Health

Optimizing Digital Disruption: Transforming Benefits Management and Communications to Optimize ROI

16 January, 2018
  • Josh Fisher

    Growth Markets Commercial Director, Thomsons Online Benefits at Mercer

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“82% of millennials say workplace technology would influence them when deciding whether to accept a new job."

Change is a constant, but the pace of change is greater than ever, with greater impact on the way organizations run their global benefits programs  Many factors involved are outside a company’s direct control, but nonetheless, put increasing pressure on the investment in, design and execution of — and value provided by — benefits within the wider value proposition.

Major trends — occurring at both societal and business levels — influencing how organizations think about their global benefits programs include:

  • Business globalization
    HR needs to be agile, respond to change quickly, achieve global consistency to ensure quality and efficiency, have single global suppliers to better control the supply chain and streamline operations to reduce costs and manual processes.
  • Workforce pressures
    Organizations need to address skills shortages while appealing to multiple generations, retaining employees in a mobile world and tackling the challenges of an aging workforce.
  • Digitization
    The focus on cloud-based technology and automation to improve efficiencies and effectiveness while meeting executives’ demand for data-driven HR decisions and employees’ desire for a consumer-grade technology experience is growing.
  • Regulation and health costs
    Regulatory reform, worsening health/ wellness profiles, spiraling health costs and demand for greater employee choice all add to the complexity of global benefits programs.
     

Given these challenges, many organizations find their current benefits approach isn’t delivering desired results. Many have no global strategy in place, and those that do are typically managing benefits manually or are using different local systems, making consistency and governance nearly impossible.

But it doesn’t have to be this way. By harnessing the power of technology and the data within it to inform and optimize each part of the benefits process, employers can address key concerns and derive valuable results for their businesses.

Transforming HR Technology
 

No one likes to perform low-value administrative tasks or deal with mistakes and errors — people want to make a difference at work. Thankfully, automation algorithms are changing the role of HR, replacing manual administration and allowing teams to focus on value-added work. Research by Gartner shows that by 2020, half of roles will be impacted or even totally disrupted by technology[1]. This is further demonstrated by research from

Sierra-Cedar showing that recruitment for administrative roles is decreasing even as recruitment for HR technology and analytics roles is on the rise[2].

As this shift continues, analytics will become the only way to inform decision-making, and artificial intelligence (AI) will become the new way to support employees and provide service. For the first time, employers will be able to measure every aspect of their benefits strategy and delivery to optimize performance by evaluating success and adapting to challenges as they arise.

Employees Demand Consumer-Grade Experience
 

In the past few years, employees have started making more decisions about their careers based on experiences with their employers. Some 80% of millennials reach for their smartphones when they wake[3]. People increasingly buy products based on how quickly they can get their delivery. So it’s hardly surprising that 82% of millennials say workplace technology would influence them when deciding whether to accept a new job[4].

Companies that understand and accept this cultural shift are responding by eliminating paper-based processes. But the pace of workplace technology adoption has been slow. To meet employee demands and secure the best talent, employers must reconsider how they serve their employees.

AI is Driving Self-Service on Demand
 

In the digital world, AI is rapidly becoming the best way to support employees and provide service — a major reason tech giants are investing enormously in this space. In fact, most investment analysts see 2017 as the year AI functioning as a personal assistant really starts to take hold[].

It’s not just about employees. A large ecosystem is now being developed in the corporate world to improve the roles of contact centers and improve customer experiences. Contrary to conventional wisdom, the best customer service isn’t focused on servicing the unhappiest of clients but on ensuring minimal contact. Anyone who has used online chat support has likely had a good portion of the conversation automated and perhaps dealt with an agent who has simply checked prepopulated responses. Every time an agent marks a response as correct, the bot learns, improving the customerexperience.

Data Drives HR Decision Making
 

In the employee arena, companies are sitting on huge amounts of data, leading to changes in the way they make decisions. In coming years, executive leaders will increasingly expect all recommendations to be based on real-time, accurate and even predictive data.

