Fit for purpose: ongoing skills gap challenge rises up the risk agenda

As Brendan Plessis, head of emerging markets for XL Catlin, told delegates at the Risk Frontiers – East Africa one-day seminar, organised by Commercial Risk Africa, jobs are changing dramatically. Companies, he said, must keep pace with the speed of change, however without the right people in place that will be an impossible task. “Bear in mind,” he told more than 110 attendees at the event in Nairobi, “that some 60% of young people will be employed in jobs that have yet to be invented.” Last year, the Foundation for Young Australians said 70% of young people are entering the jobs market in roles that will most likely be rendered obsolete by automation.hideThe UK is concerned too, with research suggesting up to one third of existing jobs could be obsolete within 20 years. The risks are just as high in Africa, where technology is enabling businesses to leapfrog the old systems and employment patterns of more developed markets. The African Economic Outlook states that, with almost 200 million people aged between 15 and 24, Africa has the youngest population in the world. It expects the number of young people in Africa to double by 2045. Between 2000 and 2008, Africa’s working-age population (15-64 years) grew from 443 million to 550 million; an increase of 25%. “In annual terms, this is a growth of 13 million, or 2.7% per year. If this trend continues, the continent’s labour force will be one billion-strong by 2040, making it the largest in the world, surpassing both China and India,” the study suggests. Another report from McKinsey puts this into scale in terms of the jobs market. It notes: “Despite the creation of 37 million new and stable, wage-paying jobs in the past decade, only 28% of Africa’s labour force holds such positions. “If the trends of the past decade continue, Africa will create 54 million new stable, wage-paying jobs in the next ten years – but this will not be enough to absorb the 122 million new entrants into the labour force expected in the same period. “However, by implementing a five-part strategy to accelerate the pace of job creation, we estimate that Africa could add as many as 72 million new wage-paying jobs over the next decade, raising the wage-earning share of the labour force to 36%.” Mr Plessis believes there is a huge opportunity for the insurance industry and risk managers alike to attract young people to their disciplines. “Our time is now,” he said, “and we must grab it.” Risks around skills have been identified by participants in Commercial Risk Africa’s annual survey of risk managers and this year is no exception, with contributors so far saying it is one of the fastest-growing risks. Some have alluded to the need for succession planning but for most, it is about attracting young people to the risk profession and then being able to evidence a career path. Mr Plessis said recent travel had taken him to Mexico, where the average insurance sales person is 54 – and male. “That is everything that is wrong just there,” he said. “We have to get away from this perception of our industry.” He said there is a real need to reduce the protection gap across Africa and to do that the market must engage with other players but also, importantly, non-market interests. Instead of sticking to old methods of distribution, he said it is important for the sector to embrace new technology. Talking to the millennials, he said, was critical in understanding the best forms of communication to reach new and emerging markets. There are three approaches to addressing the protection gap, Mr Plessis believes. The first is thinking about the macro environment and engaging with governments, markets and other interested parties such as NGOs and the media. He said: “We need to be considering everything from ebola to terrorism. We all need to be much more engaged with the non-market interest. At the other end of the scale, we have microinsurance and how do we do better at directing insurance to those who need it the most?” But Mr Plessis added that whatever part of insurance and risk transfer is discussed, the key remains with the people. “If we reduce the talent gap it will reduce the protection gap,” he stated. For the future, he said, insurtech and fintech stand to change the operating environment in Africa, “more so than anywhere else in the world”. “The real commodity of Africa is its people,” he added. Mr Plessis continued: “We have the fastest rate of urbanisation of anywhere in the world here in Africa, according to McKinsey, with a huge shift to the cities but also the working-age population is growing profoundly.” He mentioned the rapid spread of mobile technology and the increased access to information that comes with it. Again, he stressed, the key to making the most of those opportunities would come from the development of talent. The lack of access to education has been a barrier to people developing their potential but changes in technology should change that – and it could happen overnight. Helping each other will be another important development and delegates were urged to consider mentoring; encouraging young people coming into the sector to look at all forms of self-development from taking professional qualifications to improving their soft skills too. “One of the most important assets in any organisation is its people but how do we retain our talent and maximise the opportunities that lie within?” he asked. Through allowing staff to develop as they wish, firms can actively improve their workforce but also build loyalty, delegates heard. Paying for exam fees, giving staff time off to study and actively encouraging them to study with fellow staff members all engender good will towards the employer and reduce staff turnover figures. In an age when firms are facing some of the fastest-emerging and most disruptive forms of competition, it is essential, delegates heard, that staff turnover is limited but also that there are opportunities to bring in the right talents to meet those challenges.

Fit for purpose: ongoing skills gap challenge rises up the risk agenda

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