Essay Example: The Ever-Changing Financial Landscape and Job Security

Money, financial services, and banking have been around us for centuries, and their function has become increasingly dynamic and complex. The financial services sector continues to undergo tremendous changes influenced by the development of new technologies, legislative regulations, challenges, and other opportunities. Also, evolving customer demands and loss of customer confidence is other factors that may lead to a change in the financial landscape and, consequently, job security. Job insecurity is a term used to refer to perceived uncertainty in the continuity of an employee’s employment. Greenhalgh & Rosenblatt, (p.438) also defined job insecurity as the perceived powerlessness to maintain a desired job in a threatened job situation. In today's globalized world, rapidly growing markets, changing customers' needs, economic pressures, and technological advancements place employees in a challenging work environment. Such working environments are characterized by unstable work demands, role confusion, and increasing job insecurity. Job insecurity remains a continuing threat for employees who are replaced by robots and automated machines. The ever-changing financial landscape and job security have a great effect on 401K, 403B, IRA, and annuity planning with legacy protection.

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Although job insecurity outcomes are well understood, less is known of how to predict job insecurity. Moreover, job insecurity has a profound negative effect on the workers' job satisfaction, involvement, commitment, turnover intentions, trust, and health (Lee, Huang, and Ashford). Due to the numerous threats, challenges, and changes facing many organizations today, workers are becoming increasingly vulnerable to job loss. Maintaining the continuity of one's job is essential for employees’ success and career advancement. Job insecurity acts as a work stressor and affects psychological health as well as physical health. Besides, insecurity among employees has been linked to anxiety, low self-esteem, helplessness, and depression. Research indicates that workers in flexible employments experiences increased job insecurity and, consequently, low economic status, which affects their well-being.

The financial services landscape is undergoing a shift, especially the type of players involved, how money is availed, and used. Finally, the role played by finance concerning the natural environment. This business environment is increasingly being driven by changes in business models, technology, and global environmental protection initiatives. Understanding the evolving financial landscape is essential for investors to know the levels and trends of access to financial services and to know the driver of the changes and innovations in the industry.

Economists acknowledge that finance is vital for development and in a great way than had been recognized before. Besides, changes witnessed in the finance sector are providing enormous possibilities for economic development. The financial development framework is a two way, continuous and dynamic system that is interacting and has driving forces that jointly modify and shape the financial landscape. These forces are, however, influenced by the effects of these changes. The four financial services altered by the forces at play are institutionalization, disintermediation, globalization, and modernization. For example, entry of new players in finance, the arrival of digital banking, and greening of finance bring new opportunities and challenges for both new players and incumbents. However, in an ever-changing financial landscape, the purpose of finance remains constantly significant in serving the needs of the customers and the society at large, thus enabling people to improve their lives.

Effects of Changing Financial Landscape on Investment

Many financial service firms have announced large, ambitious budgets for the digital transformation program. However, the expectations are unclear, and only 25% of investors are confident that digital transformation strategies will be effective (Oliver, p.9). Many financial services firms are struggling to explain to the shareholders as there is very little evidence of investment improving profitability. Only a few investors are confident that changing the financial landscape, especially digital transformation strategies, will be effective (Oliver, p.9). Most investors feel that they don't understand what firms are investing in and why- may it be for growth, operation efficiency, or resilience.

Besides, changing financial landscape, especially digital advancements, will greatly change the way financial services are transacted and alter the fee structures related to the various services offered. In the future, these changes will seem like a lot of progress, especially when associated with infrastructure and reducing the cost of rendering services. While new technologies enable investors to become more engaged in their daily performance, technologies impact customer behavior. Most customers are shifting interest in premium products.

