Innovation

Blockchain in HR: Interesting Use Cases for Human Resources

29 July, 2019
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"Blockchain technology will be integrated directly into the HR function through a multitude of use cases—lending transparency and trust. "

There is a significant opportunity for blockchain to establish itself in human resources. Learn about HR blockchain use cases.

Blockchain technology is perhaps best known for its role in safeguarding the cryptocurrency infrastructure (e.g. Bitcoin), making financial transactions secure without the need for a bank or a middleman. But the technology is eyeing a landing in the human resources space, which will inevitably change the way that HR professionals handle large amounts of sensitive employee data and deploy various HR processes.

As blockchain technology becomes more mainstream and accessible, all members of the HR department—from recruiters to the senior leadership—will likely find it disrupting their daily workflows, including the recruitment process, 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. It can even simplify cross-border payments by automating real-time exchange rates and other jurisdiction parameters, which hold implications for businesses that hire and operate globally.

One of the first challenges HR professionals face is understanding the fundamentals of what blockchain is and how it functions. Simply put, a blockchain is a distributed digital public ledger used to keep track of records. The term block is simply another word for record. A blockchain, at its core, is simply a chain of records. Blockchain is special and distinct from other recordkeeping systems because it relies on a distributed ledger, meaning the chain of records is subsequently stored across a large network of independent computers. This decentralizes and encrypts the data, making it safe and secure.

The high level of security makes blockchain technology a good match for the HR industry, which is often charged with managing large amounts of sensitive data about a company and its employees.

Despite all the ways blockchain technology could potentially disrupt human resource management, HR teams need not panic. There is still some time to prepare for the coming blockchain revolution—and the technology has a strong track record of success in the industries it has touched so far. 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.

While just 0.5% of the global population is currently using blockchain technology, the demand is rising and it is expected that 80% of the population will be involved with blockchain technology in some capacity within 10 years. For HR teams, the mainstream adoption of blockchain could unlock value and benefit for employers and employees alike, starting with the ability of hiring managers to put the right people in the jobs.

To show how it could work on both sides of the employer relationship, blockchain can enable individuals to maintain, secure and offer controlled access to a comprehensive blockchain-driven digital ID that includes critical information about them to employers. This could include education, skills, training and professional performance. Through this digital ID, individuals would be able to turn their credentials into real value in the employment market while employers are able to identify the right employees more accurately and effectively through data-driven insights.

If its success in banking and supply chain is any indication, blockchain is poised to innovate the ways we manage human capital in many different capacities.      Now is the time that the industry is piloting and envisioning various use cases.

Examples of use cases for blockchain HR
 

Blockchain is disrupting many of the industries that HR departments work alongside with in order to manage human capital. For example, aside from blockchain’s prevalence in the banking industry, Forbes has identified the healthcare industry as one of the top industries likely to be disrupted. According to Bitfortune, 55% of healthcare applications will adopt blockchain for commercial deployment by 2025. HR departments will therefore need to be on the forefront of the evolving healthcare landscape—including the implementation of blockchain—so they can continue to be an authority on delivering healthcare plans and wellness programs to employees.

But the use of blockchain will be more than just a concept HR professionals need to be aware of for partnership purposes. Because the HR department is the keeper of so much of the data that is critical to employees’ lives and how a company operates, blockchain technology will be integrated directly into the HR function through a multitude of use cases—lending transparency and trust.  

1.  Strengthen security for sensitive personal & financial data.
 

HR teams are tasked with conducting some of the highest-volume financial transactions for an organization as well as handling sensitive employee data related to pay, healthcare, finance, banking, disciplinary records, performance records, expense reimbursement, and more.

All of the data an HR department maintains is at risk of being exploited and, as more companies face data breaches, it is of utmost importance that safeguards are in place to prevent fraud and maintain security. In the face of rising cybersecurity crime, blockchain technology is being lauded as a solution.

Blockchain’s role as a game-changer for human resources is defined by its security capabilities. In fact, blockchain has proven itself to be so effective for risk management and software security that even aerospace and defense giant Lockheed Martin is using it.

Implementing blockchain can help thwart both internal fraud and external hacks of sensitive employee records. Access to the blockchain is limited and controlled and even those with access can’t arbitrarily make changes to the record. This limits both internal fraud and external hacks of sensitive employee records.

