In the past decades, there have been significant technological advancements across sectors. These advancements have created concerns about the likelihood of loss of job opportunities due to the replacement of human labor with machines. In fact, the report by the Committee for Economic Development of Australia cited that about 40% of jobs will be lost to machines by 2025 (Florance and Partland, 2015). The ripple effects of this trend will be felt across all levels including highly skilled professionals. The reality of this phenomenon has worried many experts who now pressure the government to formulate sustainable solutions especially with the realization of increased living age to more than one hundred years. Unlike years ago where people aged more than one hundred years were rare, it has become a norm nowadays with more than five hundred thousand people aged more than 100 years worldwide. In Australia alone, there are more than 4,440 people aged more than 100 years (Egan, 2012). The United Nations projects that there will be about 3.7 million people aged more than 100 years in the next three decades. Scholars have attempted to understand and explain what these new trends mean for the business environment especially the human resource and how people can implement measures to live longer lives. Gratton and Scott (2016) argue that fundamental changes must be implemented especially about how people think about human resource management to overcome the challenge of increased lifespan and enjoy the years lived. In this regard, the section below illustrates how the "100-year life" will affect the human resource field as well as the business environment at large.
With the extension of life years and transformation of the way in which people work, a new work-life model has emerged to replace the conventional career path. Currently, people aged between 55 years and 65 years have followed the conventional career path of three stages including education, career, and retirement. Many business organizations and human resource theories have been anchored on this path. In other words, Gratton and Scott (2016) explain that the contemporary business organizations have developed their management systems to suit "Jack", who is a man that follows the conventional career path. However, these organizations are rapidly absorbing people like "Jane" who are people of about 20 years old and just starting their career that faces a different journey. While Jack is expected to live up to about 80 years, Jane is expected to live more than one hundred years (Gratton and Scott, 2016). Also, Jane has a high likelihood of working until the age of 80, unlike Jack who retires at early 60s. These projections demonstrate that the three stages of career are no longer realistic or relevant. The extension of living years necessitates many changes in the conventional systems to accommodate the new work types, family relationships, and their effects on the business organization. In order to understand how the new management systems would work, it is important to consider the life of Jack and Jane. For Jack, he retires at 63 years and dies at about 77. For Jane, it is likely that she will work full-time in an environment characterized by robotics and artificial intelligence. In addition, there is a high likelihood that she will acquire new skills and change careers in her life.
Changes in Workplace Relations
Some of the implications of the 100-year life on business management and leadership mostly touch on the change of stages of career and workplace relations. Unlike Jack with three stages of a career, Jane will have six stages. The new stages will be due to increased independence which results in more producers. The new workforce will have the choice of working independently or with a small team because advancements in technology are significantly cutting down the manpower required. The high likelihood of Jane spending a significant portion of her career as a freelancer would mean that she would have plenty of time to travel, go back to school to further studies or retrain. While people are currently building portfolios that enable them to do many things, it is yet to become recognizable but with the new workforce, this tendency will be a norm.
The adoption of new management systems raises concerns about how they will fit in the existing education and work environments that already comprise of many aged people. However, Gratton and Scott (2016) argue that the negative attitude towards old people about their obsoleteness in workplaces will gradually go away. That is affirmed by how people nowadays perceive age and life stages. For instance, if one goes to University, he/she must be twenty-one years old. With the new workforce of 100-year life, the mentality of equating age with stage will not apply. The workforce will be accommodative of people of various ages. In fact, that trend has already begun as evidenced by the many people aged 60 years and still working. 60-year olds were considered old decades ago. In today's world, 60-year olds work together with 30-year olds, have an almost same dress code, and talk about same topics. The peers cannot define the 60-year old by his/her age because people with different ages but engage in same activity have reduced age friction.
Changes in Mentoring at Workplaces
Coupled with technological advancements, age longevity introduces challenges in mentoring at workplaces. Typically, it is expected that the employee with more experience to mentor the new employee. However, in a world where a 65-year old could lack specific technological skills, the young employee (25-year old) would become the mentor hence changing the mentoring process from one-way to two-way. Currently, managing Jack's career is relatively straightforward which explains why outsourcing has become commonplace. However, managing Jane's career would be more complex and would require sophisticated skills and personalized way of thinking toward processes and practices.
