workforces, especially in growth nations, gravitate from rural areas to emerging megacities, leaders must proactively address their concerns about finding affordable childcare and transportation, accessing financial investment opportunities and pursuing professional development programs.

Soft skills allow leaders to communicate information instead of dictating information. This connection builds strong relationships and productivity among workers who then feel critical to the business' objectives and success. Because, in truth, they are. Genuine appreciation is a powerful motivator.

2. Have a Passion for Technology

 

Leaders who feel they have "made it" are doomed to irrelevance. The image of a business leader in a corner office with teams of employees to carry out their orders and promulgate their communications is becoming obsolete. Technology is always evolving, and business leaders cannot rely on others to fill the gap when it comes to proficiency with modern digital devices, platforms and strategies.

Learning new technologies takes time, and for many leaders, time is a precious commodity. Digital transformation, however, demands that business leaders passionately engage with developing technological innovations and trends that impact business operations, consumer engagement and sales strategies.

The future of work requires leaders to have the technical ability to communicate across the latest digital ecosystems and media channels. This acumen demonstrates their understanding of how technology is evolving and how it drives business in a hyper-interconnected world. Business leaders should regularly ask employees and outside vendors (and even competitors) to "show me" or "teach me," because these questions demonstrate a passion for learning and an emotional intelligence that appreciates the need to stay informed and relevant.

Being technologically savvy also allows leaders to connect the dots in terms of operational resources, workforce skillsets and the need to pivot priorities and growth investments. When in doubt, there is no shame in asking how to use the latest application or device. The future waits for no one.

3. Know All Growth is Global

 

Think about your smartphone. It probably contains lithium from Chile, indium from China and coltan from Rwanda.4 Even the most local business relies on the global economy, and leaders who can contextualize business opportunities with an international mindset are poised for success in the future of work.

In 2025, the world's population will reach 8.1 billion people — which represents a historic level of business opportunity, untapped markets and revenue sources waiting to be discovered.5 Growth is the result of forward-thinking initiatives that plan for where business is heading. As western economies continue to struggle with political turmoil — from the implementation of Brexit to uncertain U.S. international trade dynamics — growth economies can wield increased influence across all industries.

Growth-focused leaders, however, face the challenge of building consensus and securing buy-in from various stakeholders. From C-suite executives and employees to investors and shareholders, leaders must be able to communicate a vision and strategy that captures the potential of the future of work. Leaders must always think in terms of a globalized economy, because that is where the opportunity resides — in the hearts, minds and needs of an expanding population. This will continue to propel businesses in the future, so long as leaders provide a vision moving forward.

Growth economies offer business leaders more than lucrative sales markets. They provide valuable supply chains and investment opportunities in assets ranging from infrastructure and manufacturing to human capital and digital technologies. In a globalized world, the future of work belongs to leaders who understand that opportunities will come from economies on the rise and leaders who understand the influence EQ, technology and a global mindset will have on their ability to succeed.

1Some, Kamalika. "India Leads US and Japan in Driving RPA and AI Based Technologies." Analytics Insight, 2 Oct. 2018, https://www.analyticsinsight.net/india-leads-us-japan-driving-rpa-ai-based-technologies/.
2
"Latin America Outlook 3Q18." BBVA Research, https://www.bbvaresearch.com/wp-content/uploads/2018/08/Latin_America_Outlook_3Q18.pdf.
3
Riming, Nie. "How China's Middle Class Will Dictate the Future of E-Commerce." Sixth Tone, 16 Jan. 2018, https://www.sixthtone.com/news/1001560/how-chinas-middle-class-will-dictate-the-future-of-e-commerce.
4
Olingo, Allan. "Minerals in Your Mobile Phone." The East African, https://www.theeastafrican.co.ke/business/Minerals-in-your-mobile-phone-/-/2560/2739730/-/xveeqw/-/index.html
5
Olson, Alexandra. "U.N.: World Population to Reach 8.1B in 2025." USA Today, Gannett Satellite Information Network, 13 June 2013, https://www.usatoday.com/story/news/world/2013/06/13/un-world-population-81-billion-2025/2420989/.