Ultimately, the role of human capital management vendors will change — as will the way companies think about buying from them. For many employers benefits command the single largest spend outside of pay, yet chief HR officers currently devote a tiny portion of their time to ensuring they’re getting the maximum value. Analytics will provide the ability to unlock the value of the enormous benefits spend — giving benefits increasingly strategic importance to the chief HR officer.

The Role of Benefits is Changing
 

These changes couldn’t come at a better time. Traditionally, benefits were used to provide a safety net in a working career in case an employee died, developed a long-term illness or needed income in retirement. But workers today no longer stay with their employers for life — 72% of workers expect to change their jobs more than three times in their careers[]. As a result, the relationship between employee and company has changed. At the same time, companies have been shifting liabilities to their workforces.

As employers recognize that a healthier, happier and more engaged workforce creates a more productive organization, benefits trends are undergoing major change. Companies want to focus more on health and wellness so employees won’t get sick — and will get back to work quickly if they do get sick. Employers also want to help alleviate employees’ everyday worries. In short, they want their benefits programs to show their workers that they care and are doing the most they can to help.

Technology has aided this transition as companies move more benefits into reimbursement-style accounts that empower employees in managing their health and finances. Employers can also take advantage of platforms that allow users to access information on the move in a format that’s relevant to them. Furthermore, the proliferation of wearable trackers and gamification helps promote employee dedication to health and wellness.

Mercer Marsh Benefits Powered By Darwin: A New Solution
 

Having a vision for a better approach to global benefits is one thing; delivering it in the right way is another. Given the transforming HR arena and the growing focus on digital technology, Mercer Marsh Benefits has developed and tailored an approach to addressing organizations’ needs as they go down this path of disruption.

Too often, global benefits management is focused on fixing immediate problems or using tactical responses rather than setting strategies and plans in motion to drive the right outcomes — whether for engagement, productivity, sustainability or effectiveness — in a demonstrable way. Proactive organizations seek a partner that is flexible enough to address unique needs and stay adaptable over time rather than simply dictating a course of action. Global consistency is also essential, as is expertise with regulatory compliance.

Ultimately, multinationals need a partner with an eye on the future to see coming trends and develop responses before others do. Darwin™, acquired by Mercer in December 2016, is a cloud-based, technology-driven solution that meets these needs for all aspects of benefits communication and

administration. It communicates and manages global benefits day to day, in multiple currencies and languages, helping improve user experiences, efficiency of processes and informed decision making. It also helps transform the broking process, with globally consistent data that accelerates the adoption of international pooling and captives, providing better long-term financing and risk management solutions for global benefits.

The technology also improves consultancy, harnessing data and engagement with employees to drive deeper insights and identify trends and patterns. The uniqueness of the solution is in how it transforms the role of anyone who works with benefits. Non-value added activities become automated, eliminating waste and elevating individuals’ roles, driving outcomes for the company and employee alike.

Conclusion
 

As HR contends with a host of mounting challenges — globalization, workforce pressures, digitization, regulatory reform, healthcare costs — it’s also being asked to step up and find new ways of working, spending less time performing wasteful administrative tasks and focusing more on becoming strategic advisors who drive business outcomes. Many organizations still struggle with strategic benefits management and are ill-equipped to address these trends.

The rise of powerful technology platforms, such as Darwin, along with providing consulting expertise will help HR harness the power of its data to gain maximum insights and optimize the benefits management process. This, in turn, will transform decision-making to drive desired outcomes and, ultimately, create business value for the organization as a whole.

 

1 Gartner. “Gartner Reveals Top Predictions for IT Organizations and Users for 2016 and Beyond” [press release] (October 6, 2015).

2 Sierra-Cedar. 2015–2016 HR Systems Survey White Paper. 18th Annual Edition (2015).

3 Zogby Analytics. Millennial Study (2014).

4 Dell. “Dell and Intel Future Workforce Study Provides Key Insights Into Technology Trends Shaping the Modern Global Workplace” [press release] (April 2, 2013).

