Annabelle Libeau
Word count : 1992/PIN : 10588 Subtopic 1
- Going Beyond The Grey Hair -
30/03/2009
Word count : 1992 /PIN : 10588
Going Beyond The Grey Hair: How Can Social Entrepreneurship Help To Sustain And Improve Senior Human Resources Management In Western Financial Institutions As Well AsAnnabelle The Libeau Whole Civil Society? Subtopic 1: Rethinking Entrepreneurship
of
Corporate
Social
Responsibility
(CSR)
and
Social
Even though Western countries are considered as the most advanced economies in all over the world up to now, large Western companies sometimes lack of coherence in the integration of Corporate Social Responsibility (CSR) into their way of doing business. According to the United Nations Environment Programme Finance Initiative (UNEP FI), CSR means “the approach to business which takes into account economic, social, environmental and ethical impacts for a variety of reasons, including mitigating risk, decreasing costs, and improving brand image and competitiveness”. More precisely, there is a crucial social, economic and even ethical issue that Western companies need to cope with since recently. This issue deals with the way large Western companies manage their senior human resources. Indeed, Western developed economies are facing to the ageing of their populations. Adopting a more proactive approach to tackle new demographic challenges could allow large Western companies to work on CSR considerations. Additionally, as major agents of change, social entrepreneurs may also bring innovative solutions to create a new paragon of society that would successfully incorporate its senior population into the overall system instead of marginalizing them. According to the worldwide NGO Ashoka, social entrepreneurs are “individuals with innovative solutions to society’s most pressing social problems. They are ambitious and persistent, tackling major social issues and offering new ideas for wide-scale change. Rather than leaving societal needs to the government or business sectors, social entrepreneurs find what is not working and solve the problem by changing the system, spreading the solution, and persuading entire societies to take new leaps”. As strong levers of economic and social growth in market-based economies, financial institutions may set a good example to illustrate how Western companies can manage their senior human resources better not only by improving their existing policies, but also by adopting innovative solutions based on social entrepreneurship, especially through microfinance. Thus, how can social entrepreneurship help to sustain and improve human resources management in Western financial institutions as well as the whole civil society? * * *
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Annabelle Libeau
Word count : 1992/PIN : 10588 Subtopic 1
- Going Beyond The Grey Hair -
30/03/2009
First of all, let us have a closer look at the population-ageing phenomenon that affects Western developed economies nowadays. Demography in Western countries suffers from a steep decline in fertility. By 2050 old people would represent around 10% of the Western countries’ population, which will put pressure on the overall economic system (eg: pension system, change in age pyramid structure in companies, etc.). As a result, we can expect several changes in demographic profile of Western developed markets: First, in age pyramid structure of large Western companies, senior employees categories (above fifty-year-old people) are growing. Most senior people are born in the fifties and are commonly named the “baby boomers” generation, turning into the “papy boomers” generation from now on Second, active working population from Western developed countries are too few to supply all labour market needs. Consequently, senior people may work longer than previously expected. Additionally, there is a tendency among Western developed countries to postpone the legal retirement age in order to keep qualified workers active as well as let them contribute longer time to the pension system Third, the average life expectancy is growing in Western developed countries. Therefore, the elderly are likely to live longer time and could be in better shape than decades ago thanks to medicine improvements All these changes in demographic profile of Western developed countries will undoubtedly have a significant impact not only on the civil society, but also on the business world. Therefore, large Western companies should more attentively consider and even review their senior human resources management in order to better integrate new demographic trends. * * * Adopting a more proactive approach to tackle new demographic challenges could allow large Western companies to work on CSR considerations, and more precisely on social, economic and even ethical aspects within their own business. The first solution that Western financial institutions can implement is a more appropriate human resources management for senior employees. This might mean to improve existing human resources policies and career development for their employees by adapting them to the senior category better. For instance, companies can propose better retirement incentives while a senior employee is about to leave the company after having reached her working-year legal quota. Acting as such is nothing wrong in itself, but today’s reality has repeatedly shown how dramatic a change from a working lifestyle to retirement lifestyle is when it is not prepared long enough. Moreover, the current global crisis has caused situations where workers are abruptly fired because of bankruptcy or economic and financial difficulties. These series of lay-offs will not benefit senior job seekers, who often appear less attractive compared to young workers – a better shape, less expensive and perhaps more flexible work force.
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Global Initiatives Symposium in Taiwan 2009
Word count : 1992/PIN : 10588 Subtopic 1
- Going Beyond The Grey Hair -
30/03/2009
In a word, the first solution that consists of betting on actual used human resources tools is not fully satisfied.
