Aussies face into new world of work more positively than global peers

From

Tim Bailey

The nature of work continues to evolve, with technology creating more opportunities for self employment and ‘gig work’, and movement between jobs, industries and locations becoming more commonplace.

However, this increase in flexibility has come at a cost, with workers prone to more gaps when it comes to job and income security. At the same time, mechanisms that have previously provided safety nets and financial protection have failed to evolve at the same rate, leaving employers, insurers and governments with significant challenges if they are to adapt to the new world.

A landmark global study by Zurich Insurance Group (Zurich) and the Smith School of Enterprise and Environment at the University of Oxford has identified the groups most vulnerable to this changing work environment, examining their concerns across a range of related topics, including the perceived impact of technology on their jobs, their financial anxieties, and their knowledge and understanding of insurance protections.

The headline findings of the research, conducted across 17,000 respondents in 15 economies including Australia, include the extent to which inadequate retirement savings is a global concern (even amongst millennials), and the vulnerability of women to the changing nature of work due to their (self reported) lower mobility and flexibility.

The Australian component of the research saw more than 1,000 working age Australians surveyed, and revealed some key differences from the global results:

  • Australians are amongst the least concerned that they will lose their jobs to technology
  • They are amongst the most likely to become a freelance or self-employed worker in the near future
  • They are relatively better savers; and
  • Australian blue collar workers are more likely to have life insurance protection in place.

Commenting on the release of the survey findings, Mr. Tim Bailey, CEO of Zurich’s Australian Life & Investments business, said that the findings showed financial conservatism is common even amongst younger age groups.

“People of all ages are clearly worried about how to maintain their living standards when they retire”, he said.

“Whether you are 20 or 50, getting your retirement savings right is paramount; Coming at a time when the way we work is rapidly changing, the study is a valuable contribution to the broader debate about jobs and financial security and the policies that can help us respond effectively”, said Bailey.

The results also provide a timely reminder of the role of life insurance in optimizing retirement savings, a point often lost during the ongoing discussions about group life and member best interests.

“The policy basis for life insurance being such an important part of the superannuation system is the role it plays in mitigating any interruption to a person’ income stream – and ability to save – because of illness or injury”, said Mr. Bailey.

“That basis is as relevant today as it was in 1992 when the superannuation system was created.”

Global findings

  • Having too little saved for a comfortable retirement is the top financial worry. Across most countries and even age groups, almost half nominated this as their main concern, ahead of paying monthly bills;
  • Women are more vulnerable to changes in the working environment. They were significantly less likely to supervise others, they were less positive about the impact of technology on their job and future prospects and they showed less willingness/ability to change jobs and locations. They were also less knowledgeable about insurance protection options;
  • Millennials show strong financial conservatism. Around two thirds of them reported saving income. And around a third nominated retirement savings as their main financial concern (roughly the same as those nominating monthly bills as the priority);
  • Job instability is as likely to be voluntary as involuntary. One fifth of respondents think they are likely to lose their job in the next year. An even greater proportion (27%) said they planned to leave their job voluntarily within the same period of time.

The study is part of a major three-year research program with Zurich and University of Oxford (launched in November 2018) exploring ways to ensure more workers are provided with flexible protection and financial support in an increasingly fragmented labour market.

Read the full report, including the Australian results.

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