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Bart Hermans | 19 Sep 2019

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Fiona Dunsire | 05 Sep 2019

The markets across Latin America, the Middle East, Africa and Asia are some of the most exciting in the world, amid a backdrop of economic growth and changes in demographics, investment markets and regulations. Mercer's Growth Markets Asset Allocation Trends: Evolving Landscape report examined retirement plans in 14 of these markets, with a look at current investment positions and changes over the past five years. The study included retirement fund assets of almost $5 trillion across markets in the Southern and Eastern hemispheres. These areas offer exciting potential for asset owners, managers and investors, as almost 70% of global growth now comes from these economies, according to the World Bank. We are also seeing a rapid expansion of the middle class, creating different patterns of consumption and savings. In addition, half of the top 50 global institutional investors are located in these markets.1 The Global Investment Landscape Is Becoming More Robust   Because the economies of Latin America, the Middle East, Africa and Asia are large and growing, with a rising share of wealth being held by individuals, they are of particular interest to investors around the world. These markets are also becoming increasingly open to foreign investors. At the same time, regulatory changes within these regions are allowing domestic investors to invest more broadly and outside their home markets. All these developments translate into a more open and robust investment landscape, with increasing opportunities for investors across the globe. The pension and savings systems in these regions are also undergoing reform, with the same trend toward increasing individual responsibility for retirement savings as seen in Western countries. Overall, we are seeing a shift to defined contribution (DC) plans at the expense of defined benefit (DB) plans across both corporate and government-sponsored schemes. These changes further emphasize the need to deliver effective investment solutions to meet future savings needs and ensure trust in the systems. 3 Ways Investors Are Responding   Investors and plan managers are responding to the changing environment in three key ways: 1.  More investors are putting money in equities. In the past five years, equity allocations rose approximately 8%, from 32% to 40%. For investors in many jurisdictions, the shift was intended to increase expected returns on the portfolio. Investors across the world face challenges amid an increasingly competitive investment landscape and a low return environment. Adding equities to the portfolio mix should offer greater return expectations over time. 2.  Market liberalization is enabling more diversified portfolios, through increased exposure to foreign assets at the expense of domestic assets. On average, foreign exposure in retirement plans increased from 45% of the overall equity portfolio to 49% in the past five years. Investors sought greater geographic diversification, especially in Colombia, Japan, South Korea, Malaysia and Taiwan. In some countries, such as Brazil, Colombia, Peru and South Africa, recent changes in legislation now allow increased foreign asset exposure. In Japan, the Government Pension Investment Fund has seen a move to more foreign equities at the expense of domestic equities in recent years. The shift to foreign assets was also present in fixed income, with the proportion of foreign allocations rising from 16% to 23%, in part due to less attractive local interest rates, as well as a search for increased diversification. Significant home biases remain; however, we expect this trend to continue as regulatory changes support broader global investment. 3.  Investors are showing slightly more interest in alternative investments. More investors are including alternatives in their portfolios, and Mercer expects that trend to continue on an upward trajectory. Among those investors who provided details on their alternatives asset allocations, more than 70% of the average allocations went to property and infrastructure, and approximately 20% went to private equity. Changing regulations have made alternatives more attractive for investors in some areas. For instance, in Chile, a 2017 reform to the investment regime passed, allowing pension managers to invest in alternatives up to 10%, though specific limits vary by portfolio. The main objective of this enhancement is to boost returns and ultimately retirement incomes. As investors seek to diversify their portfolios and seek return enhancement, we expect alternatives exposure to continue to grow over time. We hope investors use our report's findings as an opportunity to review their own portfolio and determine where they can improve their asset allocation to achieve even better investment outcomes. To learn more, download the full report here. Sources: Top 1,000 Global Institutional Investors." Investment & Pensions Europe, 2016. https://www.ipe.com/Uploads/y/d/w/TOP-1000-Global.pdf

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Juliane Gruethner | 31 Oct 2019

