It has not even been 11 years since the first iPhone was released. Netflix only started streaming video a decade ago. Twitter was launched in 2006.
In the context of human history these are incredibly recent developments, yet they have become pervasive in that short space of time. They illustrate how the way we live has changed dramatically since the start of the millennium.
Technology has changed the global environment, and it has changed how we work and what we expect from employment. Our expectations are dramatically different today compared to what they were 15 or 20 years ago.
“The nine-to-five work week is a relic of the 20th Century,” says Dion Chang from Flux Trends. “Who hasn’t answered an email on the smartphone? We are all remote workers.”
The generations entering the workforce today have a quite-different idea about how their careers are going to look. Having grown up with the internet, social media and intelligent personal assistants as part of their every day lives, they have a perspective that would not have been shared by their parents and grandparents at the same age.
The old template of work, which Chang calls the ‘linear way of living’, is foreign to them. They are not going to follow a path of completing school, going to university, getting a job, working until they retire and then putting their feet up.
“They expect to zigzag through their working life,” Chang says. “In a digital era, skills become redundant quickly, and they will have to upskill; do something different.”
Many will anticipate educating themselves again mid-career. They may take mini-retirements to take time off, and come back to work again. They know that they will probably work well past the current retirement age, and in fact may not contemplate a final retirement at all.
Their lives will be defined by this flexibility. And it is something for which the financial services industry is largely unprepared.
The products being offered to employees today are essentially the same that have been available for decades. Employees are being offered pension funds, death and disability benefits, and education savings plans based on the experience of providing these products to people living a ‘linear’ life.
How relevant are these solutions to those joining the workforce today, who are frequently changing employment, freelancing in the gig economy, and not expecting life events to happen in a straight line?
Financial services providers have to become more creative in thinking about solutions that are meaningful to people living their lives in a substantially different way. Pension funds that are based on the idea of someone starting to contribute at the age of 25 and carrying on for 40 years until they retire and then start drawing on those savings are the first place to start.
Language of disengagement
“Should we even still call it retirement?” says Nomha Kumalo, head of organised labour and public sector at Momentum Corporate. “How are we reconsidering the vehicles through which we provide financial solutions? The language we use might even be driving disengagement.”
You can’t convince someone that saving for their retirement is necessary when they have no intention of retiring in the traditional sense. To make saving meaningful, it has to be relevant.
Employers and financial services providers can no longer get away with imposing products on employees and clients. As Regard Budler, the head of product solutions at Momentum Corporate notes, solutions have to be designed from listening to what people really need.
“They want change,” he says. “They are used to success on demand. We have to think differently about the way we work, and where we work. We have to ask people what really matters to them and solve through that approach.”
Ultimately, the changes to products might be subtle, but how they are packaged and presented will be key.
“The challenge is finding a balance between the stability of products and remaining relevant to the needs of the workforce,” says Budler. “Fundamentally people might need the same thing, but the way we execute it and the way we deliver it has to be more flexible. One size has never fitted all, and it definitely isn’t going to in future.”