As longevity extends and the way we work is transformed, a new work-life model is replacing the traditional career path of the past.
Those 55- to 65-year-old employees within your organisation have mostly followed a typical three-stage path involving education, career and retirement. It is a pattern with which the corporate world has become familiar and comfortable.
Lynda Gratton believes this pattern is about to be smashed to pieces. Gratton, a professor of management practice at London Business School, is widely acknowledged as one of the world’s top business thinkers, and she has spent the past three years modelling work and life in an age of longevity.
Gratton explains that corporations in advanced economies are currently built to suit “Jack”, a man in his 70s who followed the three-stage path outlined above. But those same businesses are fast filling with people such as “Jane” – 20 years old, just starting her career and facing a very different journey. Jack can be expected to live to 84; Jane will live closer to 100.
For a person like Jane, says Gratton, that means working into your late 70s or early 80s. In modelling such a life, she concluded that Jane’s life would need to have a different structure.
“We quickly realised the three-stage life – education, work, retirement – was impossible,” she says. “Who can work from 21 to 75 non-stop?”
Gratton and her colleagues began to look at work types, family relationships and leisure time and the repercussions for governments and corporations.
Businesses face big changes. Gratton’s Jack worked in maybe three companies during his career, while wife Jill brought up children. He retired at 63 and died at 75. For Jane, even if she has a partner for life, they will both work full-time. She will work in an environment with artificial intelligence and robotics. She will likely re-skill and change careers along the way.
“Corporations are still built for Jack,” says Gratton, “but they have to start being built for Jane.”
How to prepare for the journey
1. Plan to work into your 80s (yes, your 80s)
If you want to retire on 50 per cent of your income and save less than 20 per cent of your salary, this will be inevitable. Don’t believe government projections; for good or ill, you will need to work much longer than you think. Longevity and the issues it creates – for government and corporations, as well as for you – may be a major preoccupation in your life.
2. Focus on your intangible assets
As working lives change and people work for much longer, you’ll need to build your intangible assets, such as networks, friendships and skills. In addition, transferable skills will be crucial as industries undergo important structural changes.
3. Prepare for transformation
The notion of the traditional three-phase life – education, work and retirement – is increasingly becoming outdated. The idea that we can condense our life milestones (education, job, family) into the first half of our life and then retire in the second half is not reflective of our greater longevity.
To keep working, you will need to undertake education at different stages of your life and be prepared to continually adapt to a rapidly changing workforce throughout your career.
4. Think hard about your skills
The capacity to transform yourself and your skills throughout your life will be absolutely crucial. The types of jobs available will change. Artificial intelligence (AI) will replace some; driverless cars, for example, may become the norm. IBM’s Watson, an AI program, is trained across many different roles, including quite sophisticated ones such as cancer diagnosis. Non-routine jobs requiring creativity, cognitive complexity and analytics will be the ones where machines make least impact.
5. Balance work and home
Charles Handy coined the term “portfolio life” in his 1989 book, The Age of Unreason. The portfolio life refers to one that has less delineation between work, family and interests. Gratton refers to the energy cycle between work and home and suggests that it needs to be a positive rather than “caustic” cycle, given the length of a working life.
The relationship between the corporation and the individual has moved from parent-child to adult-adult, and it will be up to individual adults to create the life they desire.
Contributed by – Chris Sheedy
There is no doubt the world around us is changing at a pace that’s hard to keep up with and I suspect it’ll only move faster in the years to come.
Should you wish to discuss your financial goals & aspirations in a changing world, from investment opportunities to longevity risk (will I outlive my money), then I invite to make contact for a free discussion.
If you would like to know more about how we may be able to help you plan for your future, call us on 1300 99 77 34 or email your inquiry to firstname.lastname@example.org for a complementary initial consultation.
David Hasib – Director, Chan & Naylor Wealth Planning