B

TEAM AVB

Risk Intelligence Challenge Trophy 2013

Question 1:
Generation Ys in Singapore increasingly value globe-trotting over the norm of a degree/diploma and starting a career. Good or bad move?

CONTENTS
INTRODUCTION OBJECTIVES RISK APPETITE COST-BENEFIT ANALYSIS 2 3 5 7

OPPORTUNITY & RISK ASSESSMENT 17 FINAL RECOMMENDATION 20

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1. INTRODUCTION

They are entitled, love instant gratification and lament when work gets dull and boring. The following characteristics are those of Generation Y, also known as the Millennial Generation. In this report, they form the target segment of our research. In determining the scope and focus of our report, we have made several assumptions:
1) Age

Firstly, given there is no fixed age range of the Generation Y, we have defined Generation Y as individuals below the age of 22. Hence, their education status would be pre-university. It is important to note that we are focusing on Generation Ys in Singapore.
2) Either-or decision

In addition, we assumed that Generation Ys who have chosen globe-trotting do not pursue a tertiary education at all. The options of globe-trotting or pursuing a degree and career are thus mutually exclusive.
3) Globe-trotting

Our definition of globe-trotting is travelling for an extended period of time, usually more than a year. This excludes occasional short trips people take to get away from the hustle and bustle of the hectic city life. This report intends to assess the riskiness of globe-trotting by Generation Ys through careful analysis of the risk management framework. Firstly, we intend to define personal objectives of the Generation Ys while stating any reasonable assumptions as previously mentioned. Next, we will define the risk appetite of the Generation Ys, followed by a cost-benefit analysis of both globe-trotting and starting a career. We will also provide the mitigation factors for the risks associated with each decision. Finally, we will attempt to reconcile the risks for each alternative with the risk appetite of the Generation Y and propose the optimal solution to maximise benefits while staying within their risk appetites.

2. OBJECTIVES
In order to assess whether globe-trotting instead of getting a degree and starting a career is a good or bad decision, we need to first determine the objectives of Generation Ys. By breaking down the objectives of our target group, we can then evaluate whether globe-trotting helps them achieve or detracts them from life objectives. 2.1 Maslows Hierarchy of Needs Maslows theory states that there are 5 basic human needs: Physiological needs, safety needs, love and belonging (social needs), esteem needs and lastly, the need of self-actualization. These needs have to be satisfied and fulfilled in a progressive manner, suggesting that needs on the lower levels have to be fulfilled before seeking higher needs. Physiological needs belong on the lowest level while Self-Actualization is at the highest level. Generation Ys who remain on the fourth level of the Maslows Hierarchy of Needs are not pursuing self-actualization. They are more focused on climbing the social status ladder, accumulating achievements and attaining respect from peers. Their current objective is to achieve a higher level of self-esteem through an illustrious and often high-paying career. Satisfying esteem needs are thus a relevant objective of Gen Ys in Singapore. 2.2.2 Self-Actualization Self-actualization is defined as the desire for selffulfillment, namely the tendency for the individual to realize his potential. In identifying self-actualization, we will consider a total of 3 characteristics: Spontaneity, continued freshness
Figure 2.1: Maslows Hierarchy of Needs

love and belonging desires, such as the need for love, friendship and intimacy. 2.2 Objectives of Generation Ys 2.2.1 Esteem Needs Esteem needs are defined as the desire to be accepted and valued by others. This involves gaining recognition and respect through occupations and hobbies.

of appreciation and lastly, increased autonomy. In a study done by the CIA (Central Intelligence Agency), Singapore is ranked 6th in the world in terms of GDP per capita on a purchasing power parity basis1. It is important to note that our GDP per capita of US$60,900 is higher than those of

Physiological needs are dened as the basic human requirements for human survival, which include food and clothing. Safety needs comprise safety and security, such as health and well-being of an individual. Moving on, social needs relate to

1 Retrieved from: https://www.cia.gov/library/publications/the-world-factbook/rankorder/2004rank.html

many other developed nations such as Hong Kong, United States and Switzerland.

holistically as a person and lead a more fulfilling and meaningful life. For most, travelling the world is deemed as one of the most important things to accomplish in their lifetimes. Noting that self-actualization describes the desire to accomplish everything that one can, it can be assumed that travelling falls into this category. Globe-trotting is therefore an ultimate objective of those who have achieved the previous 4 levels in the hierarchy of needs.