With the rise of the Internet of Things (IoT) in HR, there is growing concern as hackers often get in the door by strategically exploiting weaknesses in edge devices. The vigilance applied to computers is often neglected when ensuring the security of IoT devices, leaving organizations vulnerable to hacks. Blockchain offers strong protections against data tampering by locking access to IoT devices and shutting down compromised devices within the IoT network if a security event is suspected.

Blockchain serves to effectively decentralize data as a key defense against hacks and fraud. Data is part of a company’s currency in the digital age. It is fast becoming one of the most prized assets 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 finds this location? Because blockchain spreads data across a large network of computer storage spaces, it is like placing your most valuable belongings across a multitude of locations to mitigate your risk of being severely impacted or wiped out by a single hacking event.

2.  Improve recruiting processes, verification of job qualifications & background checks.
 

Whether we call it lying, embellishing or stretching the truth about work history, we know that sometimes what you see on a candidate’s CV is not always what you’re getting. A reported 75% of HR managers have identified a lie on a CV. With nearly 20% of hiring managers also reporting they spend less than 30 seconds looking at a CV, it is impossible to know how many fabrications actually go undetected.

Perhaps the greatest advantage that blockchain can offer is trust in the veracity of its data. In current recruitment systems, it is difficult to determine the accuracy of a potential employee’s work and education history. Even the most seasoned recruiters can be deceived by a candidate’s falsified employment history and education credentials.

Traditionally HR managers have relied on CVs, which applicants can modify and embellish. While LinkedIn and reference calls can be used to verify some information, these methods only provide a thin layer of verification. Additionally, these analog processes can also be time consuming and a hassle. 

As many HR professionals can confirm, conducting a traditional background check can be slow and expensive. It can also place a burden on candidates, requiring numerous forms to be filled out. Blockchain can reduce the labor and expense currently associated with background checking.  

Although blockchain cannot guarantee all inaccuracies or exaggerations will be detected, it can effectively reduce incidents. It also provides employers with the most accurate snapshot of a candidate’s credentials and background.

The benefit of blockchain is also passed on to candidates in the form of confidence, allowing them to apply to roles that they know they are qualified for. It also mitigates the concern that other candidates might be getting ahead of them by applying to the same job with fraudulent resumes and qualifications. This transparency levels the playing field for all candidates

3.  Streamline payroll, contractor payments & vendor tracking.
 

One of the most common use cases for blockchain HR involves a company’s largest expense and the process that employees appreciate the most: payroll. Blockchain has the power to replace many of the manual tasks and eliminate time lags within current payroll systems. Blockchain also offers ‘smart contract’ solutions that allow a company to automate and secure payments to contractors and vendors.

Global companies in particular could enjoy benefits with blockchain when it comes to issuing cross-border payroll to employees in overseas jurisdictions. Blockchain automatically sifts through exchange rates and communicates with intermediary banks so employees can be paid quickly—and at a lower cost to employers in the long term.

Through smart contracts, some organizations are using blockchain to pay out 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 writes out in code a set of parameters using statements in ‘if this, then that” (IFTTT) language. These contracts can be designed so that, once put in motion, the payment process is made entirely dependent on these codes. It is also made irreversible unless of course terms of a contract need to be updated.

When a certain number of hours of work have been completed (this would be a potential ‘if this’ variable), the smart contract automatically pays the employee, contractor or vendor the correct payment (a ‘then that’ variable) by deploying the ascribed piece of remotely executable code. This code is linked to an instruction from the company’s bank account to the contractor’s bank account, which ultimately facilitates the payment.

HR would not need to contact their company’s bank or do a monthly payment run. Instead, the transparent, real-time blockchain ledgers help track invoices and facilitate distribution, billing and reporting of transactions. There is also no need to wait for the usual payroll processing time.

The smart contract functions as a guarantee that work is completed and that the payment will make it to the employee, contractor or vendor properly and in a timely fashion.

4.  Automate taxes & mitigate the strain of audits.
 

Taxation plays a critical role in the life of a business or an individual. For HR professionals, constantly evolving tax laws and regulations across jurisdictions ensure they often have their hands full properly issuing taxes. Payroll taxes are then only further complicated by other factors like bonuses, commissions, overtime pay, back pay, accumulated sick time pay, human resources expenses, and beyond.

Blockchain’s keen ability to record and update employee tax considerations and provisions automatically is catching the attention of the HR industry. By wielding the capability to streamline and secure the taxation process, it is likely that blockchain-powered platforms will become the record of choice for HR departments around the globe.