Investors in the world are increasingly eying for positive changes in the financial and economic systems (Amit, p. 8). Large corporations are facing pressure to act responsibly towards multiple set of consumer demands and stakeholders to increase transparency in business practices. The scale of social and environmental challenges with global uncertainty widespread inequality and significant pressure is also expected to heighten in the future. Also, there is evidence showing that investors and other financial professionals can lead efforts to confront critical issues in local and global communities that are affecting future investments and job security. With significant evidence of breakthrough, investors’ interest has rapidly expanded catalyzed in large part by strategic and intentional field-building efforts. Investing pioneers have to make investments intended to have a positive impact and demonstrate that a positive impact can be achieved. Perhaps this is the rare turning points in history when dangerous challenges and limitless opportunities cry out for clear, long-term thinking.

For future investors to succeed in their course, it is vital to understand the three impacts growth has on investing. First, investors have to demonstrate a desire to align their investments with their values. The alignment will come about because norms change around the roles of businesses in the society, and investors want to hold businesses accountable for the broader impact on the environment in which they operate. Secondly, investors must display a growing understanding that considering social and environmental impact is simply good business (Amit, p. 17). Finally, the investors should align their desires with the global frameworks for climate change, which have explicitly called for private capital to finance solutions to social and environmental challenges.

On the other hand, the tectonic shift in the global agreed climate goals that have seen a systemic transition across the regions and national economies. For example, investments in fossil fuels which are against the Paris agreement is expected to drop as witnessed since 2015 (Barbara B. et al.). Furthermore, most investments that lead to high carbon emissions and lead to potentially stranded assets such as fossil power generation and supply infrastructure will be phased out shortly. As such, future investments in some firms are expected to drop drastically, especially in firms that don't factor in climate risks and avoid aggravating ecosystems' vulnerability to climate change. A

Effects of Changing Job Security on Future Investment

Job security is a key concern for all employees and one that encourages job seeking. The feeling of job insecurity stems from many causes and is not always related to whether the job is insecure. Organizations need to be aware of job security during the good and bad times as the feeling of job insecurity can be personal rather than the external economic conditions. Job satisfaction is growing as a subject of economic research as it has been linked to important labor market outcomes such as turnover, worker training, and absenteeism.

Research indicates job security, investment expenditures, wage bills, and at-will employment has long been the center of the debate over how employees should be treated and how much freedom organizations should have in firing their employees. Most countries have passed laws such as civil rights and Discrimination Acts, all of which are aimed at protecting workers against discriminatory firing. These laws are undoubtedly beneficial in protecting employees not covered by federal laws from unfair dismissal practice.

Insulating workers from unfair termination and the fear of being fired may allow them to focus on their responsibilities, take innovative risks, and build skills that improve their performance (Bai). These increased performances may increase productivity and more attractive opportunities leading to an increase in investment. On the other hand, the regulation that makes it harder for firms to fire workers reduces operating flexibility and makes it costlier to divest or scale back poorly performing employees. Making it harder to cut investments reduces the expected terminal cash flow of projects resulting in fewer projects with positive Net Present Value (NPV) and hence reduced business investment. A reduction in operating flexibility could also constrain investment by making it harder for a firm to raise external capital, such as debts.

Besides, business investment decisions are constantly changing as a consequence of the changes in the financial landscape and job security. It is unlawful for an employer to terminate an employee's services based on malice, retaliation, and bad faith. For example, if an employer fires a worker just before pension vests, the employee is entitled to sue the said employee. The employee can also recover the lost earnings and damages when he was away from work due to unfair firing by the employer.

The study of the investment rates in the United States shows a decrease of investment as percentage assets from 8.3% to 7.8% in one year before and after the adoption of the good faith laws, respectively (Bai). This decrease corresponds to approximately $6 million in investment for an average firm. Accompanying the decrease in investment was a 3.1% decrease in annual sales (Bai). Besides, greater employment protection discourages investment by making it harder for firms to secure external capital and making investments less profitable. Although there is increased job security, research has indicated a decrease in firm investments, and it has positive effects on individuals, families, and communities as it brings about economic stability.

The rise of workplace automation has vastly improved productivity and consequently reduced the work of human employees. Automation can help remove the burden of repetitive administrative work and enable the employees to focus on more complex tasks while reducing the risk of errors. Below is a projection of how machines will have replaced human labor in companies by the year 2022, which directly affects firms' investment.