5 Brackenridge G. “Machine Learning Is Transforming Investment Strategies for Asset Managers” [commentary] CNBC (June 6, 2017)

6 Hays. Gen Y and the World of Work (2013)

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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. 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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. 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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.

Catherine Li | 25 Apr 2019

In China, as in many other countries with growing economies, employee health management is a relatively new concept. This presents an exciting opportunity to create something new — but also generous room for error. A superior benefits program meets the diverse needs of active employees and retirees while aligning with the company’s business development and talent strategies. Although these dual goals may seem straightforward, it’s easy for HR to get sidetracked along the way. Have you steered clear of these four pitfalls? Misunderstanding 1: Benefits are Just for Brand-Building   Benefits design commonly goes through three phases: foundation-laying, boasting and returning to fundamentals. Young technology companies have a tendency to get stuck in phase two, coming up with fun, innovative and even newsworthy benefits. These less-traditional benefits programs have several advantages, including supplementing basic benefits and enhancing the program’s overall appeal. They can also help tech companies with a predominately young workforce connect with Millennial talent. For example, some Chinese companies offer an online shopping platform similar to Amazon through which employees can order household goods and other items to be delivered straight to their homes. Others focus on tokens of appreciation at stressful or eventful times of year. An e-commerce company might buy movie tickets for their employees and families after the hectic November 11 shopping festival — an online shopping bonanza that keeps e-commerce employees busy around the clock — to show gratitude for their hard work. But although such niche benefits are attractive in the short term, they have little long-term effect when applied on their own. Be careful not to get swept up in creativity at the expense of sound basic benefits. You can organize a race for charity to show you’re committed to employee health as well as social good, but if you can’t help an employee through a serious illness, how can you claim to care about the well-being of your workforce? The biggest health management challenge for Chinese businesses is staff turnover. New programs take time to launch, so little effect will be seen if the turnover rate is high. Investing in core benefits design yields more consistent results and helps retain employees, whereas short-term benefits solutions rarely build the brand. Misunderstanding 2: We Don’t Need to Design our Own Benefits Program – We can Just Copy our Competitors   Thoughtful design is by far the most important aspect of a successful benefits program for both basic and innovative offerings. Many companies focus on copying competitors’ designs or best practices. After all, benefits design is time-consuming and complicated; why not save on resources by leveraging an existing program? This line of thinking is dangerous. A benefits plan that works for one company, no matter how similar it seems, may not work for yours. Employee needs, business development goals, budget and future plans (in terms of costs and talent retention) must all be taken into account. It’s up to HR to look deep within the organization and ask fundamental questions: How much budget is available? Whom is the benefits program aimed at? What are the needs of the target employees and the corresponding risks? Caring for employee welfare means taking the time to customize a benefits program while taking into account the firm’s resources and priorities. Organizations with limited budgets profit from analyzing employee health data from biomedical screenings, medical claims and health risk assessments to identify the primary health challenges of target employees and design an appropriate program. Note that mental health, including managing stress, is just as important as physical well-being. Misunderstanding 3: Our Benefits are so Great, They Speak for Themselves   According to Mercer’s 2015 Benefits Communication Trend Survey of HR managers in China, more than 70% of employers think benefits communication is important. Yet only 17% of organizations have a specific role for employee benefits communication, and nearly 70% have little or no budget for benefits communication. Assuming your benefits programs will self-promote is a mistake. Even if your benefits are good, busy employees may not have time to learn about them and may misunderstand or underutilize them — substantially lowering your returns. Effective communication of benefits programs can: •       Improve employee retention and engagement •       Boost morale •       Improve employees’ health conditions and productivity •       Enhance employee trust •       Build the employer brand   Note that the organizations with high employee benefits satisfaction are the ones that effectively communicate the value of their benefits. Misunderstanding 4: All Aspects of our Benefits Program Must Show Returns   Return on investment (ROI) is a key performance indicator for many businesses. And with good reason — why invest in a project before ensuring a sound return on the investment? Although ROI is an excellent indicator of performance, not all benefits programs can be evaluated with numbers. When paired with comprehensive core benefits, health management programs and nontraditional benefits can have an underlying effect that is even greater than their immediately measurable impact. For many people, the feeling that their employer cares about their well-being means more than the money in their paycheck. The ongoing effectiveness of any benefits program ultimately depends on corporate culture: how your organization measures the value of benefits management, how it treats employees and whether it’s willing to put employee feedback into practice. Health management and benefits program design are still relatively new to Chinese companies, which tend to attach little importance to their employees’ health. But employee health is the foundation of an organization’s long-term success, and it requires investment in kind. In addition, in a high-growth economy with booming businesses, companies need to identify ways of attracting and retaining top talent. By avoiding these four pitfalls and focusing on tying programs to their firms’ long-term strategies, Chinese companies are enjoying the benefits of healthier, more engaged employees.