Speaking of taxes, no business wants to be hit with an audit but it does happen. Audits are so daunting that it has actually held back countless businesses that only feel comfortable maintaining physical record systems, despite the time, energy and money they require to properly upkeep.  

If presented with an audit, having blockchain technology already in place is like having a life preserver thrown out to you while you’re struggling to stay afloat in choppy waters. The blockchain makes it easier for a business to sustain an audit because it can securely share its records with regulators in near real-time. The time and cost spent for document collection is subsequently reduced drastically. Furthermore, the blockchain’s cryptographic hashes and source verification build a strong barrier against document manipulation and fraud.

5.  Enhance employee experience with better access to benefit packages & a dynamic expense reimbursement system.
 

HR and employees alike will appreciate blockchain’s ability to expedite access to benefits packages. Once employers outline the terms of employment prior to hiring, it is HR’s responsibility to uphold the conditions in the contract. The traditional model requires manual implementation of provisions that might impact an employee’s benefits package, running risks of errors or preventing proper delivery of benefits.

Inputting these terms into blockchain technology instead allows HR to seamlessly deliver upon these benefits. For example, if a company outlines that an employee’s healthcare benefits are due to kick in after a 90 day waiting period, the blockchain technology can be engineered to implement those benefits at the right time. Again, this is coded through the same IFTTT language that governs smart contracts.

Apart from healthcare benefits, Blockchain can potentially offer a more robust approach to pay scales by applying defined salary increases for identified skills or key capabilities that are deemed valuable to the company. They can also administer performance-based bonus awards to employees in a more measurable, data-driven way.

Blockchain expands on the employee experience even in the realm of expense reimbursement. In its current format, reimbursing employees can be nebulous and time consuming. For employees, they are often forced to wait for paperwork to go through and checks to clear. For HR, it can also create pain points and expend time and energy.

Blockchain is disrupting the expense reimbursement scene by allowing organizations to create their own company currency. In developing an individualized cryptocurrency unique to their company, organizations will reduce expenditures associated with the current expense reimbursement process: elimination of processing fees, accounting for international exchange rates, reducing in-house HR staff, etc. This also appeals to both parties in the transaction and provides corporate mobility, with businesses now having the ability to easily reimburse between various jurisdictions.

With current reimbursement system, there is an ongoing conflict between employer and employee about what should be compensated, what should not, how, when, etc. Blockchain-led solutions ensure transparency, with all company-funded transactions linked into the blockchain network.

Though initially cultivated in the cryptocurrency industry, blockchain is branching out into the world of work. There are many potential uses for blockchain technology, which could disrupt hiring, payroll, taxation, benefits administration, data storage, and so much more. Despite current challenges in cost and scalability, the case for blockchain HR is strong.

Promoting transparency and trust in company processes are two priorities for HR professionals as they manage human capital and face a competitive hiring landscape. While the technical performance of blockchain technology and its ability to encrypt and offer laser sharp accuracy are hardly up for debate, blockchain’s success will ultimately depend on how well it is able to infuse trust and transparency into an organization’s operations.   

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Abdulaziz Alajlan | 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/.