Figure 2.2: Top 10 countries in terms of GDP per Capita

Additionally, Singapore is ranked 25th on the Quality of Living Survey done by Mercer in 2012 and tops the rankings for the city with the best infrastructure, which significantly impacts the standards of living in a country 2. The high quality of life and GDP per capita of Singapore thus suggest that most local Generation Ys live in a relatively sheltered household where they do not have to worry about inadequate living arrangements. Applying this theory to Generation Y, the first 3 levels (physiological, safety, social) are thus achieved. Furthermore, this leads to a certain sense of entitlement, which in turn reduces the desire to fulfill esteem needs. As a result, we have assumed that most Generation Ys would be seeking to fulfill Maslows last level of needs, self-actualization. People travel to take in sights, experience life in a novel manner, step out of their comfort zones and perceive things in a new light. They hope to grow

On the contrary, humans can satisfy selfactualization through their career as well. Having a career and being passionate about it allows them to satisfy another component of self-actualization: Realizing ones full potential. Unfortunately, this form of self-actualization is delayed as entry level jobs often entail repetitive and menial duties in earlier years of a career. Coupled with their desire for instant gratification, Generation Ys naturally gravitate towards globe-trotting as an avenue for self-actualization. 2.2.3 Comparative Standing After our application of the relevant motivation theory, we can conclude that one of the objectives of Gen Ys include globe-trotting as part of selfactualization. As self-actualization is on a higher level than esteem needs in Maslows hierarchy of needs, it is reasonable to say that globe-trotting, as a pursuit of self-actualization, takes higher precedence over pursuing a career, which represents the search for esteem needs.

2 Retrieved from: www.mercer.com/press-releases/quality-of-living-report-2012

3. RISK APPETITE
3.1 Scoring System Individuals have varying risk appetites. Generally, the goal is to achieve the objective of the individual while staying within the risk appetite of his or her choosing. For this report, we have decided to classify the risk appetite of the Generation Ys into 3 groups based on 2 criteria: Financial concerns and personal development. Financial concerns include nancial security while personal development consists of selfactualization and other aspects such as development of critical thinking and analytical skills.

Figure 3.1: Proposed Probability-Impact Matrix

In order to create a basis of comparison for opportunities and risks attached to globe-trotting and pursuing a degree/career, we will be utilizing a Probability-Impact Matrix, as listed above. Probabilities of opportunity and risk comprise of Unlikely, Moderate and Likely, encompassing values from 1 to 3 respectively. Similarly, the impact of an opportunity or risk is classied into Minor, Moderate and Major categories with the same range of values. Multiplication of probability and impact of an opportunity and risk thus gives us a resultant score, ranging from a minimum of 1 to a maximum of 9. Considering the above scoring approach, our range of risk appetite will be determined by the maximum number of risks for both options (Globe-trotting and choosing a degree/career). Having identied 4 risks of globe-trotting, as compared to 2 risks of the degree and career route, we have thus determined a risk appetite scale ranging from 1 to 36, given that each risk identied has a potential score of 9.

RISK APPETITE
Category Minimum Score Maximum Score Small 1 12 Moderate 1 24 Large 1 36

Figure 3.2: Categories & Ranges of Risk Appetite

3.2 Small Risk Appetite We will be considering 3 categories of risk appetite of Generation Ys in Singapore. The rst segment of Generation Ys is the most risk-averse, having the smallest risk appetite among all 3 groups. They are extremely concerned with nancial stability and are less concerned with self-actualization. These are the people who are on the fourth level of the Maslows Hierarchy of Needs, being more preoccupied with pursuing a career and scaling the corporate ladder. As such, we have assigned this group with a risk appetite range of 1 to 12.

3.3 Moderate Risk Appetite The second segment of Generation Ys is identied as being less cautious than the previous segment and adopts a prudent approach to this dilemma. They are equally concerned about nancial security as well as personal development. As they have a smaller risk appetite, they might be reluctant to risk their careers for globe-trotting. Their ultimate aim is to achieve both goals while staying within their respective risk appetite. Consequently, globe-trotting may be deemed as a risky venture while pursuing a career will enable them to obtain nancial security and stable living arrangements. For this group of Generation Ys, their risk appetite values range from 1 to 24.

