As our population ages, the traditional career path is being replaced in favour of a balanced work-life model.
Traditionally, people have lived their working lives by a pattern of education, then career, and then retirement. Lynda Gratton, a professor of Management Practice at London Business School, has spent her career looking at the future of work and believes this pattern will not be “the norm” in the future.
In her book, The 100-Year Life, co-authored with Professor of Economics Andrew Scott, 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.
“If you’re likely to live to 100 and want to retire on 50 per cent of your salary, which most people want to do, then you have to work into your late 70s or early 80s” says Gratton, ”We quickly realised the three-stage life – education, work, retirement – was impossible. Who can work from 21 to 75 non-stop?”
Gratton and her colleagues looked at work types, family relationships and leisure time and the repercussions for government and corporations and concluded that businesses face big changes.
“Corporations are still built for Jack,” says Gratton, “but they have to start being built for Jane.”
Gratton’s Jack worked in approximately three jobs during his entire career, while his wife “Jill” raised their children. Jack retired at 63 and died at 75.
For 20-year-old Jane, she will work full-time, even if she has a lifelong partner who also works full-time. She will likely re-skill and change careers along the way and will work in an environment with artificial intelligence and robotics.
How to prepare for the journey.
1. Prepare and plan to be working into your 80s.
Regardless of what the current government projections say, if your goal is to retire on 50% of your salary and save less than 20% of your salary, working into your 80s is inevitable. Planning for this inevitability is vital to ensure you are well prepared
2. Build your relationships and skills (intangibles).
Lynda Gratton and Andrew Scott list Intangible Assets in three categories; Productive Assets (an individual’s skills, knowledge, reputation and professional networks), Vitality Assets (strong mental and physical health, a good work-life balance and powerful regenerative relationships) and Transformational Assets which involve self-knowledge and the types of diverse networks that support personal change.
“Intangible assets are critical for enabling a long working life. At any point in time, people will need to be either actively building or maintaining these assets, or they will depreciate.
3. Be ready to adapt and grow.
As the traditional three-phase life model (education, career, retirement) is increasingly becoming outdated, the ability to adapt to a continually changing workforce throughout your career is instrumental.
You will need to undertake education at different stages of your life and be willing to learn and acquire new skills at later ages than your predecessors. The types of jobs available will change, particularly with the growing use of Artificial Intelligence. Non-routine jobs requiring creativity, cognitive complexity and analytics will be less impacted by Artificial Intelligence.
4. Work and home balance.
Lynda 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 is changing and flexibility is a must to keep the relationship healthy and to ensure that, with your longer working life, you are still enjoying life outside of work.
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 and aspirations in a changing world, from investment opportunities to longevity risk (will I outlive my money?), then call Alina today on 1800 93 10 20.