PLANNING AHEAD
Some governments in Europe have already developed initiatives which could be developed to meet the challenges presented by digitisation and longevity.
In Denmark, for example, unemployed people have to visit the national employment agency every day in order to receive their benefits. Clavel says: “If there is a temporary role or part-time job available, they must take it.”
If there is no work available, then they have to learn some new skills, work on the CV or meet other people. Clavel says: “This has been proven to keep people in the habit of working.”
As they are spending time with other people, there is less chance of them feeling isolated and they can also improve their skills. Clavel says: “Even though they might not be working, they have done something positive with their day.”
In Sweden, the unions and the employers’ trade association have formed an organisation which helps employees to re-skill. Clavel says: “When a company indicates it will close a production facility or is going bankrupt, this entity swings into action.”
Months before employees lose their job this organisation helps employees to look for new jobs and starts to re-train staff. Clavel says: “This program is good at helping employees to prepare for their future.”
As well as helping staff to find new jobs and re-skill, it also funds complementary unemployment insurance while they are re-training.
Clavel says: “This incentivises the staff to re-train because they receive more money than they would receive from unemployment benefits.”
AN OLD AGE PROBLEM
These employment challenges caused by technological disruption will only be further exacerbated by improvements in longevity. As Lynda Gratton and Andrew Scott explain in their book “The 100-year Life”, there will need to be significant shifts in socio-economic models.
As lives get longer, it will not be possible to simply extend your working life by increasing the state pension age. Gratton and Scott suggest that it’s too challenging to maintain skills, productivity and motivation over an increasingly long period of time.
As longevity increases the ‘three-stage life’ model – university, employment and retirement – will become increasingly inadequate. People will experience more stages to their lives.
Those different stages will vary from one individual to another but it is likely that retirement will become less of a cliff-edge decision and there will be a gradual movement towards retirement including periods of part-time work.
To remain productive and in good physical and mental health over the course of a longer life span will require periods where work becomes less of a priority. People may also need to learn new skills during these transition periods.
Policy makers have started to think about the necessity for re-skilling. Cooper says: “The Cridland review called for people to be able to re-train rather than move from full employment to full retirement.”
However, this concept should not just apply to those who are on the cusp of retirement – it should be available to those who have been employed for five or 10 years, says Cooper.
“The half-life of careers will accelerate making it more important to re-skill more frequently,” he adds.
James Carrick, global economist at Legal and General Investment Management, agrees: “It’s likely that people will need to re-train once every two decades.”
That might require a re-thinking of the way education resources are allocated. Carrick says: “Rather than trying to increase the proportion of young people in higher education at the start of their career, it would make more sense to spread these resources out over a lifetime.”
