Learning Is The New Pension
There has never been a more exciting time to be in human resources (HR) - that was evident at the Unleash World annual summit in Paris, where I was honored...
Janina Kugel, CHRO at Siemens AG, who oversees more than 375,000 employees, declared in her remarks, “I personally believe that no organization in this world will ever reach whatever they have on their business agenda if they do not invest in continuous learning and continuous personal growth.” Josh Bersin, world-renowned industry analyst and founder of Bersin by Deloitte, who also gave keynote remarks at Unleash, recently shared that his research at Adobe, Guardian, and Bloomberg pointed to high-performing companies taking a build-versus-buy approach because of “[t]he net savings: it can cost as much as 6-times more to hire from the outside than to build from within.” Further, an IBM global study of the skills gap reported on in September 2019 found that “[a]ccording to the global research, the time it takes to close a skills gap through training has increased by more than 10 times in just four years. In 2014, it took three days on average to close a capability gap through training in the enterprise; in 2018, it took 36 days.” How do we make these leaps to keep up? I think we need to shift our thinking about what learning is and what it means to our organizations.
Every talk I do is bespoke for the audience and I continually add new concepts and frameworks in an ongoing attempt to help folks understand the rapidly shifting nature of work. Since this event, Unleash, was attended by more than 4,400 HR professionals, I sought to end on a provocation: Learning is the New Pension.
I have long contended that the future of work is both learning and adapting. Chris Shipley and I are currently finalizing a book on this topic, and despite our repeated mantras, find that many people still do not understand these essential shifts, which are as follows. Long gone are the days when you could dine out on the education you got in the early part of your life. With the twin forces of technology and globalization meeting the mega trend of expansive human longevity, our thesis is now reality. In the past we learned one time in order to work; now, we must work in order to learn continuously. What does this look like in action? Germany’s Otto von Bismarck’s Old Age Disability and Insurance Bill of 1889 created the pension in order to help workers set aside funds to fuel the last stage of their lives, when they could no longer work or no longer wished to work. A pension puts something away for the future—sets aside some current value as future value. In accord with Kugel’s and Bersin’s remarks and IBM’s tsunamic warning about the widening skills gaps, I believe that learning is the new future value that we all—individuals and organizations—need to create today for tomorrow. But how?
Upskill and Reskill Every Day
We tend to think of upskilling and reskilling as things one does when one loses a job or needs a path back into the labor market after time away, but the reality is that your job is moving, and if you are not, it may be moving away from you. Try this exercise: Consider the technology forces of automation and atomization. Automation is pretty clearly understood; currently, it is the assumption of routine and predictable tasks by technology. Think automated teller machines, online ordering, and real-time translation applications like Google Translate. Atomization is separating a task from a job and having it done by a human in isolation, outside the envelope of employment, often using platforms like Uber, Fiverr, Upwork, and TaskRabbit. Think about your current job and inventory tasks that are either routine or predictable and ripe for automation as well as tasks that can be separated from the rest of your workflow and accomplished through atomization. Then look at the rest of your work. Where can you deepen your knowledge and skills (upskill) and where can you port your knowledge, skills, and experience to a new domain or extend your skills into adjacent areas (reskill)? I recently interviewed Dr. Jeffery LePine, an expert on occupational behavior, who told me that people often conflate flexibility and adaptability. Flexibility is switching to the right tool in the toolbox as needed, whereas adaptability is taking one of those tools and forging a new function or creating a new process with it. Adapting requires learning something new. Using Dr. LePine’s thesis, both upskilling and reskilling are adapting and therefore require learning.
Companies Are Culture plus Capacity
It is important to pause and acknowledge that we are amid the greatest velocity of change in human history, which is compressing time. With the exponential advance of technological capabilities and our hyperconnected global society, products, services, and business models simply do not last as long as they once did. Research by Innosight found that the length of time a company stays listed on the S&P 500 has been dropping consistently since the 1960s. Research by the World Economic Forum found that the shelf life of skills that once lasted decades is now only a handful of years. What is a company to do?