More from Voice on Growth

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.  

David Anderson | 22 Aug 2019

The smart city. The connected city. The intelligent city. The agile city. The data-driven city. The integrated city. The blockchain-powered city. The sustainable city. The future-proof city. There is no shortage of vision, aspiration and genius when it comes to today's cities. Still, they must attract foreign direct investment, along with blue-chip firms, start-ups and top talent, and have access to the best technology to drive growth. But growth in the world's GDP won't come from the same old sources. It will follow the fortunes of tomorrow's most competitively smart cities, many of which are overlooked urban areas with opportunities to leapfrog established megacities that were once the de facto homes to the world's most successful employees and businesses. Through investment in information and communication technologies that enhance the quality and performance of urban services, such as energy and mobility, these smart cities are competing for the highly skilled workers who will sustain their organizations and ensure growth. The Questions Facing Employers and Talent   Deciding where to work, live and raise their families, these employees prioritize the human and societal factors cited in Mercer's recent study, People First: Driving Growth in Emerging Megacities. Workers were asked to rank 20 decision-making factors by importance against four vital pillars: human, health, money and work. When deciding which city to live and work in, respondents ranked human factors — such as overall life satisfaction, safety and security, environmental considerations and proximity to friends and family — as the most important. The study also looks at how some of the fastest-growing global cities, from Kolkata, India, to Lagos, Nigeria, grow economically, attract people, enable new residents to thrive and lay a path toward a better life for its citizens. From these insights, city leaders and policy makers around the world can glean valuable lessons on what is not only needed to sustain but also power growth. Indeed, in an increasingly urbanized world, where highly skilled talent is scarce, employers and cities are asking important existential questions: ·  What makes professionals move to and stay in a particular city? ·  How can employers and cities retain talented workers with the high-level skills demanded by rising start-ups, upcoming unicorns and global brands in emerging hot spots? ·  What, exactly, do productive employees want from an employer and home city? The answers may lie in how well the world's emerging megacities prioritize their transformation from urban afterthoughts to global power players. Thus, it's helpful to take a comparative look at a sampling of cities that show serious potential to succeed and sustain their success over the long term. What they have in common is a commitment to regional superiority of opportunity and resources, to establishing themselves, in their way, as versions of Silicon Valley — where tomorrow's most highly skilled talent can thrive, building purposeful lives amid the evolution of artificial intelligence and advanced technology. From 'Cyberabad' to Other Contenders   A prime example of an emerging megacity is Hyderabad, the capital of India's southern state, Telangana. With a population of eight million, Hyderabad is the sixth most populous urban agglomeration of India and is popularly known as Cyberabad — the "Silicon Valley of India" — for its growing reputation as a global hub for information technology. (Megacities are defined as having populations of 10 million or more; the cities discussed in this article have either reached that