International project assignments are one of the current hot topics in global mobility management. A quick poll in conjunction with our Expatriate Management Conference in 2018 showed that, in an increasing number of organizations, the mobility function is responsible for the administration of international project assignments. Nearly 90% of the responding mobility managers confirmed that their organizations have international project assignments, and 80% of respondents are responsible for their administration. With this trend, new challenges are emerging. Let's take a look. Challenge 1: Common Understanding of Terminology   There does not seem to be a common definition of an international project assignment. Mercer's poll showed that about 40% of the responding businesses define an international project assignment as simply an international assignment to a project, regardless of its duration, while 60% specified a period of time. Some organizations also differentiate between project assignments for an external client and internal projects. Apart from the lack of clear definitions, most businesses (73%) do not have any formal policy or regulations for their international project assignments. If they exist, they often overlap with those for traditional long- or short-term assignments. No matter how you approach international project assignments, make sure that your company has a precise definition and corresponding guidelines in place that allow for consistent handling and fair treatment of all internationally mobile employees. For this discussion, we define international project assignments as assignments to client projects abroad, whereas assignments to projects abroad within one organization are called international assignments. Challenge 2: Fair and Equal Treatment   Determining an individual compensation package for an international project assignment differs from traditional forms of international assignment compensation. Some employees may have been hired especially or exclusively for project work. Others are assigned to work on international projects based on short- or long-term assignments or commuter packages. Those differences can lead to inconsistencies in compensation between the assignees — depending on where they come from and how their project assignment is defined in the home country. Clear internal regulations differentiating target groups and assignment types increase the transparency of the mobility program and ultimately increase its acceptance among employees. Challenge 3: Determining the Return on Investment   In Mercer's 2017 Worldwide Survey of International Assignment Policies and Practices, the majority of respondents stated that a business case is required for an international assignment (62%) and that they prepare corresponding cost estimates (96%). However, only 43% track the actual costs against budgeted costs, and only 2% have defined how the return on investment (ROI) of an international assignment is quantified. It is often linked to a mid- to long-term perspective and not easily expressed in pure economic figures. That said, it is possible to track success by means of faster promotions or higher retention rates of expatriates. The ROI of international project assignments, in contrast, is easier to measure. Actual costs can be compared to the original estimate and the price paid by the client. This transparency leads to higher cost pressure, which calls for a greater flexibility with respect to the applicability of existing internal rules and regulations to be able to offer projects at a competitive price. In conclusion, the short-term business value (winning and conducting the project in a profitable manner) and the mid- to long-term value of international assignments (for example, filling a skills gap in the host location or employee development) have to be balanced diligently, which can be achieved by a thoroughly segmented international assignment policy. Challenge 4: Management of Large Numbers of International Project Assignments   Depending on the industry sector, the number of international project assignments in an organization can be extremely high. One of the respondents in the conference poll indicated that they handle about 23,000 international project assignments per year. Therefore, the resources needed in the mobility function will have to be increased or resources reallocated once mobility takes over the responsibility for international project assignments. You should also review the service delivery model, as well as individual procedures, and if necessary, adapt them to enhance the efficiency and effectiveness of the international project assignment administration. Using the right technology can also help streamline processes and make a large number of international project assignments manageable. Challenge 5: Deployment to Unknown Places   International project assignments take place not only in the company's regular assignment destinations but also in new locations at client sites. The company, therefore, may not have any resources in or knowledge about the location. Client resources or external vendors can be used to obtain necessary information or perform necessary services, such as immigration or payroll. 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If you'd like to learn more, click here to get in touch with a Mercer consultant.

Alice Harkness | 31 Oct 2019

Benefits have traditionally been provided on a "one-size-fits-all" model, meaning some employees gain greater value than others. Today, employees increasingly expect more personalized benefits that allow them to flex and utilize benefits depending on their particular needs and life stage. This allows employees to feel they are being treated equally, independent of circumstances (i.e., single or married). It's time to break the mold with a "non-traditional" approach that may include well-being incentives, opt-in/out insurance coverage and a design that allows individuals to claim parents' expenses or pet care expenses. Forward-thinking companies are on this journey already, but many aren't, as HR departments overestimate employee's satisfaction with the status quo. Why? They're afraid to ask. The risk of not asking can result in investing valuable budget on unused or underutilized benefits. Get to Know Your Employees Better   Don't be afraid to ask the tough questions. Gather feedback through engagement "spot" surveys or focus groups on what employees like and dislike in current offerings or what else would be beneficial. While it may be impossible to implement everything, it's a great opportunity to engage. Employees may not know what they need. Use data analytics to better understand what types of benefits (especially health) are being used the most and what's essential. Are people reporting that they want more well-being incentives, yet no one is taking advantage of your discounted gym membership offering? By combining qualitative and quantitative data, you can identify gaps. Sometimes, that gap is not on the offer itself but rather the communication around it. Communication Is Key   We often hear from HR, "Our employees have good knowledge of their benefits; we communicate them every year." This is not enough. Effective communication is key. Employees are time-poor with little patience for reviewing the fine print of policies. Why not get feedback on their preferred channels of communication? Find simple ways to communicate regularly, focusing on different benefit offerings. This can include infographics, interactive landing pages, videos or simply shorter, bite-sized information. Don't forget to tell employees why certain benefits are important — they don't always know! Flexible Doesn't Always Equate to $$$   Providing personalized benefits can be costly, but it doesn't have to be. It's about taking your current budget and creatively investing in employees in a way that resonates. Another benefit is confidence in knowing your investment is being used. Companies who invest the time in designing benefits that resonate with employees — throwing out the traditional approach by embracing new ways of more personalized thinking — will see a greater return on investment and a happier, more engaged workforce.