Varun Khosla | 03 Oct 2019

For decades, any conversation involving startups and executive compensation conjured images of Silicon Valley and shiny office buildings full of technology virtuosos working for innovative companies striving to be the next billion-dollar unicorn. Now, a new era of global startups is taking root in previously unexpected regions around the world. In fact, recent research reveals that $893 million was invested in 366 startups throughout the Middle East and North Africa. That number represents a $214 million increase from 2017, which saw $679 million in startup investments.1 Similarly, startups are increasing in Southeast Asia, largely driven by "SEA turtles" — locally born residents who studied and worked overseas (mostly in the West, in places like Silicon Valley) and are returning home to launch their own startup companies. The region has experienced a major inflection point, with VC investors in Southeast Asia investing over $7.8 billion across 327 deals.2 There's one key component all these startups need, however: leadership. But attracting and retaining executive-level talent and management teams can be a major challenge for these burgeoning startup hotbeds, especially when it comes to compensation. Corporate Investors Are Changing Executive Compensation   Many of the world's most recognizable startups were launched by charismatic, individual founding partners, such as Jeff Bezos, Jack Ma and Mark Zuckerberg. However, the rise of these luminaries and their compelling stories do not mirror the new era of startups blossoming around the world. In the Middle East and North Africa (MENA), for example, investment companies are providing the initial financial backing needed to launch startups. These investment companies are there from day one to ensure the startups have the capital needed to secure subsequent rounds of funding. Additionally, the executives of these startups are not the original founders and, therefore, desire different compensation models to secure their continued loyalty, creativity and commitment. Acquiring top C-level talent for startups can be a daunting task, as the risk level is high for businesses that do not have a proven track record — or any record at all. Traditionally, western-based startups have fashioned executive compensation packages around medium- to long-term benchmarks predicated on the company's expected growth, but triangulating growth models, investment strategies and executive payment packages can be a complicated and tenuous proposition. Since most global startups today are built around investment companies instead of inspirational individual founders, these companies must be diligent when determining how or how much to pay the executives — who can ultimately mean the difference between success and failure. How Much Should Executive Compensation Be?   Investment companies naturally want to maximize their profits, which means they want to retain as much equity in the startup and as many shares of the startup as possible. Every dollar, share of stock or option paid to startup executives is money the investment companies surrender to operational costs. However, low-balling startup executives or opting to hire those who aren't as skilled or experienced also comes with the risk of undermining the startup's ability to compete, grow and drive revenue. Financial arrangements that provide management with a potential share of equity (or shadow equity) require careful thought and consideration. An executive compensation plan must act as an incentive and retention device for startup executives while delivering a fair return to investors and shareholders who have funded the company. Investors and shareholders must decide how much dilution of equity they are willing to accept to provide an appropriate equity pool for the management team. This is why many companies decide to execute a scaled approach that decreases the size of the equity pool with each round of funding to accommodate the increasing value of the company. This type of program impacts the dilution of equity and can allow for more creative compensation strategies — particularly when dealing with more sophisticated startups, such as in the pharma and fintech industries, which require the talent and knowledge of more accomplished professionals and leaders. Investment companies can offer either share options, which give employees the right to buy or sell stock at a designated time and price, or full-value shares, which offer employees actual ownership in the company. Both contribute to the dilution of equity, but options typically contribute more to the equity dilution than full shares. For example, an equity pool comprised of options may amount to 15% to 20% of a company's capital, while a pool comprised of shares may amount to as little as 3% to 5%. This indicates the same amount of long-term incentive awards paid in options will lead to higher equity dilution than awarding full shares. Investment companies must determine which strategy best suits their objectives. When to Pay Executives and Management   Should investors pay their executives and management teams only after they have received a return on their investments? Or should executive compensation be based on employees performing their jobs to the best of their abilities, regardless of the outcomes — which are often determined by external economic forces beyond their control. Many startups now implement the former strategy, believing that benchmarks for returns on investments motivate executives and provide them with the extra incentive to do everything possible to create shareholder value. In fact, in a majority of cases, long-term incentive plans only pay out when investors receive a return. Alternately, some startups choose to compensate executives and management based on specific, mutually agreed upon corporate goals and objectives. Compensation can then be provided as cash or shares, though there may be restrictions on when those shares can be sold or vested or whether they come in the form of options or full-value shares. Startups are popping up all over the world, ushering in a new frontier of ideas and innovation, as well as investors and executives who will create the next generation of future unicorns. As new trends continue to emerge for how executives in these startups are compensated, global startups will need to review their options with scrutiny to attract the best executive talent while maximizing returns for investors. Sources: 1. "2018 MENA Venture Investment Summary." MAGNiTT, January 2019,https://magnitt.com/research/2018-mena-venture-investment-summary. 2. Maulia, Erwida. "Southeast Asian 'turtles' return home to hatch tech startups." Nikkei Asian Review, 22 May 2019,https://asia.nikkei.com/Spotlight/Cover-Story/Southeast-Asian-turtles-return-home-to-hatch-tech-startups.

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,http://www.xinhuanet.com/english/2018-12/23/c_137693489.htm. 2 Heimburg, Fabian von, "Here are 3 lessons Europe can learn from China's flourishing start-ups," World Economic Forum, September 15, 2018,https://www.weforum.org/agenda/2018/09/3-lessons-europe-can-learn-from-china-flourishing-start-up-ecosystem/. 3 World Payments Report 2018," Capgemini and BNP Paribas Services, https://worldpaymentsreport.com/non-cash-payments-volume/. 4 State Council of China, "Made in China 2025," IoT One, July 7, 2015,http://www.cittadellascienza.it/cina/wp-content/uploads/2017/02/IoT-ONE-Made-in-China-2025.pdf. 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,https://fas.org/sgp/crs/row/IF10964.pdf. 6Gross domestic spending on R&D," Organization for Economic Co-operation and Development (OCED), accessed on April 1, 2019,https://data.oecd.org/rd/gross-domestic-spending-on-r-d.htm.https://data.oecd.org/rd/gross-domestic-spending-on-r-d.htm. 7CAICT under MIIT, "China's digital economy surges 18.9%, drives growth," China Daily, July 20, 2017,http://www.chinadaily.com.cn/business/2017-07/20/content_30179729.htm. 8Wenway, Winston Ma, "China's mobile economy, explained," World Economic Forum, June 26, 2017,https://www.weforum.org/agenda/2017/06/china-mobile-economy-explained. 9Digital Transformation Strategies: How are They Changing?" Jabil,https://www.jabil.com/insights/blog-main/how-are-digital-transformation-strategies-changing.html.