milestone or are projected to.) Along with IT, though, Hyderabad is experiencing growth in the automotive industry and pharmaceuticals, as well as its traditional agricultural base. With extensive investment in digital and property infrastructure, the city is upgrading itself to host IT companies, especially via the development of its HITEC City, a township with state-of-the-art tech facilities for American IT giants. Retail has thrived, as well, as international and national brands open stores in the city. By contrast, the somewhat larger city of Chennai (a 2017 population of 9 million and a $59 billion GDP as of 2014) is known as the "Detroit of India" and leads the nation's automotive industry, but growth in software services, medical tourism, financial services and hardware manufacturing (along with petrochemicals and textiles) also add to its economic depth. It's also a major exporter of IT and business process outsourcing services. For sheer economic scale, the emerging megacities of China are impressive. With a 2014 GDP of $234 billion and a 2017 population of 14 million, Chengdu is Western China's No. 1 metropolitan area, and it thrives with emerging industries — notably an energy conservation and environmental protection industry that makes it an attractive destination for skilled workers. Indeed, the emphasis on "new energy" industries (in materials, hybrid and electric automobiles and IT) is propelling Chengdu. Meanwhile, China's second largest eastern city, Nanjing (with a 2014 GDP of $203 billion and a 2017 population of seven million) is dominated by service industries, led by financial services, culture and tourism. IT, environmental protection, new energy and smart power grids are becoming additional pillars of Nanjing, and a wealth of multinational firms have been establishing research centers there. Nanjing's unemployment rate has been below China's national average for several years. From Kenya to Jalisco   While China and India may dominate the scale of emerging economies, other geographies are very much on the emerging megacity map. Nairobi is not only the capital and largest city in Kenya; it is also on track for population growth from four million in 2017 to 10 million by 2030. Home to more than 100 international organizations, such as the United Nations Environmental Programme and The World Bank, as well as regional headquarters for major manufacturing and IT corporations, Nairobi shares its agricultural preeminence with a foothold in today's and tomorrow's economy. Likewise, Guadalajara (a 2014 GDP of $81 billion; 2017 population of five million) is more than the capital and largest city of Mexico's Jalisco state. It's known as the "Mexican Silicon Valley," according to the Financial Times, and is considered the city with the highest investment attraction potential in Mexico. It's the sort of social/cultural center — with an International Film Festival and International Book Fair — that strongly complements the growth of high-tech industry, chemical and electronic manufacturing, making it a hemispheric magnet for talent. These cities each make their case for talent in their own ways, creating an environment for highly skilled employees to thrive across multiple dimensions. This requires putting people first and focusing on what matters most to them. Mercer's Emerging Megacities study shows that employers often misunderstand what motivates people to move to a city and remain there: Human and societal factors are more important than money and work factors. For emerging megacities, the model of Silicon Valley may be a potent aspirational strategy, but in each case, they must prove themselves as places to live—today and tomorrow. Originally published in BRINK News.