3.4 Large Risk Appetite The last identied segment has the largest risk appetite with an inclination towards personal development. Generation Ys with big risk appetites will be able to take on larger risks given their high risk tolerance. They are likely to choose globe-trotting while remaining optimistic about pursuing a career of their choice after their travels. Hence, they could be said to be more willing to risk not having a career headstart by travelling when young instead of the conventional route of getting a tertiary education and embarking on their career immediately after graduation. For this risk appetite category, we have established a risk appetite scale of 1 to 36.
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4. COST-BENEFIT ANALYSIS
In evaluating both scenarios pertaining to globetrotting and pursuing a degree/career, a costbenefit analysis will be applied in identifying potential opportunities and risks Generation Ys in Singapore are exposed to. understanding and embracing a foreign culture will be a natural progression. Individuals will start to embrace cultural diversities present and eventually develop a keen appreciation for them. This is analogous to S.O. Lesser and H.W.S. Peters Stage Theory of Culture Shock, a three4.1 Globe-Trotting stage process of culture shock includes rst, a spectator phase on arrival; second, an involvement phase when the person can no longer stand outside the host culture and must become involved; and third, a coming-to-terms phase where the visitor learns how to cope in the host culture 4.

Opportunities:
4.1.1 Gaining a Global Perspective Globe-trotting entails extensive travelling to different countries and spending considerable time in each destination. As such, it is highly probable that a globe-trotting individual would be exposed to a myriad of cultures from the places visited. One of the top few reasons cited for travelling is to experience a different culture. For example, one in eight German travelers stated that the opportunity to experience Aboriginal culture inuenced their decision to visit Australia3 . Therefore, it is reasonable to assume part of a globe-trotters agenda is to experience different cultures of different places. Exposure to foreign cultures may initially breed a certain degree of culture shock but as the extent of exposure increases, the transition to

This transition is aided by several factors, namely sense of place and a host destinations local cultural expressions. Sense of place refers to the feelings evoked in people as a result of experiences and memories associated with a place5 . Living in a foreign community for a prolonged period grants one a temporary insider

3 Retrieved from: http://culturaldata.gov.au/publications/statistics_working_group/cultural_tourism/cultural_tourism_statistics 4 Retrieved from: http://books.google.com.sg/books?hl=en&lr=&id=zszx6k5Y1HMC&oi=fnd&pg=PR5&dq=top+reasons+for+travelling+the+world

+experienc+culture&ots=XL52yEMMBs&sig=W3FCEHueCoZoOn1pZMjRazdDYK8#
5 Retrieved from: http://project2225.wikispaces.com/le/view/Place+and+identity+-+a+sense+of+place.PDF

status whereby the globe-trotter learns to abide by a communitys behavioral codes and thus conceive shared memories. By developing a sense of place, the globe-trotter overcomes the initial stage of culture shock and enters the second, involvement stage and third, comingto-terms stage. He learns the ropes of a community and its culture, acquiring a deep sense of why and how the foreign communitys outlook on issues is the way it is. Present within a foreign community are also cultural expressions, objects which express a local communitys culture and identity6 . Examples include architecture, art, texts and fashion. These objects convey the history, culture and identity of a foreign land. A globetrotter has a readily available and source will of such cultural and expressions consciously

of views, which allows one to approach any situation with a more all-rounded framework. Without extensive travelling and immersing in different cultures for a substantial time, it is impossible to develop such a worldly perspective and thus puts globe-trotters at a larger advantage compared to non-globe-trotters.

4.1.2 Self-Actualization According to Maslows Hierarchy of Needs, selfactualization serves as a motivation for globetrotting. Through globe-trotting, an individual is able to potentially become a self-actualizer with the following key dening characteristics: Spontaneity, continued freshness of appreciation and increased autonomy 7. Spontaneity is dened as extending creativity into everyday activities, being engaged and spontaneous. Being a globe-trotter presents abundant opportunities to achieve all of the above. Uncertainties are a common occurrence while travelling, from unpredictable weather to unforeseen political turmoil. Each uncertainty can be converted into an opportunity with creative problem-solving. Globe-trotting allows one to exercise such creativity and also be spontaneous in participating in different activities such as trying exotic cuisines.

subconsciously immerse himself in them. This constant cultural immersion further promotes cultural assimilation of the globetrotter. Having more profound understanding of a foreign culture also helps him to reason from that cultures point of view. Through assimilating a foreign culture and understanding it, globe-trotters will develop a more holistic perspective, incorporating the variety of cultures they have encountered. This Global Perspective encompasses the assortment of perspectives derived from an individuals cultural tutelage and contains a wide spectrum

6 Retrieved from: http://books.google.com.sg/books?hl=en&lr=&id=VBXvvo4Vo-oC&oi=fnd&pg=PR14&dq=held+et+al+transformationalist

+1999&ots=hXymUgug99&sig=OgzI-IdhpoiK5HjrZXVH8rtilZo#v=onepage&q=held%20et%20al%20transformationalist%201999&f=false
7 Coon, D, & Mitterer, J.O., An Introduction to Psychology: Gateways to Mind and Behavior (Cengage Learning, 2007), 479.

