The big risks: economy & skills shortages stay on top of the list – Belgium

Of all these risks and for all of the risk managers, the state of the economy is still the biggest problem. For Carl Leeman, Chief Risk Officer at Katoen Natie, an international logistics service provider, it is the speed of change in the economic situation that poses the problems. “It is not stopping. It is increasing. That means that we have to take drastic steps to move with the changes in the economy,” he said. This is a global phenomenon, said Mr Leeman, rather than just a Belgian or a European matter.hide“Countries all over the world are having to adapt to situations and we face more rules and regulations as we go into new territories. This is making it more difficult to operate in emerging markets. On top of that we as Europeans are also making our own life more and more difficult by inventing new rules and regulations on a daily basis. For example, the very tight anti-bribery laws in the UK could be a regulatory nightmare in other countries.But there is also useless EU regulation such as Solvency II,” he continued. Emerging markets are seen as both a risk and an opportunity by an increasing number of Belgian and European companies, said Gaëtan Lefèvre, President of Belrim and Group Risk and Insurance Manager at engineering group CMI. “We need to go outside our borders to develop new products. The problem is in finding the right market,” he said. Consequently engineering companies and other industrial companies are embarking on two to three year projects in emerging markets like Africa or Asia but stopping short of establishing a ‘bricks and mortar’ presence that involves investment in local assets. “At a global level, we certainly see increasingly more companies seeking growth opportunities in emerging markets,” said Rudi Casteels, Client & Distribution Leader, Benelux Region for XL Group, the project sponsor who represented the insurance industry in the discussion. “Of the 1,600 global programmes we lead, one third or more already have one or more policies in Asia and/or Latin America. We believe that this number will continue to increase, especially as a result of the euro-crisis,” he said. Another factor driving Belgian companies to look beyond their borders is a conspicuous imbalance in the local labour market. In essence, explained Dr Marie-Gemma Dequae, Scientific Advisor at European risk management association Ferma, there is a skills shortage. “Engineering schools are not growing at a rate required to realise the technical innovation that is needed. There is a problem convincing students to go into the more technical side. Every year technical services departments cannot find enough graduates to fill the vacancies they have,” he said. The difficulties in the labour market are not limited to Belgium though, said Sonia Cambier, Risk Manager with Solvay, the international chemicals and plastics group. Asia has for many years been seen as a source of cheap labour but wages in the region are increasing, said Ms Cambier. There are also more jobs available to local workers which means that manual labour positions compete against jobs in the service industries. For example, Mr Leeman cited the difficulty of recruiting forklift operators for a factory in Singapore given that many are now choosing to work, for a higher salary, at the local casino. One positive consequence of the maturity of the labour force in emerging markets is that it may lead to a number of jobs returning to Europe and curb the offshoring and outsourcing trends that have prevailed over the last decade. For example, even countries like France, with its long history of trade union disputes, are becoming attractive domiciles for new investment, said Ms Cambier.

The big risks: economy & skills shortages stay on top of the list – Belgium

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