An additional solution to solve this issue may be social entrepreneurship oriented towards senior workers as well as the elderly. As major actors of change, social entrepreneurs may help senior people in various ways. First, social entrepreneurs can help senior people to implement new micro-businesses to allow them either to diversify their sources of revenues, or to provide them with an income if they were previously jobless or if they earn small pensions. For instance, a group of senior people specialized in financial analysis could build their own consulting company and offer their services to other companies, individuals or academia. Since social entrepreneurs have already created new innovative project for the benefit of the civil society, they are also able to share their experience and act as coach for people that either may be afraid of starting their own business at 50 or 60 years old, or may not be aware of such possibility. Second, social entrepreneurs can try to foster synergies between several groups of senior people. Synergies could be based on: A mutual exchange of knowledge approach. This means that social entrepreneurs can encourage senior people to enhance their professional and personal skills by training each other. Inter-generational meetings. For instance, young business managers who wish to start their own business may need professional and experienced help to advise them. Senior people could fulfil this need for professional coaching. On the other hand, senior people may need additional training in order to update their knowledge and enhance their professional skills. Meetings with young workers who are willing to share their “fresh” knowledge and experiences with senior people can create new bases on which both young and senior people could rely on. Third, social entrepreneurs can develop and expand professional networks for senior people. Indeed, in my opinion, Western countries are highly focused on young generations as it comes to work. This could partly be explained by the idea that young people are the future of our modern societies. Therefore, it appears crucial for Western countries to make sure that young generations are well-integrated to educational systems, and then professional life. Even though the current global crisis does not strongly support this idea, it is easily to realize it by some undoubted aspects. One of these aspects is networking. Nowadays, our global economic system strongly rely on networking -academic networks, social networks, professional networks, and so on. One may point out that there are a lot of professional networks dedicated to young professionals, young leaders, young managers, young entrepreneurs, etc. It is obvious that networks for senior professionals do exist, but as far as I know, I believe that they are not so widely developed and not as numerous as those of young workers. Does this mean that there is no such a need for networking within the senior population? Perhaps, it is simply because while getting older, people do not take so much time to expand their networks and create as many new contacts as young people do. It may be normal in a way, as you may have to take care of your family, bring up your children, keep in touch with your closest friends and spend time for yourself. Therefore, priorities change at some point in people’s life. This does not necessarily contribute to expand 3
Rethinking of Corporate Social Responsibility (CSR) and Social Entrepreneurship
Annabelle Libeau
Word count : 1992/PIN : 10588 Subtopic 1
- Going Beyond The Grey Hair -
30/03/2009
network, but to tighten it. On the contrary, young people are more flexible in their daily life, ready to move quickly from a place to another, happy to meet as many new young people as they can. They are definitively far more in a phase of actively expanding their networks rather than more or less passively keeping their own networks up to date. Social entrepreneurs could implement training programmes specifically dedicated to senior leaders or senior managers in this or that professional field for instance. They may also organize business-oriented meetings where senior workers and retirees could meet, gain new knowledge and do networking. * * * Today’s global economic crisis has strongly questioned the way financial institutions in our global world have done business so far. Financial institutions are more than ever at the heart of the developed economies as well as the economies in transition. Therefore, it is now interesting to emphasize on them and consider how they could stay major both economic and social actors of the global economy differently. Over the last few decades, an increasingly number of booming market-based economies like Bangladesh, India or Poland have asked for small and even micro financing. This new need for micro credits has pushed banks to allocate loans to micro entrepreneurs with atypical profiles. In all over the world, microfinance is probably the most demanding social financial service that most people need in the current global economy. Microfinance brings together two essential elements of any production process, capital and trust. This gives to microfinance the capacity to make the world economy balance right and ensure thousands million people to escape poverty, because microfinance intends to reach not only a financial return, but also a social return. For example, the report “The State of Microfinance in Central and Eastern Europe and the New Independent States produced� by Forster S., Greene S. and Pytkowska J., 2003, relates that after the collapse of the Soviet Union large state-owned companies dominated CEE economies. Workers on the dole try to start activities and generate their own revenues in order to survive. Demand for credit soared and since then, microfinance has expanded all over CEE thanks to international both financial and technical support. Nevertheless, most of the time financial institutions only provide micro-credits, that is to say the financial aspect of microfinance. They do not provide social help to microentrepreneurs to support their projects as microfinance advocates for, that is to say a part of the social aspect that microfinance encompasses. This is precisely in this aspect where senior bankers may find new sense to their professional contribution within the bank they work for. Indeed, as highly skilled professionals, senior bankers could coach one or two micro-entrepreneurs that have received financial support from the bank. This could be not only a fruitful social adventure for both senior bankers and micro-entrepreneurs, but also it could decrease the default risk of the project. Thus, by socially contributed to microprojects financial institutions agree on investing in, they intend to reach both financial and social returns in a potential win-win approach that entirely benefits the civil society. * * *
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Global Initiatives Symposium in Taiwan 2009
Word count : 1992/PIN : 10588 Subtopic 1
- Going Beyond The Grey Hair -
30/03/2009
To conclude, rethinking of CSR and social entrepreneurship in our global in-crisis economy probably means for firms to review their way of doing business. Perhaps should large companies get inspired by social entrepreneurs, who could become strong agents of change. Working on the improvement of existing human resources to tackle demographic challenges is not enough. Western financial institutions should better consider innovative solutions that explore both economic and social considerations, especially through microfinance.
Bibliography:
1. European Commission (2004-2007) “The Lisbon Agenda�, in Eurobarometer Special Surveys, Web link: http://ec.europa.eu/public_opinion/archives/eb_special_en.htm#273 2. UNEP Finance Initiative - The Central and Eastern European Task Force (2004) Finance and Sustainability in Central and Eastern Europe, Web link: http://www.unepfi.org/fileadmin/documents/ceetf_finance_sustainability_2004.pdf 3. FORGE Group (2000) Guidelines on Environmental Management and Reporting for the Financial Services Sector, Web link: http://www.abi.org.uk/forge/ForgeText.htm 4. Ashoka, Web link: http://www.ashoka.org 5. Forster S., Greene S., Pytkowska J. (2003) The State of Microfinance in Central and Eastern Europe and the New Independent States, CGAP Regional Reviews, Web link: http://www.mfc.org.pl/doc/Publication/Mapping/Mapping.pdf
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Rethinking of Corporate Social Responsibility (CSR) and Social Entrepreneurship
Annabelle Libeau
Global Initiatives Symposium in Taiwan 2009