Mental health and emotional well-being were consistent themes throughout Lockton’s 2023 Global Benefits Forum hosted in San Diego. We kicked off Day 1 with a terrific keynote speaker, Eric Potterat, Ph.D., who addressed us on “Learned Excellence: The Key Performance Optimization Factors of High Performing Individuals and Teams”.  The key traits he presented (Grit, Mindset, Adversity Tolerance and Balance / Recovery) will help me.

Eric knows a thing or 2 about high performance having spent his career helping elite organizations—from the Navy SEALS to the World Series Champion Los Angeles Dodgers—develop the personal traits that drive elite performance.

Eric has also worked with hundreds of business executives, NASA, firefighting organizations, and world-class athletes from every sport, including gold medalist Nathan Chen and the U.S. Women’s Soccer team.

He began by asking us, “What is mental toughness?” It seems like a simple question—until we try to define it. He explained that even though we all know mental toughness when we see it (pictures of super achievers and heroes like Sully Sullenberger flashed on the screen), we can’t always explain what it is. Pressed to define it, most of us will describe mental toughness as poise under pressure, stress tolerance, or the ability to limit distractions and stay confident and composed. The reality is those are all end states. And with life now in a state of uncertainty, the question now becomes, how do we reach those end states and stay there? ​

The key traits shared by all high performers are Grit, Mindset, Adversity Tolerance, and Balance / Recovery For each trait, he explained the science and insights that make them such important differentiators and then synthesized the core of each trait with clear takeaways.

How to increase your Grit? “The foundation of becoming grittier is working outside of your comfort bubble.”  In other words, get comfortable being uncomfortable. When we identify true motivators, and determine our passions / purpose, we are orders of magnitude closer to meeting our goals. Key attributes include the ability to delay gratification as well as see setbacks as opportunities.
​
What does having a growth Mindset really look like? “The hallmark of elite performers is a thirst for useful feedback.” Carl Dweck defined for the world a Growth vs. Fixed Mindset. Folks with Growth Mindsets see challenges vs. threats and obstacles / setbacks as a chance to learn, stretch and grow. ​

​There is promising work and research being done regarding resilience accelerators including drinking tart cherry juice to promote deeper sleep and brain neuroplasticity, float / sensory deprivation tanks, metadata and physiology / surveillance apps and “forest bathing” i.e., go for a walk in nature.
Eric’s work is proprietary and he’s finishing an upcoming book covering the core aspects of elite performance and it is expected in early 2024. I can't wait to read it.

Back in Hanover on a textbook winter afternoon - flurries mixed with sleet and a balmy 27 degrees. I was back in town as I lead Lockton's a sponsorship of the 2023 Tuck Center for Private Equity & Venture Capital Conference. And in keeping with my 2023 well-being routine, I headed across the Green for a loop around Occum Pond, up Webster Ave, stopped by Phi Delt and back to The Inn.
 
Here's my thoughts on the Conference with more details on the speakers, sessions and content below.

1. Uncertainty driven by war, geopolitical shifts, energy insecurity, inflation, interest rate hikes, recession (you know the rest) is causing a stockpile of cash (estimated $1T), increased due diligence, focus on investment fundamentals and a marked shift to secondaries (up to 50% of all deals in 2022)
2. Glimmers of optimism are shining based on economic cycles, a return to growth and the development, adoption, acceleration and integration of technologies (particularly AI, ChatGPT / Machine Learning)
3. Focus on people. Companies wanting to grow need to retain and develop their people as well as attract new talent. Again, hope rests in technology as one consultant put it “to keep up with the rocket ship pace of PE”

​ 
Thursday evening, we had cocktails, conversations and dinner at the Hanover Inn. Dune Thorne D’98 enthusiastically spoke about today’s PE environment and go forward issues.  She sees uncertainty (the main through theme for the event) as well as opportunities, is focused on DEI / ESG and states that returns from private investments are 6-8x higher than public returns. 
​
Friday morning, another lap around Occum (half walking / half skidding) was in store through the mystic morning Hanover fog. 

