Is it time for a Learning Pension?
By: Rajeeb Dey MBE
Just as we invest into ISAs and pensions to build up our lifetime savings, I believe that we should also invest into our personal and professional development, particularly as work changes over the next twenty years.
Statistics from McKinsey suggest that 50% of the work we do today will be automatable by 2030 and more than half of the jobs we see today may not exist by 2025, which means that we must invest in skills to prepare for that future.
Whilst we’re putting away money for our retirement, we’re making little effort to invest in our future skills, and that is going to be what keeps us and the economy productive and competitive. It is no longer a luxury but a necessity.
The government in Singapore recognizes this phenomenon. That’s why it introduced a scheme in 2015 that gives $500 to every Singaporean over 25 for a start under SkillsFuture, the country’s upskilling program. The scheme offers courses on everything from data analytics to cybersecurity in a bid to upskill workers before it’s too late. Whilst it’s not a huge amount, it’s step in the right direction.
We should do the same. Given Europe’s skills crisis, this progressive system would put the onus on employees to invest in themselves with the option for employers to top up the sacrifice to the value of the personal tax saving they would make. Just like a workplace pension, employees would have the chance to invest in the future and capitalise on rapid tech changes rather than being left behind or lose jobs.
Some countries in Europe are starting to take note of these developments. For example, France’s employment minister announced in 2018 new reforms that will give each employee up to €800 a year to invest in their own professional development.
It seems like the political parties in the UK are starting to get the message too. With the imminent UK General Election we have seen announcements from all major parties re a commitment to skills, with the Lib Dems making the boldest of all commitments pledging a £10,000 skills wallet for every adult in England.
What’s the role of employers in this?
Evidence has shown that the average employee doesn’t stay loyal despite office perks such as free food, dazzling offices, and yoga classes. In fact, 68% of them have changed jobs because of the lack of learning and development opportunities.
The majority of the workforce is comprised of millennials and Gen Z who, unlike the generation before them, are expected to work until they’re over 65 and many of whom will change jobs multiple times. As a result, an overwhelming majority of them recognise the need for lifelong learning and are willing to spend their own time and resources on further training.
We need to start seeing broader learning and development opportunities (beyond just mandatory company training) as a vital piece of work-life, offering it as a benefit or a perk. Just as we’d set out benefits in an employment package, we should demonstrate how our people will be able to learn and grow.
We need to ensure every business has a learning culture, with the right message coming from the top that investing time in personal and professional development is not only accepted but encouraged. Employees need to understand that they can and should take themselves away from their day-to-day job to develop broader skills.
Companies should take action on learning just like they would any other employee benefit. This can be done by putting a structure in place to make learning an official company perk and allowing employees to take advantage of it. In reality, this means that alongside your cycle to work scheme, gym benefits package and health insurance, employees would get a budget of time and money allocated for personal and professional development.
Businesses can win the war for talent by becoming learning organisations that are prepared for the future. Combined with a bold vision from Governments around re- and upskilling our people, we can stay relevant and thrive in the future of work.