Continued freshness of appreciation will also be honed by globe-trotters in which they constantly demonstrate appreciation of lifes basic goods. Globe-trotting requires one to pack only the essentials and survive on them, through different terrains and environments. As such, it is common to see globe-trotters being easily contented with the bare essentials of life having food and shelter. The hallmark of increased autonomy is that selfactualizers tend to be resourceful and independent. Living alone in a country with limited funds and access to family and friends forces one to become increasingly independent as well as resourceful by overcoming disadvantageous situations with the available resources on hand. Over time and repeated handling of such situations, it can be expected that a globe-trotter emerges more resourceful and independent.

Factors such as spending habits, itinerary and destination come into consideration when computing the budget. Given the sizeable monetary amount required to globe-trot, it is imperative that a globe-trotter manages his nances wisely, by resisting temptations to splurge and acting on the age-old adage of saving for a rainy day, such as cases of emergencies. This careful and tedious process of budgeting inculcates a strong discipline in managing personal nances and will undoubtedly prove to be a valuable life-skill to have.

4.1.4 Discovering Passion Globe-trotting provides one an unparalleled 4.1.3 Financial Management Globe-trotting is undoubtedly expensive and more often than not, travelers have to manage their nances carefully and plan their budgets properly. An estimated cost of travelling the world for a year is USD$20,0008 . This gure is an approximation if the globe-trotter travels to Western Europe and North America amongst other destinations. This cost is however subjective and exact travel costs differ for each individual.
8 Retrieved from: http://twenty-somethingtravel.com/2012/02/cost-travel/ 9 Retrieved from: http://www.time.com/time/magazine/article/0,9171,2015783,00.html

opportunity to have substantial quiet-time to ponder and reect on ones interests and passions. According to Karl Haigler and Rae Nelson, education-policy experts and co-authors of The Gap Year Advantage, students who have taken a gap year reported feeling more focused and having a clear sense of purpose upon returning from a gap year9 . Similar to a gap year, globetrotting provides an opportunity for one to experience different cultures and a chance to work

in geographically-specic occupations. Through the aforementioned opportunities, one can increase his chances of discovering his passions and interests. In comparison, getting a degree and nding a job means much of ones exposure to activities is constrained specialization. by ones For chosen eld of example, Singapores

Risks & Mitigation:

4.1.5 Opportunity Costs A major risk involved with globe-trotting is the opportunity costs arising from spending a prolonged period of time abroad. The most substantial and damaging opportunity costs are low employability and reduced career opportunities. Without a degree or diploma, a globe-trotter misses out on the knowledge, skills and business connections his peers with a tertiary education would attain. Academic rigor offers training in not just a subject matter but also skills essential to a more professional occupation such as analytical and communication skills. Comparatively, a globe-trotter is at a competitive disadvantage compared to his peers as he lacks formal training in these areas. This lowers his employability and poses a stumbling block to his future career upon ceasing globe-trotting.

emphasis on being the regional nancial and commodities hub mean that societal expectations often steer undergraduates passion towards the nancial service. Not surprisingly, many Singaporean undergraduates preferred banking and nancial services as the rst career choice upon graduation, as indicated by the Employers of Choice Survey 2012 carried out by JobsCentral10 . Since ones passion is inuenced by societal expectations and the economic direction of a country, it is rare to see an undergraduate pursuing anything non-career or nonacademically related. Through globe-trotting, these societal

Career opportunities are also signicantly fewer due to a lack of tertiary education. Most professional entry-level jobs require at least a diploma and globe-trotters would unfortunately fall under expectations. The lack of career opportunities severely limits employment options a globe-trotter can take up. This results in signicantly lower pay in a lifetime of a globetrotter. The Department of Education's National Centre for Education Statistics (NCES) in the United States has mentioned that since the mid-1980s, education has played a large part in

expectations are temporarily relieved and one has the freedom to pursue what truly interests him and in the process, discover genuine passions. Along with a global perspective, the exposure to crossnational activities will beget exploration and reignite a curiosity in life. Therefore, globetrotting is essential to discovering ones passions in life and formulate a renewed certainty in ones life.