Chris Shipley and I wrote about this a year ago, declaring that the most agile, nimble, and resilient companies will realize that they must focus on inputs (culture and capacity), not outputs (brand and products), because the most resilient companies zero in on culture and capacity. We believe the brand is just an external expression of the culture and the products and services created are just evidence of capacity and exhaust from learning. Simply put, high performance companies focus on why they exist (culture) and the new value they create (evidence of capacity). Culture is the operating systems comprising the tacit knowledge and behaviors led by the organization’s purpose, or guiding North Star, while values are behavior’s guard rails. In other words, culture is where you are going and how you are going to get there, and to be nurtured, it must be celebrated and sanctioned every day. Capacity is the organization’s collective and growing capabilities that enable it to respond to new challenges and forge new business models. Capacity requires learning. Learning builds capacity. As Peter Senge said in The Fifth Discipline, “The only sustainable competitive advantage is an organization's ability to learn faster than the competition.”
Old Economy Meets New Reality, and Many of Us Need to Leap
In almost every talk I give and in many of my articles, I use the twin frameworks that I call “old economy” and “new reality,” because taken together they punctuate the shift we need to make in our thinking. I say that in the old economy we learned in order to work and in that paradigm our identities were bestowed by third parties—from our universities to our company brands to our job titles to our trade unions or even our associations with our industries. In the new reality, where we will have many more jobs across a longer career arc, we need to develop internally validated, self-actualized identities in order to traverse our longer, more volatile, career webs, which may, according to research by the Foundation for Young Australians, include as many as 17 jobs across five different industries. In the old economy, we focused on education as the first third of our lives, sufficient only to get us on the career ladder, but now we need to focus on learning as a means of navigating our expanding career webs. I recently discovered that many in my audiences have come to think of the “old economy” as the reality in which they were prepared for work and as perhaps being still relevant to their career trajectory and of the “new economy” as being more applicable to their children, younger workers in their organizations, or simply the next generation. In reality, we are crossing over from the old economy to the new reality and many workers of all ages find themselves at the point of needing to leap from one paradigm to the next. As part of that leap, they may need to rebuild their identities after a job change or separation before they even begin to reskill or upskill in order to find an on-ramp back to the labor force.
Learning Is the New Pension
Now stop and think about those 36 days a year that IBM found we needed last year to close the ever-widening skills gap. According to OECD data, for the roughly 75% of workers in the United States who are afforded paid time off, the average is 10 days per year, while in the United Kingdom—at the other end of the spectrum—compensated time off averages 37 days per year. An average year has 261 workdays. That means that U.S. workers work an average of 251 days while U.K. workers work an average of 224 days, with the rest of OECD countries between that range of 224 to 251. The 36 days that the IBM research found we need to close the skills gap is 14 percent of the US work year and 16% of the U.K. work year. In other words, since an average workday is 8 or 9 hours long, to stay current, we should spend an hour a day learning to stay current today. Research by The Foundation for Young Australians suggests going forward, for the developed world, that percentage is going to be closer to 30%. Are you spending an hour a day on learning? Are your people spending an hour a day on learning? Do you prioritize learning? How do you recognize learning? How will you adjust your priorities to accommodate that 14-30% time?
According to research by the AARP, contributions to pensions range from 8 percent for private companies to 15%, split between employees and employers, for state and government workers. According to research by Fidelity, individuals contribute to their 401K at a rate of less than 7% at the start of their career to a high of 11.1% toward the end of their career, though financial advisors suggest putting aside 15 to 20% of gross income annually. Given these percentages and the amount of time required to close the skills gap, I can only conclude that learning is indeed the new pension. It is how you can create future value today. So, where does the responsibility lie? Should it be up to the individual worker or the entity to create the space and time for that learning and to provide the learning resources? I will leave it at the provocation and let those debates now begin but I will end with this. My fellow unleash presenter and colleague Peter Hinssen, cofounder of nexxworks and author of several books, notably The Day After Tomorrow, has a provocative theory on how we focus our attention vs. how we should prioritize our considerations. Peter’s 70/20/10 thesis is that, given the current speed of change, companies ought to spend 70% of their time, attention, budget and talent to managing Today, 20% to managing Tomorrow and 10% to their Day After Tomorrow. That’s because the long-term value, potential and return that come with a strong and radical Day After Tomorrow vision are essential to survive these fast evolving times. Interesting that the Foundation For Young Australians suggests 30% of your attention past today as does nexxworks. Now when you consider Peter’s chart and theory coupled with my provocation that Learning is the New Pension, what are you doing to do?
Special thank you to Liz Seif for editorial work on this piece.
This piece is a repost of an article that first appeared on Forbes.