Long Life Would Mean More Savings
The longer the people live, the more they will be needed to save. It is good news that people are now living longer and healthier lives, but they come with the challenge of financing the longer lives. Studies have shown that many people are not saving enough money for their retirement and if the theory of 100-year life is anything to go by, there are worrying concerns. Increased years of living mean that people have to save more or work for many years than they did decades ago. The call to save more raises the question how much does one need to save yearly. Gratton and Scott (2016) explored this issue and explained it using three characters that have different characteristics; Jane, Jack, and Jimmy. Jack is expected to live up to 70 years, retires at 62, benefits from a government pension, employer's pension, and personal savings. Using a novel method, Gratton and Scott (2016) established that Jack needs to save approximately 4% yearly. The same method was used on Jimmy who is currently 40 years old, has a life expectancy of 85 years, and does not have a pension scheme. Assuming Jimmy was to retire at 65, live up to 85, and benefit from pension worth half of his final salary, he needs to save 17% yearly in his entire career. Using the same method on Jane who is a millennial, wants to retire at 65, has a life expectancy of 100 years, she must save 24% of her income yearly.
The results obtained by Gratton and Scott (2016) indicate that it is extremely hard for many people to meet the savings target for Jimmy and Jane. For that reason, Jimmy and Jane will not retire at their preferred age of 65 years. Assuming that both individuals could manage to save 10%, which is still hard, Jimmy would retire at 72 and Jane at 80. Considering that Jimmy is already 40 years old, that would mean he has more working years ahead than behind him, while Jane will have a 60-year career. Currently, this trend has started to manifest with an increase in the number of people aged above 65 and even 70 years still working. The new trend has diminished the effects of retirement whereby one comes to an abrupt stop at work after attaining a given age.
The Emergence of Multi-Stage Life
Considering Jane has just started her career at early 20s and will have a 60-year career, it is highly likely that she will make different choices than her parents. As noted earlier, increase in life years means that the three-stage career cannot hold hence the emergence of a life with several stages. The fact that Jane could work for 60 years means that she can manage her financial assets throughout her life. However, it is important to note people also invest in intangible assets like productive assets (skills and knowledge), vitality assets (mental and physical health), and transformational assets (ability to adapt) (Reily, 2016). While a 60-year career would help Jane preserve her financial assets, her productive assets would have disappeared by the time she is 80 years old. This is because very little that is learned at 20 years would still be applicable at 80 years old. Having long careers would mean that we will have to reinvent ourselves in knowledge throughout our careers. That would be underscored especially if the technology is highly applicable to one's job. In addition, working for 60 years continuously would not be good for your physical and mental well-being. In the course of the 60-year career, you will be required to structure several stages of life. One stage could be dedicated to amassing financial assets, another stage to establish a work-life balance, and another stage to giving back to the society. All of these stages would necessitate a period of transition, retraining, and preparation which in turn would need us to improve the transformational assets. This trend is already happening as evidenced by United States House Speaker Paul Ryan during his confirmation when he said that he would only be confirmed if the job allowed him to take personal time to spend with his family (Kilgore, 2016).
The emergence of a life with several stages indicates that longevity does not necessarily mean aging. Aging refers to coming near the end of life while longevity entails all about the increase in life years. Longevity also indicates that we are likely to respond by restructuring our lives. For every ten years, life expectancy increases by three years. That is the same as adding eight hours in a day. A 32-hour day would mean living differently; waking at a different time, sleeping at a different time, and eating at a different time. In the same way, longevity in the 20th century resulted in the creation of two new stages of life including teenage and retirement. In the 21st century, new stages of life have been created whereby people are now marrying, buying a house, and having kids at early 30s unlike before when they did it at early 20s.
Changes in Investment Management
The reality of the 100-year life means that an individual would need to finance a longer life hence the need for more funds under management. While the idea of more funds under management is exciting, the concept of longevity is challenging because it undermines the three stages of life which underpin financial planning. In a three-stage life where an individual has one career, he/she plans to transfer funds during stage two to stage three. In a multi-stage life, one would transfer funds across many periods in their lifetime as well as finance transitions. Pensions were developed to suit the three-stage life. With the emergence of a new life approach, it would mean the need to redesign pensions and redefine wealth management.
The 100-year life introduces new risks in wealth management. Technological and medical breakthroughs that increase life years wou...
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