Jim Davidson kicked off the broader conference with his stories of how Silver Lake started and early wins even if the LPs weren’t immediately convinced (spoiler alert – they ended up very happy)
​His observations covered

• The PE model - raise $, acquire assets, optimize / build, get liquid (rinse and repeat)
• There’s a distinction between the transaction and supporting the business ongoing
• Scaled tech business still need to run like a business (not as a start-up) - optimize ROE, build recurring revenue
• See the world differently and always look for a better way (plus a great coat rack analogy)
• Silver Lake culture means no names on the front door. There’s a difference between being a partner vs an employee
• Be all in. You can never network enough. Build your own best self. Can’t do that WFH. Be part of a team
• Tech is going through a restructuring- very libertarian and carrying more social responsibility

 
It was now time for the conference’s first panel discussion, “The Decision to Sell: Continuation Funds & Long-Term Holds
 
GP led secondary/ continuation deals went from 10% to more than half in the last few years.  The continuation market is undercapitalized - big opportunity and high velocity in secondary deals
 
Some considerations and areas of focus for secondary funds

• Quality of the partner
• Quality of the asset
• Alignment of interests in the continuation

 
Ultimately, Private Equity wants to strategically transform a business into the potential of what could be - build something special
 
Shameless plugs

• Lockton’s latest whitepaper Representations & Warranties Insurance (RWI) in Secondaries Markets
• Overview of General Partnership Liability / Investment Management Insurance 
• Lockton M&A and Private Equity Support

We then had our first of 2 unstructured panel discussions where the group asked questions of ourselves and commented on a theme – ours was Implications of ChatGPT or other AI tools for the PEVC industry
 
To say our discussion was wide ranging would be an understatement. The net – the AI genie is out of the bottle with lots of concerns over control, bias and privacy. In advance of the panel, our Tuck student moderator had asked CHATGPT for what 9 topics we should discuss. We covered all 9 in 45 minutes.
​
Lunch was good. I downed a sandwich along with 3 Tuck students from Beijing, Hong Kong and Mumbai sharing stories of our backgrounds, ideas and times at Dartmouth / Tuck. I relayed my tale of delivering kegs through a raging Nor’Easter in Stinson’s F150.
 
My second break out panel was “Role of Consulting Firms for VCPE Firms and Portfolio Companies”
 
Lots of dry powder in the market - $1trillion estimate

• #1 issue for consulting firms is to recruit, retain and develop talent. Gaps in hiring or slowing of client work make it harder to recover and grow over

• #2 issue is to harness tech (invest in AI) to keep up with the rocket ship pace

 
I had to leave midway through the final panel “Investment Opportunities in Technology” but I was leaving the room, a panelist said twice “In Private Equity, the goal is to get rich slowly” (echoes of build something special)
 
Walking back up Tuck Drive to The Inn, the clouds started to part and we were in for a glorious Hanover sunset. A sign perhaps? Only time will tell.
 
Always energizing to be back in Hanover, meet new people (in-person) and see some familiar faces. I look forward to the 2024 conference.

All multinational companies face complex challenges to ensure that employees are protected, have access to care, and understand how to access and optimally use their employee benefits
 
Lockton's global benefits team in London created this document that includes the basics through current trends, usage statistics and strategies.
 
Inside you will find...

• Benefits Types by Prevalence
• Funding Options
• Internal & External Stakeholders
• Globally Mobile Employees
• Governance Examples
• New Country Entrance Strategies
• Reporting & Analytics Technology

​Click the image below for access to the presentation 

We are excited to welcome you to join us at our 2023 Global Benefits Forum hosted by Lockton People Solutions in San Diego, California on April 17 - 19!

This event is recognized as an experience unparalleled in the industry, bringing together Human Resources (HR) professionals from around the globe to network, share, and learn from fellow industry experts.

Click here to learn more and register
​

We'll hear from global experts (not Ron Burgundy...)

