As the World’s Economy Shifts, Here Are the Most Vulnerable Classes of Workers

Zurich Insurance Group recently issued a report that offers new insight into the fragility of the workforce as the labor market shifts due to technology and the increase in nontraditional work arrangements like gig economy jobs.

The report, entitled “Perceptions on Protection: Surveying Workers to Build New Agile Solutions,” was a collaborative effort between Zurich and the Smith School of Enterprise and the Environment at the University of Oxford.

It follows a November 2018 project that addressed social protections in the same vein. Essentially, both reports use Zurich data to address insurance gaps that arise when workers are more flexible and more likely to change industries.

Zurich calls this “increasingly non-linear and fragmented career paths” with shortfalls in savings and income that “fall to the individual worker.”

The researchers sought to answer three questions with the results of their extensive survey data, which was culled from 15 countries across Europe, Asia Pacific, North America and Latin America. In all, responses were gathered from 16,500 individuals:

1. Under what circumstances do individuals adapt their career and financial decisions to changing labor markets?
2. What are the main drivers or impediments in these processes?
3. What role does insurance play in individuals’ long-term planning for an uncertain financial future?

So Which Workers Are Impacted Most?

The “top line” results globally reveal several classes of workers that are likely to face additional challenges as technology and digitization challenge their skills. The first of these is female workers, due mainly to the fact that they were less likely to be supervisors (except in Brazil).

The authors note that: “Women were less positive about technological change and more worried about losing their jobs because of it. Yet they were also more risk averse: less willing to go freelance or move abroad for job opportunities, for example.” In addition to these strikes, which have the effect of widening the gender gap, women self-reported less knowledge about income-disruption products they could purchase from insurance companies.

Perhaps unsurprisingly, the second class of vulnerable workers were those that performed primarily manual tasks, referred to in the report as “manual workers.”

However, an interesting finding appeared between types of manual workers. Manual routine workers and manual creative workers reported the same rates of fear regarding the possibility of technology making their jobs obsolete — 27%. Further, both groups said that technology has made their job situation worse in the last 15 years at the same rate — 20%.

Compounding these anxieties is the fact that manual workers were much more likely to work part-time, at a rate of about 47% for manual routine and 43% for manual creative.

This is significant compared to what the report refers to as “knowledge workers,” who had rates of part-time work at 36% for the knowledge routine category and 33% for the knowledge creative population.

Other Top Findings on Employee Concerns and Goals

In a finding that the researchers described as “surprising,” millennials were as likely as older adults to have saved part of their income in 2018. A full 63% reported some savings.

Further, retirement and monthly bills were neck-and-neck in terms of top financial anxieties. Thirty-two percent of millennials said retirement was the top concern, while 34% said monthly bills were most worrying.

Another consistency in the data was intergenerational attitudes toward technology and its effects, which were cautiously optimistic. Regardless of age, roughly 23% of respondents said that technology has made things worse, while 53% said such advancement had improved their job status.

However, older people were “noticeably more relaxed” about the impact technology could have in the near term.

Flexibility in the modern job market is generally considered an asset, although it can be closely coupled with job instability and frequent job hopping. The researchers defined flexibility as “opening up other career opportunities” like freelancing or moving abroad for a job.

A relatively high number of respondents — one fifth — thought that they were likely to lose their job in the next year. However, 27% said they were planning to leave their jobs in the next year anyway. The report assessed this as “readying themselves to become freelancers.”

Finances Remain a Top Concern

Overall, in the totality of age groups and in all 15 countries, respondents rated “having adequate retirement savings” as their most pressing financial concern.

The authors note that this concern outpaces all other worries by a large margin — 44% indicated as much.

It was followed by “paying monthly bills,” which was the top concern for 27% of respondents.

The researchers imply throughout the report that appropriately insuring oneself (either by private policy or membership in a group plan) as the best way to relieve instability in today’s variable work environment.

Later in this set of research, Zurich and Oxford will dive deeper into individual country profiles and the priorities of employers as technology continues to disrupt ingrained global industries. &