Those of us over 30 have been raised with the idea of a traditional three-stage approach to our working lives: first education, then work and finally retirement. But this approach is already starting to crumble as life expectancy is rising, and generous pension systems are vanishing. More people juggle multiple careers. Others transition to different jobs and careers multiple times throughout their lives. Increasingly, each individual will have to design his / her own multi-stage life and acquire skills and knowledge at different stages. Life stages will become age-agnostic. This, in turn, will have numerous implications for corporations and how they recruit, train, and manage people.
Lynda Gratton is Professor of Management Practice at London Business School where she leads an executive programme on ‘Human Resource Strategy in Transforming Companies’. Andrew Scott is Professor of Economics at London Business School. Together they combine psychological and economic analysis to provide precious insights into how to rethink work, finances, education, career, and relationships in an age of longevity.
« Too much of current policy is aimed at the final stage of life and viewed through the prism of a three-stage life. The consequences of a 100-year life are for everyone, not just the old, and involve far more than adjusting the level of pensions or flexing the date at which retirement starts. »
« Issues of identity, choice and risk become central to questions of navigating a long life.” “So you will need to think about your identity in a different way from those who came before.” “Long lives are lives of transitions (...) Simply following the herd is not going to work » - Lynda Gratton & Andrew Scott in The 100-Year Life.
The gift of a longer life
There are many scientific debates as to whether or not there are strict biological limits to how long we can live. Some scientists believe that better nutrition, healthier lifestyles and spectacular advances in medicine mean we can continue to push that limit further and further. For more than two hundred years now, there has been a steady increase in life expectancy that may well continue in the foreseeable future. Since 1840, we have gained two to three years of life every decade!
But « greater life expectancy is only a good thing if life itself is good ». What if increased life expectancy meant that many more people are unhealthy? On the subject, the authors are more optimistic than all of the doomsayers. They insist there is a growing body of research that shows that morbidity is decreasing. Not only do we live longer, but we also stay healthy for longer.
Greater life expectancy is only a good thing if life itself is good
From a three-stage to a multiple-stage life
Education, work and retirement. The three-stage life is a model still largely dominant today that we have inherited from the 20th century. The creation of a new stage—retirement—was a major victory (largely owed to powerful labour unions). This model shaped all our institutions: our education system, work legislation, taxation, etc. It’s also shaped management and human resources.
In linear careers, workers gain extra revenue as they gain extra experience. Also, each age matches a stage and different age cohorts do not mingle much. With that model, specific characteristics are attributed to different age groups: the young are expected to be nimble and malleable while the old are supposed to be experienced and wise. It generally leads to age segregation in the workplace and in society—ageism.
As we live longer and longer, the traditional ways to finance retirement will no longer remain viable. If we keep the three-stage model, we will have to work longer and longer and still accept to become poorer and poorer. But if we move away from the three-stage life and tackle the issue more creatively, then there are many more appealing options. For Gratton and Scott, « the three-stage model of life is dead. This is because the only way to make the three-stage life work financially is to create a very long second stage of working, but (...) the likely impact on non-financial assets such as productivity or vitality is ultimately undesirable. »
The future of work and the employment landscape
If we can expect to live to be 100, then it will mean our work lives will stretch over 60 years! As our economy is transforming fast, new jobs will be created, many companies will die, sectors will change, new technologies will require new skills and the way we work will undergo further changes. Who could possibly plan for a 60-year career in a fast-changing environment? The only certainty is that more career transitions will be necessary both to avoid complete boredom and to get new skills when the old ones are obsolete.
New ecosystems will emerge with significant sectoral changes. « There will be substantial changes in who people work for ». A century ago, the average life of an S&P 500 company was 67 years. By 2013, it had reduced to 15 years. In other words, people live longer but companies die sooner (not that the two things are necessarily related).
Large firms won’t disappear overnight, but they will increasingly rely on an ecosystem of smaller businesses and startups (indeed they already are), which will provide a wider variety of employment opportunities. « The flexibility that the ecosystem model offers makes the prospect of self-employment at certain stages a viable option ». And the barriers between leisure and work will become blurry.
Last but not least, the « hollowing out of work » is likely to continue, with more low-qualified and highly qualified workers in high demand. Meanwhile, medium-skilled jobs, which are often routine (manual or cognitive) are being automated. Technology replaces medium-skilled jobs but complements skilled and unskilled workers.
Tangible and intangible assets
« Intangible assets play a crucial role in our lives ». A supportive family, great friends, strong skills and knowledge, a good physical and mental health: these are all the intangible assets that we need for a good life. Yet we tend to focus more on financial planning (managing tangible assets)... For Gratton and Scott, asset management must take both tangibles and intangibles into consideration. Our assets « require careful maintenance and mindful investment ».
Intangibles can be divided into 3 categories:
- productive assets (skills and knowledge),
- vitality assets (health, friendship, family),
- and transformational assets (self-knowledge, diverse networks, openness to new experiences).
In the three-stage model, workers could make the productive assets acquired in youth last all their work lives. As for their vitality assets, they relied on their spouse, the weekends and the retirement stage to make them last long enough. Transformational assets were not indispensable.
In a multi-stage model, mental flexibility and agility (transformational assets) become necessary. « The conundrum is that no single specialization is likely to be sufficient to support productivity over long working careers ». “Transformational assets (...) increase the ability to deal with the uncertainty of transition.”
The conundrum is that no single specialization is likely to be sufficient to support productivity over long working careers
As people change jobs and acquire new skills, they will also need to rely on their reputation to make these transitions successful. To have a strong sense of self through multiple professional identities, they will need to know themselves better. « Identity is being crafted rather than assumed or inherited and, for this process of crafting, self-knowledge plays an important role. »
What it means for HR
Organisations will increasingly become a medium through which an individual can pursue their personal aspirations. Each opportunity will be analysed for its transformational potential. Plus for workers who have explored more options and know themselves better, finding fulfilment and sticking to their values will matter more than before.
When people move from three to multiple stages, there are many more possible sequences and not everyone will select each stage. Up to now, we have equated stage with age, but age and stage will be more and more decoupled. Older people will retain qualities that were associated with youth: plasticity, playfulness, and the capacity to support novel action taking. « Retaining adolescent features into adulthood will become more useful. » This will mean that people of different ages will engage in the same activities and mix much more. « This creates an opportunity for everyone to grasp the flexibility and inquisitiveness of youth and the wisdom and insight of age. »
Some of the new stages will include exploration, portfolio activities (combining multiple activities at the same time) and being an independent producer. Flexibility at work will become increasingly important, for men as much as for women.
For HR the challenge will be to move away from the old three-stage model, let go of ageism and rethink recruitment, training and managing in light of the 100-year life. « It would be useful to acknowledge and identify intangible assets ». « Corporations need to support and acknowledge employee transitions and the profound requirements they will have to develop and protect their transformational skills. It is inevitable that most employees will, at some point in their career, make a transition, and there is a great deal that firms could do to support them in this.»
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Writing: Laëticia Vitaud
Illustration: Pablo Grand Mourcel