Will it be normal to have declining pay in your 60s? Or 70s? Or 80s?
In the panel session, there was a very interesting question about how did I see career progression in the future.
I used the analogy of bridges. Most of the owners of iconic bridges such as the Sydney Harbour Bridge now make money by letting tourists climb up one side, see the view from the top and then climb down the other. And this is how we need to look at careers in the future.
We are all living longer, staying fitter and wanting or having to work longer. Three or four generations in the workplace will become the norm and with people retiring later we will need to find different career patterns from those we have had in the past.
We used to think about climbing the career ladder; you started at the bottom, climbed as far as you could and retired at the top. Pensions were based on your final year salary, and all career development was based around fitting you for a progression up the ladder.
I think in the future we need to think more about different shapes for careers and one of them will look a bit like the Sydney Harbour Bridge.
We will have people in the workforce who may well be in their 70s or 80s but they are unlikely to be CEOs. That is more likely to become a job you do in your 40s and 50s when you are at the height of your energy and ambition. When you have reached a point where you no longer want to work the hours and take the pressure that inevitably comes with a leadership role, you may decide that using your accumulated wisdom and experience in different ways may be more rewarding.
So careers start to look more like an arc than a ladder and pay probably will come to reflect that.
There is already a mis-match between peak need (when you have children in education) and peak salary (generally as your children have left home).
The thought of decoupling salary levels from seniority may be very radical but it may make greater economic sense in the future.
What is clear is that we need new thinking about career structures in the future. Our other model, beside the ladder, has been the triangle, with junior people at the bottom of the triangle and senior leaders at the top. As technology starts to wipe out junior and middle management jobs this model will be hard to sustain.
There needs to be some innovative thinking around how we develop the people who will be the senior managers of the future but who will not have the opportunity to gain experience in junior roles because those roles will no longer exist.
I know one law firm which used to do something on these lines. When it was still an old-fashioned partnership, they had partner profit shares which started on 3 points – typically partners were in their late 20s at this stage. This went up to 5 points when by the time a partner was in their mid-30s and stayed at that level until the partner reached their mid-50s, when it dropped back to 4 points until they retired. The thinking of the firm was that partners needed the most money when they had family and young children, and needed less towards the end of their career. I suspect also that there was less pressure on the senior partners to deliver the same fee-earning levels at this later stage – they were perhaps contributing more wisdom at this stage than relentless hours.
So in many ways this rather traditional firm was actually ahead of its time!
We are seeing some move towards this declining arc already – but it tends to be individually negotiated and rather ad hoc, than a firm-wide career plan. Many businesses are winding down senior people to four days and then three days when they reach their 60s – or retire their directors and then employ them as a consultant on projects or a few days a week.
This is a real challenge to the HR community but one they need to engage with seriously to manage the changes that are coming in our work and lives.
Has your company started looking at this, how are you approaching it and what do you see as the challenges?