10 Retrieved from: http://jobscentral.com.sg/survey/eoc/download_path.php

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potential wages, with bachelors-degree holders taking home an average of 38% more than those with only a high school diploma. In 2002, the US Education Resources Information Centre projected that non-degree holders could expect a lifetime average of $1.2 million, while those with a bachelor's degree could expect to earn $2.1 million, or nearly double11. Mitigation: It can be argued that globe-trotters gain valuable life lessons which cannot be acquired without travelling. Globe-trotters attain a more acute sense of practicality as they are usually forced to be realistic about their needs and focus on surviving on a budget. In addition, they will be honing their interpersonal communication skills through constant interactions with different people. As some countries may not adopt a common language such as English, a globe-trotter has to learn to communicate effectively in a different language. With the advent and proliferation of online tertiary learning platforms such as Coursera, globe-trotters can easily engage in online learning. As a result, they may not necessarily be lacking in subject-matter knowledge and analytical skills compared to their degree-pursuing peers.

4.1.6 Financial Burden The most immediate risk of globe-trotting is the accompanying nancial burden. As discussed earlier, globe-trotting rakes up hefty expenditure and this puts tremendous nancial burden on a family. It is highly unlikely that a typical Generation Y teenager would be able to nance his or her own globe-trotting journey and thus, it is reasonable to assume that parents would be the main nanciers of the entire globe-trotting process. As previously mentioned, the cost of travelling the world could be modestly estimated to be USD$20,000, which is a substantial cost to bring upon the family. In perspective, according to the Future on Retirement survey done by HSBC, the average Singaporean has savings of S $120,000, in which most of it will be used to pay off mortgage loans for their ats12 . Spending $20,000 will hence severely diminish household savings of globe-trotters. It may also be economically unwise for a Generation Y teenager to embark on globetrotting in this current period due to the economic outlook. A study released by McKinsey Global Institute (MGI) in December 2010 has reported that interest rates in Singapore were projected to rise in the next 5 years13. This is due to a surge in global investment demand encouraged by rapid emerging market growth. In accordance to the economic theory of Intertemporal Consumption,

11 Retrieved from: http://education-portal.com/articles/How_Much_More_Do_College_Graduates_Earn_Than_Non-College_Graduates.html 12 Retrieved from: http://www.insurance.hsbc.com.sg/1/PA_ES_Content_Mgmt/content/SGHI/personal/savings/endowment/secureinc/images/

for6_singapore_report.pdf
13 Retrieved from: http://business.asiaone.com/Business/News/My%2BMoney/Story/A1Story20101210-252056.html

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specically

Milton

Friedmans

Life-Cycle

myriad of cultures is that one might lose direction and be overwhelmed by the diversity, experiencing culture fatigue 14. On an individual level, this is undesirable and tantamount to burning out while globe-trotting. Mitigation: The Internet serves as a useful tool for globetrotters to seek reassurance from family and friends. With the proliferation of internet databased calling programmes such as Skype and Viber, one simply requires an internet connection and laptop to call home and nd comfort. This would, to a certain extent, help to alleviate mental exhaustion and burning out.

Consumption Model, a rise in interest rate translates to cheaper cost of consumption in the future, making it more economically efcient to intertemporally allocate money for future consumption. In addition, higher interest rates increases interest payments of xed-deposits and thus it will be more economically efcient to allocate more money into saving accounts. Mitigation: One could work part-time while travelling in order to reduce overheads and allow oneself to be self-sustained throughout the entire travelling duration. The rise in popularity of globe-trotting and proliferation of online self-documenting platforms such as blogs and vlogs mean that more globe-trotters are increasingly documenting their experiences online and often, in great detail. This provides a channel for prospective and current globe-trotters to gather important tips on saving and earning money while travelling, guiding them on globe-trotting on a low budget.