The Internal Revenue Service (IRS) and the U.S. Department of Labor (DOL), the two federal agencies with primary jurisdiction over COBRA issues, have not issued any meaningful guidance on how COBRA applies to expatriates, inpatriates and third-country nationals (TCNs) on U.S. and foreign health plans. The scant guidance leaves many questions unanswered that we address in our whitepaper.

As the conflict involving Ukraine, Russia and Belarus progresses, a number of questions regarding its insurance, risk, regulatory, socioeconomic and geopolitical implications continue to arise for our clients. Lockton is closely monitoring this evolving situation and engaging with our business leaders globally to ensure we are providing clients with the best advice and guidance.

Here are the top issues in today's alert 

New law bars Russian insurers from transacting with insurers, reinsurers and brokers of or controlled by "unfriendly states".  US fits that category.
Broad sanctions against Russia complicate most insurance transactions (paying premiums, claims, binding coverage, etc.).  
Impact to organizations with operations in Ukraine and Russia (wheat, energy, minerals, etc.)
Currency devaluation effect on global insurance programs
Lockton's affiliations in Russia (Lockton does not do business with the Russian government or affiliated entities. Lockton does not and has never had a shared or owned interest in any broker intermediary in Russia.)

Not legal advice: Nothing in this alert should be construed as legal advice.  We recommend consultation with your own legal advisors and local / global rokers.

Many employers are concerned about by the situation in Ukraine as they strive to ensure the safety, health, welfare and well-being of employees in the region.  Global benefit professionals are facing several volatile issues related to the unfolding Russia-Ukraine conflict.

To support our HR colleagues, we are providing the information below concerning key considerations along with the attached Ukraine Client Alert.

Employee Well-being

• Supporting employees and dependents based in Ukraine is a top priority.  Many people have left the country as refugees while others have remained. Employers may want assist with basic needs including food, clothing, transportation, communications, healthcare, housing, cash, and legal assistance regarding immigration matters. Existing market providers like local brokers, employee assistance programs (EAPs), mobility vendors, law firms, payroll providers, and insurers in Ukraine and neighboring countries may be able to offer a broad range of support.
• Mental health related concerns are seeing an increased demand throughout Eastern Europe.  One choice is Workplace Options (WPO) that is offering enhanced EAP services for therapy (24/7) and can be set up within 3-5 days. 

Business Environment

• Disruptions to insurance and services are increasing in the impacted region will need to be closely monitored and managed
• The crisis has created problems related to issues such as health and risk protection coverage, pension fund investments, and a range of mobility concerns. Lockton recommends a coordinated approach across HR, risk, operations and legal/compliance teams to be a critical effective response.
• Sanctions are complex, far-reaching, and evolving. Benefit managers responsible for employee benefit insurance policies in Russia are advised to discuss the status of provider relationships, open/upcoming policies, and placements with their local broker, global advisors and legal teams. Some insurers are owned or controlled by financial institutions that are subject to sanctions.
• Some companies are exploring moving Ukrainian and Russian staff to other locations in Eastern Europe.   Given the broader payroll, tax, and benefit impacts we are recommending that clients considering this action seek legal and accounting advice prior to making a commitment.
• The global insurance market is evolving with respect to Russian operations.  For instance, Generali announced that they are pulling out of the Russian market and winding down their Europ Assistance business in Russia.

Payroll Concerns

• Ukrainian companies are continuing to process payroll as usual.
• Making payroll in Russia is becoming increasingly difficult due to Office of Foreign Assets Control (OFAC) and international bank sanctions.  Companies are not able to make deposits into or payments from impacted banks.  We are recommending that HR leaders speak with their payroll and accounting teams to understand the risk and how to address the employee impact (inability to pay rent, mortgages, or other expenses).  The general solution at this time is encouraging employees to change their banking institutions to a non-sanctioned bank.