Wejdan Alosaimi | 17 Oct 2019

For many decades, Saudi Arabia — as a nation, culture and economic force — has been inextricably tied to oil exports and the energy industry. However, a bold new vision, named Saudi Vision 2030, aims to wean the country off its dependencies on fossil fuels through the creation of sweeping new reforms and policies. This vision looks to modernize Saudi Arabia, both as a domestic society and a global financial powerhouse. The Power of Embracing Change   In 2016, Crown Prince Mohammad bin Salman bin Abdulaziz Al-Saud led the unveiling of the Saudi Vision 2030 initiative, which detailed the nation's unprecedented and extraordinary commitment to emerge as a leader in a rapidly evolving world. As oil prices continue to react to new economic realities and regional political forces shape the roles and objectives of nations throughout the Middle East, Saudi Arabia's decision to proactively embrace change could have extraordinary foreign and domestic ramifications. With a population of more than 33.4 million people and a median age of 25, Saudi Arabia faces a future filled with significant challenges and opportunities.1 Saudi Vision 2030 is a road map for how the nation will empower its millions of young citizens to work and thrive in a globalized world that increasingly views petroleum as an outdated and harmful source of energy. A shift in long-established revenue resources and economic paradigms requires a fundamental shift in local workforce skill sets and proficiencies with modern technologies. As other nations are slow to adjust to climate change and other geo-economic shifts, Saudi Arabia is poised to exemplify to the rest of the world how governments can leverage policy reform to enhance the lives of people both inside and outside the country's borders.2 Accommodating a Complex Global Economy   Saudi Vision 2030 will have a profound impact on rapidly growing economies, such as India, that seek to leverage digital transformation while implementing innovative domestic and workforce policies. In fact, the fate of Saudi Arabia and India are becoming increasingly intertwined, as India — unlike many western economies — requires more oil to empower its robust economic rise. Industrialized markets, in areas such as Europe and the United States, are seeking greener alternatives and more electric vehicles for transportation demands, but India remains heavily dependent on fossil fuels. By 2040, India will need to process up to 10 million barrels of crude oil every day to support its expanding economy and progressively urbanized populations.3 Saudi Arabia, a nation that already has a few notable government policies elevating the standard of living for its citizens (such as offering free college education to all citizens), is further internationalizing its economy by prioritizing privatization. The 2030 plan encourages financial institutions to promote private sector growth, marking a significant development in how the country is aligning its domestic workforces to compete in a globalized economy. The focus on increasing privatization and other non-oil industries — such as construction, finance, healthcare, retail and religious tourism — will create new opportunities for Saudi businesses and entrepreneurs.4 Creating a Future Through Indigenous Resources   Saudi Vision 2030 addresses many of the local, cultural challenges facing the nation, such as the role of women in the workforce and society, the impact of digital transformation and automation, and the need to modernize the sensibilities of Saudi businesses. Allowing women to drive and granting them greater access to economic prosperity — with the goal of increasing women's participation in the workforce from 22% to 30% — has generated positive responses with global investors. The 2030 plan also prioritizes domestic issues and the overall health of its citizens, with the stated objective of raising the average life expectancy from 74 to 80 years and aggressively promoting daily exercise and healthier lifestyles for all Saudi citizens.5 The Saudi government also seeks to bring its society into the digital age by implementing more e-government services that will connect citizens to resources through smartphones, data-centric operations and other technologies. This push will also drive human capital out of government jobs and into the private sector. According to the Mercer Global Talent Trends 2019 report, companies in countries such as India, Brazil, and Japan will experience a 70% increase in automation, boosting their need — like Saudi Arabia — to find new roles and professional development opportunities for workers. The 2030 plan offers an ambitious vision for the nation's indigenous resources. Empowering women and integrating modern technologies throughout its economy and government are just part of this comprehensive strategy. By inviting the global economy to invest in its progressive financial mechanisms and bolster tourism through campaigns highlighting the nation's history, Saudi Arabia is poised to lead its people, and the world, into a future forever defined by a new, modern view of the future. Will it work? The world will know in 2030. Sources: 1. Kingdom of Saudi Arabia. "Saudi Census: The Total Population." General Authority for Statistics, Accessed 11 July 2019,https://www.stats.gov.sa/en/node. 2. Mohammed bin Salman bin Abdulaziz Al-Saud. "Vision 2030." Vision 2030, 9 May. 2019, https://vision2030.gov.sa/en. 3. Critchlow, Andrew. "India is too important for oil titan Saudi to ignore." S&P Global Platts, 6 Mar. 2019, https://blogs.platts.com/2019/03/06/india-important-oil-saudi/. 4. Nuruzzaman, Mohammed. "Saudi Arabia's 'Vision 2030': Will It Save Or Sink the Middle East?" E-International Relations, 10 Jul. 2018, https://www.e-ir.info/2018/07/10/saudi-arabias-vision-2030-will-it-save-or-sink-the-middle-east/. 5. "Saudi Arabia Vision — Goals and Objectives." GO-Gulf, 14 Jul. 2016,https://www.go-gulf.com/blog/saudi-arabia-vision-2030/.

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