4.1.8 Inability to Readapt 4.1.7 Instability Globe-trotting carries the inherent risk of an unstable life. With the constant packing and relocating, it can be physically and mentally exhausting. The lack of a permanent residence overseas further exacerbates this problem. The psychological and emotional effects are troubling and include feelings of displacement as well as a lack of identity. The downside of experiencing a Globe-trotting often ends with the globe-trotter returning to his or her home country. A risk then surfaces whereby globe-trotters have problems readjusting to life at home. Take Singapore for example, having being used to the autonomy one has while travelling, settling back home would usually mean nding a stable and decent paying job. Once again, societal expectations and

14 Retrieved from: http://books.google.com.sg/books?hl=en&lr=&id=zszx6k5Y1HMC&oi=fnd&pg=PR5&dq=top+reasons+for+travelling+the+world

+experienc+culture&ots=XL52yEMMBs&sig=W3FCEHueCoZoOn1pZMjRazdDYK8#

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pressures are at work and this will be stiing for the just returned globe-trotter. According to Sue Shellenbarger, a columnist at the Wall Street Journal, some students lose direction after return from their gap years15. While gap year is not the same as globe-trotting, we can certainly extrapolate the effects. Given the problems with employment discussed earlier, it may be even harder for globe-trotters to re-adapt to life back home even if they wanted to nd a decent job.

path expands ones career opportunities. Employment rates for university graduates from all 3 universities in Singapore are generally high. This is supported by the Graduate Employment Survey (GES) conducted in 2011, which found that the mean full-time permanent employment 16 rates of graduates across all faculties from NUS, NTU and SMU were 90.09%, 85.60% and 92.18% respectively 17. In comparison to 78.00%, the 2011 employment rate of the resident population aged 25 to 64 in Singapore18 , a

4.2 Degree/Career

university degree contributes substantially to ones employability in Singapore. Increasing education levels of Singapore citizens today has led to further proliferation of degree and diploma-holders. Coupled with the transition of Singapore into a global financial, IT and

Opportunities:
4.2.1 Career Opportunities On the other hand, benefits and costs of choosing a degree and a career must be considered in making a decision. Firstly, choosing the university

Figure 4.1: Employment Rates of Singapore

15 Retrieved from: http://online.wsj.com/article/SB10001424052970203513204576047723922275698.html 16 Refers to employment of at least 35 hours a week and where employment is not temporary. Includes contracts of one year or more. 17 Retrieved from: http://moe.gov.sg/education/post-secondary/les/ges-nus.pdf 18 Retrieved from: http://www.mom.gov.sg/newsroom/Pages/PressReleasesDetail.aspx?listid=398

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commodities trading hub, employers now view tertiary education as a pre-requisite when entertaining applications for professional jobs. This justifies the need and value of a university degree in Singapore today.

amount of money in the same time frame, given that the present value of salaries of graduates exceeds that of globe-trotters. Hence, from a financial point of view, graduates can be expected to benefit more than globe-trotters.

4.2.2 Money On a similar note, mean salaries of fresh graduates has been increasing steadily for the past 3 years. A survey has shown that average entrylevel monthly salaries for fresh graduates with a degree have increased from S$2540 19 in 2010 to S$2678 in 2012. Likewise, starting salaries for diploma holders have increased from S$1763 to S $186620 in the past 3 years. As this trend

4.2.3 Critical Thinking & Analytical Skills Besides monetary gains, graduates who embark on their careers will acquire critical professional skills from the workplace. One such example would be business communication skills, both verbal and written. Through exposure to the corporate climate and interaction with colleagues or clients, a graduates ability to write and speak effectively will improve immensely over time. Furthermore, analytical and research skills will result from work. This includes the ability to assess situations, seek multiple perspectives and formulate a plan of action to resolve issues. This in turn confers upon problem-solving skills applicable to multiple facets of life. Upon recognition from superiors and resulting promotions, individuals will be tasked to

continues, it is foreseeable that there would be a large disparity between graduates and globetrotters in salaries earned, given that globe-trotters are unlikely to hold down a permanent job overseas. Chances of promotion in foreign jobs held by globe-trotters are significantly reduced as well, since it is unlikely that they will hold down the same job for long enough periods of time. It can be argued that globe-trotters may settle down, either in another country or Singapore, and eventually reach this same earning power, albeit slower than graduates who started working earlier. However, taking into account the time value of money, graduates will still earn an overall larger

undertake more duties, such as managing largerscale projects and teams. In effective delegation and overseeing of duties, leadership and management skills will be called into play, thus presenting opportunities to hone such skills. At

19 Retrieved from: http://tum-asia.edu.sg/wp-content/uploads/2012/05/Singapore_Fresh_graduate_survey_press_release_2011.pdf 20 Retrieved from: http://sbr.com.sg/hr-education/news/higher-starting-monthly-pay-shocks-fresh-grads

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the same time, this inculcates a sense of responsibility in individuals. Ultimately, these skills contribute to the overarching notions of self-efficacy, self-esteem and internal locus of control. The workplace provides a conducive environment for graduates to build confidence in his or her ability to achieve goals, leading to the belief that they, not external factors, are in control of their lives and fates. In turn, these individuals can be expected to achieve more confidence, capabilities and job satisfaction than globe-trotters.