Katie Kuehner-Hebert | 22 Aug 2019

As companies continue to migrate to all things digital, this wave of transformation will inevitably wash over every area of work, digitizing everything from finance functions and tax compliance to data analytics and beyond. Approximately 73% of executives predict significant disruption within their industries in the next three years, according to Mercer's Global Talent Trends 2019 report. This number, up from 26% in 2018, is greatly due to digital transformation. More than half of executives also expect AI and automation to replace one in five of their organization's current jobs. While this might worry some organizations, these two earthquake changes stand to create 58 million net-new jobs by 2022. Business leaders responding to Mercer's annual survey have mixed opinions on the economic growth these technological advances will have across the globe. Digitization may promise increased opportunity, but it also bodes increased competition from a host of new — and possibly more nimble — players. Assessing the Economic Outlook Across the Globe   The turbulence within the global economic landscape is compounded by uncertainty over how trade tensions between the U.S. and China are resolved, according to the Mercer report Economic and Market Outlook 2019 and Beyond. The U.S. economy may slow somewhat due to higher interest rates, while the Chinese economy will remain dependent on how the trade tensions are resolved. Other emerging market economies should continue to grow at roughly the same pace, with the possibility of stronger growth when trade tensions ease. Mercer's Themes and Opportunities 2019 research report notes "mounting evidence of over extension of credit" is creating further white-water turbulence, with the uncertainty over how the central banks' retreat from market involvement after massive liquidity infusions will impact economies. The report also notes that there is a distinct possibility "the pace of globalization could slow, pause or even go into reverse" due to political influence, particularly on trade. In addition, there are increasing expectations from governments, regulators and beneficiaries to have asset owners and investment managers incorporate sustainability as a standard action. Digitally Transforming Tax Compliance   Companies navigating all these shifting sands will increasingly look to digitization to help manage and respond to both opportunities and obligations — including tax compliance across geographies. This is also a moving target, particularly in Asia, as some countries are now implementing digital technologies to improve their tax collection efforts. In 2015, the average tax-to-GDP ratio for 28 economies in the region was only 17.5%, which is just over half the average tax ratio of 34% among OECD economies. There has been a great deal of progress with the use of electronic filing of tax returns for major taxes in India, Kazakhstan, Malaysia, Mongolia, Nepal, Singapore and China. Moreover, mandatory electronic payments are now required by revenue bodies in the People's Republic of China, Indonesia, Mongolia and Vietnam.1 Digitization and increased tax regulation are also intended to vastly improve collection efforts, though much more push is needed. Governments are making great strides within their tax administration efforts with the aid of digitization — including sending eAssessments to businesses for taxes owed, based on electronic auditing systems.2 If the systems find discrepancies within sellers' monthly tax reports, it automatically issues an eAssessment that includes interest and penalties. Andy Hovancik, President and CEO at Sovos, puts it plainly: "Bottom line — tax enforcement is now embedded in the most important business processes, changing the world of tax and disrupting decades old business processes. As a result, tax is driving digital transformation in finance and accounting departments. Now more than ever, businesses need a new approach to tax automation to ensure compliance."2 Finance executives agree, including Michael Bernard, chief tax officer for transaction tax at Vertex Inc. He states, "Governments worldwide are turning to new forms of compliance, like e-invoicing regulations, which require IT departments to embed workflows in core processes, and real-time VAT compliance checks. In 2019, finance organizations will begin to factor tax considerations into their digital transformation strategies. An effective road map will include actions for using data to link business processes and tax compliance obligations."3 Guiding Business Strategy With Compliance   Digitization alone won't enable companies to better comply with new tax regulations — making compliance a central business strategy will. This includes implementing training sessions across the enterprise to help employees develop a state of mindfulness when it comes to compliance. But in this era of increased accountability, Leila Szwarc, global head of compliance and strategic regulatory services at TMFGroup, states that companies should re-imagine the notion of compliance as a "business enabler" that can distinguish it from competitors.4 According to Szwarc, "Compliance should be seen as a business enabler rather than as a drain on development, but this can only happen if businesses work in an integrated way to bring creative solutions to the related organizational challenges." She continues, "As APAC firms face up to a new regulatory era, compliance teams have a key role to play in both protecting their firms' interests and helping to drive long-term competitive advantage." With an uncertain market ahead and vast changes on the horizon, it's more important than ever to get ahead of the curve and think about how your business can not only survive the wave of digital transformation coming but also thrive with it. Start planning your business strategy, placing compliance and digitization at the heart, with these considerations in mind today, and you'll be better off tomorrow. Sources: 1.Suzuki, Yasushi; Highfield, Richard. "How digital technology can raise tax revenue in Asia-Pacific." Asian Development Blog, 13 Sept. 2018, https://blogs.adb.org/blog/how-digital-technology-can-raise-tax-revenue-asia-pacific./ 2.Hovancik, Andy. "How Modern Taxation is Driving Digital Transformation in Finance." Payments Journal, 16, Jul. 2018, https://www.paymentsjournal.com/how-modern-taxation-is-driving-digital-transformation-in-finance/. 3. Schliebs, Henner. "2019 CFO Priorities: Experts Predict Top Trends." Digitalist Magazine, 18 Dec. 2018, https://www.digitalistmag.com/finance/2018/12/18/2019-cfo-priorities-experts-predict-top-trends-06195293. 4.Szwarc, Leila. "Regulatory compliance – The new business enabler." Risk.net, 18 Mar. 2019, https://www.risk.net/regulation/6485861/regulatory-compliance-the-new-business-enabler.

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