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Abdulaziz Alajlan | 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/.

Patrick Hyland, PhD | 17 Oct 2019

Feeling stressed by your management responsibilities? If so, you're not alone. In our latest norms, we found that just 67% of leaders and managers think the level of stress they experience at work is manageable; the other third was unsure or overwhelmed. A similar percentage said they struggle to maintain work-life balance. Just half of leaders and managers feel they have enough time to do a quality job, and only 48% feel they can detach from work. These results suggest that anywhere from a third to a half of leaders and managers are struggling to cope with the challenges of their job. When confronted with statistics like these, some just shrug and sigh: "Stress is part of the job, isn't it?" Based on a growing body of research, that's a dangerously defeatist perspective. Aside from the health risks associated with stress, there are a number of dysfunctional workplace dynamics that can emerge when leaders feel rundown, exhausted or emotionally drained. Barbara Fredrickson, Ph.D., for example, has found that negative emotions can trap people in a flight, fight or freeze mindset that limits their ability to think creatively and develop innovative solutions. Janne Skakon and colleagues1 have found that the way leaders cope with their stress trickles down, impacting their employees' own work experience and stress levels. And at Mercer|Sirota, we've found that overwhelmed managers are significantly less likely to recognize and praise their direct reports. If you're chronically stressed at work, it's time to stop buying into the myth that leaders and managers must be selfless martyrs. You're putting your own health and well-being, along with your team's effectiveness and engagement, at risk. Instead of working yourself to exhaustion, start developing a self-care strategy to manage the demands of your job. Here are four steps to consider: 1. Recognize the Warning Signs   Burnout — a state of physical, mental and emotional exhaustion often accompanied by self-doubt and cynicism — is a serious issue. Researchers have found prolonged periods of burnout can lead to a number of physical and mental health problems, including depression, anxiety, heart disease, high cholesterol, stroke and type 2 diabetes. Burnout can manifest itself in a number of ways, including increased irritability, decreased motivation, changes in eating or sleeping habits, or unexplainable aches and pains. 2. Rest and Recover   If you find you are experiencing burnout, you need to take immediate steps to get help. Start by telling someone what you are experiencing. Tell your boss, an HR business partner or a colleague. If you don't feel comfortable telling someone at work, then (a) realize you may be working in a toxic organization2 that is not healthy for you and (b) be sure to tell your family, friends or your doctor. If you remain silent, your exhaustion could lead to isolation and compound your problems. After you have shared your concerns, start finding ways to detach from work. Stop checking email the moment you wake up. Skip unnecessary meetings. Lighten your load. Take a mental health day. If you can reduce your hours or take a vacation, do so. Find ways to rest and reset so you can recover. 3. Reflect and Reorient   After you've gained some distance from your experience, it's time to start identifying the factors that led to your burnout. Start by reflecting on the timeline of events. When did your stress levels first start to rise? What was going on at work? Outside of work? Have you had this experience before, or is this the first time you've experienced burnout? Next, reflect on the nature of your stress. As you've probably heard, stress is not always bad. Researchers have found that challenge stress — the stress associated with achieving an important goal — is positively related to job satisfaction. Hindrance stress — the stress associated with barriers that prevent us from getting work done — is negatively related with job satisfaction. If you've had a burnout experience, you've probably been dealing with a lot of hindrance stress. With that in mind, think about the way work gets done in your organization. Some experts argue that burnout is the result of working in a dysfunctional organization. Finally, consider your own personality, values and attitudes toward work, your organization and your job. Researchers have found that people with certain personality traits are more prone to burnout.3 Through these reflections, your goal is to learn from your experience and gain insights that will prevent future episodes of burnout. 4. Rebuild a More Resilient You   If you have gone through burnout, the good news is this: you can use this experience to become a stronger, wiser and more resilient person. But that will require intentional effort on your part and a commitment to practicing self-care. As you design your own self-care plan, realize that multiple pathways exist. Start by rethinking your approach to your job; you will probably need to change some of your workday habits. Your physical health is critical: researchers have found that leaders and managers are more effective when they are eating right, sleeping well and getting exercise. Your mental perspective is also important: Stanford psychologist Alia Crum has argued that stress can be good for leaders if they know how to manage it. Be sure to consider your emotional response to the vicissitudes of work and life: research suggests that psychological flexibility and emotional agility can make you a more effective leader.4 And as you build your self-care plan, be sure to take a holistic approach, considering all aspects of who you are and what's important to you: research shows that your spiritual life — those aspects of your life that provide a sense of meaning, purpose and coherence — can help increase your resilience. As you consider these four steps, remember this: if you're not taking care of yourself, you're not going to be able to take care of your team — at least not for the long haul. At some point, your patience, your health, your energy, or your effectiveness is going to give. Without some type of self-care strategy, you're doing yourself — and the people who depend on you — a disservice. Sources: 1. Skakon, Janne; Nielsen, Karina; Borg, Vilhelm; Guzman, Jaime. "Are Leaders' Well-being, Behaviours and Style Associated with the Affective Well-being of Their Employees? A Systematic Review of Three Decades of Research." An International Journal of Work, Health & Organisations, Volume 24, Issue 2, 2010,https://www.tandfonline.com/doi/abs/10.1080/02678373.2010.495262. 2. Appelbaum, Steven and Roy-Girard, David. "Toxins in the Workplace: Affect on Organizations and Employees." Corporate Governance International Journal of Business in Society, 2007,https://www.researchgate.net/publication/242349375_Toxins_in_the_workplace_Affect_on_organizations_and_employees. 3. Scott, Elizabeth. "Traits and Attitudes That Increase Burnout Risk." Very Well Mind, May 20, 2019,https://www.verywellmind.com/mental-burnout-personality-traits-3144514. 4. Kashdana, Todd B. and Rottenberg, Jonathan. "Psychological Flexibility as a Fundamental Aspect of Health." Elsevier, Volume 30, Issue 7, November 2010,https://www.sciencedirect.com/science/article/pii/S0272735810000413?via%3Dihub.