These positive values were however not supported by corporate integrity and led to unethical conduct. Employees who felt that it was necessary to conform to the existing corporate culture further exacerbated the situation when choosing not to whistle-blow. Therefore, cognitive dissonance between ones personal values and a corporations culture may arise, leading to a state of dilemma and tension for individuals.

Risks & Mitigation:

4.2.4 Suppression of Individuality In most professional jobs today, mastery of a skill is required of applicants. Specialized degrees in fields such as medicine, law and architecture serve to develop students extensively in an expertise. The specific focus of a degree or job may thus limit avenues of self-expression of an individual. Furthermore, companies promoting organizational commitment, employee engagement and job satisfaction will be likely to possess a strong organizational culture. It is highly likely that given the amount of time spent in a workplace, organizational culture may suppress individuality of employees. For instance, Enron had a corporate culture that promoted values of risk taking, aggressive growth and entrepreneurial creativity.
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4.2.5 Work Stress Modern life, particularly that of working adults, can be said to encompass significant levels of stress. In a local context, the workplace environment is demanding, in which professionals often make personal sacrifices for job advancements. Furthermore, the proliferation of 3G and LTE handheld devices and tablets has increased connectivity on-the-go, allowing employees to take work wherever they go and indirectly increasing working hours. In a survey conducted by JobsCentral in 2012, 66% of respondents stated that their workload has increased in the last 6 months. Of them, 83.3% said that as a result,

work stress has also increased in this same time frame. Stress overload directly leads to detrimental cognitive, emotional and physical symptoms. Cognitive symptoms include memory problems and inability to concentrate while emotional symptoms consist of irritability and depression. More visibly and worrying, physical symptoms may include aches, dizziness and nausea. These negative effects associated with stress hence highlight a considerable con of choosing a career over globe-trotting. Mitigation: Acknowledging the potentially stressful situations that employees may face, corporations have begun to introduce stress-reduction programmes and support channels for employees to feedback. For example, Aetna, a leading insurance company has recently introduced two new mind-body stress reduction workplace programs known as Mindfulness at Work and Viniyoga Stress Reduction in 2012. Aetna CEO Mark Bertolini recognizes the problems associated with work stress and was quoted as saying, Stress can have a significant impact on physical and mental health, so there is a strong need for programs that help people reduce stress as part of achieving their best health21. The noticeable trend is that corporations are increasingly taking into account work stress and

are starting to take active steps towards managing and reducing stress of employees before it becomes damaging. The increased awareness of workplace stress and proactivity of corporation in addressing them removes much of the social stigma associated with workplace stress and its sufferers. Therefore, it becomes easier for individuals suffering from work stress to come forward and seek help from their employers and expect their employers to be understanding.

21 Retrieved from: http://www.businesswire.com/news/home/20120223005984/en/Aetna-Delivers-Evidence-based-Mind-Body-Stress-Management-Programs

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5. OPPORTUNITY AND RISK ASSESSMENT

5.1 Evaluation Tables Referring back to the Probability-Impact Matrix (Figure 3.1), the probability and impact associated with potential events are evaluated and assigned. Through this, the opportunity or risk levels of each event are determined, falling under levels of Low, Medium and High. For instance, achieving selfactualization as a result of globe-trotting is deemed moderate in likelihood of occurrence and constitutes a major impact. Thus, in this case, the resultant level of opportunity would be High and opportunity score would be 6.

Evaluation Table: Globe-Trotting

PROBABILITY IMPACT OPPORTUNITY /RISK LEVEL SCORE

Benefits
Gaining a Global Perspective: SelfActualization: Financial Management: Discovering Passion:

Likely Moderate Likely Unlikely

Major Major Moderate Moderate

High High High Low

9 6 6 2 23

Total:

Costs
Financial Burden: Opportunity Costs: Instability: Inability to Readapt:

Likely Likely Moderate Moderate

Major Major Moderate Moderate

High High Medium Medium

9 9 4 4 26

Total:
Figure 5.1: Evaluation Table for Globe-Trotting

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Evaluation Table: Degree/Career

PROBABILITY IMPACT OPPORTUNITY /RISK LEVEL SCORE

Benefits
Career Opportunities: Money: Critical Thinking & Analytical Skills:

Likely Moderate Moderate

Major Major Moderate

High High Medium

9 6 4 19

Total:

Costs
Suppression of Individuality: Work Stress:

Moderate Likely

Moderate Major

Medium High

4 9 13

Total:
Figure 5.2: Evaluation Table for Degree/Career

As seen above, evaluation tables for both globe-trotting and choosing a degree allow the tabulation of quantitative scores of benefits and costs under the 2 routes. With respective to globe-trotting, benefits identified garnered a total opportunity score of 23 with 3 High and 1 Low opportunities. On the other hand, total risk score was 26 for globe-trotting, largely pertaining to the High risks of a financial burden and opportunity costs. As for the path of choosing a degree and career, total opportunity score of benefits was 19, substantially lower than the opportunity score of globe-trotting. However, total risk score was noticeably lower than that of globe-trotting, where a score of 13 reflected the low-risk nature of this traditional route. These results are consistent with the risk-return tradeoff principle, where low-risk and high-risk investments are associated with low and high potential returns respectively. The globe-trotting route can thus be classified as a high-risk option for Gen Ys in contrast to the low-risk option of pursuing a degree and career.

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Risk Assessment Table

RISK INHERENT RISK
Probability Impact REDUCE Finding part-time work overseas alleviates financial costs Seek out cost-saving tips via online platforms (blogs, vlogs) REDUCE Developing valuable life lessons and other skills during globetrotting reduces opportunity costs Globe-trotters may pursue online courses to develop subject-matter knowledge REDUCE Able to reconnect with family and friends in Singapore through Internet data-based means of communication (Skype, Viber) ACCEPT ACCEPT REDUCE Better manage stress through stress-reduction programmes and support channels available in companies

RISK RESPONSE

RESIDUAL RISK
Probability Impact

RISK SCORE

Financial Burden

Opportunity Costs

Instability

Inability to Readapt Suppression of Individuality

2 2

2 2

2 2

2 2

4 4

Work Stress

Figure 5.3: Overall Risk Assessment of Globe-Trotting & Degree/Career

However, after considering mitigation of the identified risks, residual risk scores are substantially lower. As seen in the Risk Assessment Table above, the globe-trotting route now encompasses a total risk score of 18, resulting from the mitigation of financial burden, opportunity costs and instability. As for the degree and career option, risk score is now 10 instead of 13 given that potential impact of work stress has decreased.

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6. FINAL RECOMMENDATION
After an extensive analysis of the various factors mentioned above, we propose 2 different recommendations for the 3 identied segments of Generation Ys. 6.1 Small Risk Appetite: Degree/Career The rst segment of Generation Ys has a small risk appetite range of 1 to 12. Residual risk score of 10 for the degree/career route thus falls within the acceptable risk range. On the other hand, the high risk score of globe-trotting of 18 deters them from undertaking this route. Consequently, they should pursue a degree and start their career immediately to achieve their current objectives. They would be more comfortable with this arrangement as they are usually more concerned with nancial independence rather than exploring the world and attaining self-actualization. 6.2 Moderate & Large Risk Appetite: Globe-Trotting On the contrary, Generation Ys with moderate risk appetite are caught in between choosing globe-trotting and getting a university degree. Based on the inherent risk values of globe-trotting, it would seem to be beyond the risk appetite tolerated by this segment. However, adopting the risk responses suggested above mitigates these risks. Resultant residual risk score of globe-trotting is 18, hence falling within the risk appetite range of 1 to 24. As mentioned in Section 2, a Generation Y individual should opt for globetrotting since the option is more aligned with the need for self-actualization. Facing the choice of both options, individuals with moderate risk appetite would thus be better served with globe-trotting given that self-actualization is of higher importance than needs of esteem. The last group with the highest risk appetite range of 1 to 36 is able to tolerate a higher risk. Total residual risk score of 18 for globe-trotting is well below their risk appetite limit. Consistent with the risk-return trade-off principle, they should also seek to maximize their returns for their target risk appetite. They should thus choose the option of globe-trotting which provides an opportunity score of 23 as compared to the score of 19, that of obtaining a degree and pursuing a career. 6.3 Good or Bad Move? In conclusion, whether globe-trotting is a good or bad move will depend on the objectives of the individual as well as his or her risk appetite. If the option of globe-trotting is aligned with his or her objective and falls within the risk appetite, it will be the optimal decision for the individual. Through risk management, we can thus arrive at a sensible decision with regards to the issue.

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