Sanctions Impact on Employee Benefits

• Sanctions are complex, far-reaching, and evolving. Benefit managers responsible for employee benefit insurance policies in Russia are advised to discuss the status of provider relationships, open/upcoming policies, exclusions and placements with their local broker, global advisors and legal teams. 
• There are number of Russian carriers on the OFAC and Specially Designated Nationals (SDNs).  We recommend that companies vet their carriers through internal legal/compliance teams. Where the carrier is sanctioned, we are advising clients to seek internal legal guidance and to move the plan at their earliest opportunity.
• Lockton expects that OFAC will continue to designate additional individuals and entities as SDNs which will further curtail available insurance cover for risks in the region.  We are advising all HR leaders to continue to review their carriers in the event additional carriers should become sanctioned. 
• Premium payments cannot be made into or out of sanctioned banks.  We are reviewing the implications and how this will impact the policies, additional guidance will be forthcoming.  In the meantime, we are recommending HR leaders seek guidance from their local broker and internal legal team. 
• From a benefit standpoint, we understand that local policy claims are still being made to local Russian nationals. 
• Many insurance policies contain an act of war provision that triggers whether the act of war is declared or undeclared.  It is important to review their policies for this provision and discuss the implications with their local broker.
• In Russia, the policy may contain an exclusion due to death or injury while attending a protest. It is important to internally discuss how this issue would be addressed should an event arise.  Some companies are considering self-insuring this risk.
• Employees in Russia/Ukraine will not be covered under a BTA policy for evacuation as such activity may be deemed a transfer of the usual place of work by the carrier.  Any company thinking of removing employees from Russia [Russian national employees] should be making arrangements now. Also, BTA policies may or may not provide coverage after relocation.  This is an extremely hot topic among carriers.

 What’s next?

• Employers have recent experience in crisis management processes as a result of the COVID-19 pandemic and we recommend leveraging these lessons learned.
• Employers should start to plan such arrangements for their Ukrainian and other employees who are now working remotely away from their home country.  Employees will be seeking permanent or temporary employment in a new country.

• In order to avoid an abrupt loss of healthcare and other benefits, employers closing or suspending operations in Russia will need to consider how they can help their local employees. We are anticipating that this trend will increase over the coming days and weeks.  In other cases, the business may be maintaining their legal status, but conducting layoffs.  Given the employee impact we are recommending that HR leaders speak with internal stakeholders to understand their company’s plans.
• For workforces in Ukraine, Russia, and other affected countries, a range of social security issues will ultimately need to be considered and addressed. General employee health and well-being will require a proactive approach.
• Given the limited supply of clinicians in Eastern Europe, demand for healthcare will be high with constrained supply.  In addition, according to Our World in Data, only 35% of the Ukrainian population fully vaccinated for COVID-19, pandemic challenges, among other public health challenges, are likely to be aggravated.

As a result of this conflict, needs will emerge in the coming days, months, and perhaps even years. Ongoing monitoring, continued planning and collaboration across the enterprise will be critical to providing the support employees need now and in the future.  Lockton will continue to monitor and update these situations as they develop.

Not legal advice: Nothing in this alert should be construed as legal advice.

Details of the employer requirements under the Emergency Temporary Standard (ETS) are spelled out on Lockton’s ETS Compliance Alert including a registration link for a webcast on Wednesday, November 10th from 2-3 CST.

In summary, ETS announced today by OSHA requires that employers with 100 or more employees must develop, implement and enforce a mandatory COVID-19 vaccination policy OR adopt a policy to ensure that their workers are fully vaccinated or tested at least weekly.
Steps such as policy establishment, employee vaccination status, communication and records retention have a deadline of December 5, 2021 with weekly testing commences no later than January 4, 2022. ​

Employers have been asking Lockton for a vaccine communication resource.  Here is a COVID-19 Vaccine Communication Resource an overview about vaccine safety, efficacy, how the vaccine works, and commonly asked questions to help navigate information available.

Employers can take many steps to prepare. The experts at Lockton Companies have put together an Employer Checklist for COVID-19 Vaccines of items and issues to consider as employers determine the best course of action for their workforce.

The Checklist Addresses:

• Covering the cost of vaccine
• Developing a vaccine policy
• Developing a communication plan
• Navigating where your workforce can get a vaccine