Dr. Avneet Kaur | 03 Oct 2019

The use of on-site clinics has been growing in recent years, with businesses realizing the potential for giving access to quality and timely care to contribute to an increase in productivity, reduce absenteeism and improve employee health. But, are you reaping the full benefits of your on-site clinics? Or, are you just focused on meeting legislative requirements? There are three key things you can do to unlock the full potential of your on-site clinics. In a recent Worksite Medical Clinics Survey, employers with on-site clinics saw a return on investment (ROI) of 1.5 or higher. If you're not seeing similar returns, it may be because your on-site clinic isn't moving beyond basic requirements. Create a Patient-centered Clinic   Ensure the services offered by the clinic are suited to your employees. This will eliminate unnecessary spend on under-utilized services and steer you toward investments that will bring a greater sense of satisfaction, positive health outcomes for your employees and, consequently, a positive impact on your bottom line. Understand what your employee population looks like — in terms of age, gender and nature of work — as this will play a large role in understanding what type of health and social care services, as well as specialists, are needed. In addition to demographic information, it's critical to understand the health needs of your employees — for instance, which common illnesses are prevalent and need to be better managed and which key lifestyle risks need to be averted through education or preventative services. Communicate the Value   The adage of "if you build it, they will come" might not be the best way to yield the desired ROI in this case. It's important to shape communications around services offered on-site by highlighting the value they bring to employees: convenience and easy access to care, coordination and orientation toward quality providers, early detection of illnesses, etc. Effective communication will bring increased utilization and early detection, maximizing your investment as an employer while also contributing to the well-being of your employees. On-site Clinic: The Wellness Hub   When on-site clinics are designed and managed correctly, there's a high return for both employer and employee. Well-designed clinics can play a real gatekeeping role, coordinating employee pathways toward high quality providers and wellness vendors. They can also directly provide prevention and employee education services, which are key to avoid acute and costly care events. At Mercer, we help clients implement the 4-C model of effective on-site clinic management. This extends the value of your clinic from meeting legislative requirements to allowing employers to deliver quality health services that focus on value to the employee. To maximize your on-site clinic, reach out to us today.

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