It use to be that you'd go to college - pick a major (hopefully in your first year) - work toward that goal - graduate - get a job - have that job forever and then retire. More like a marathon.
That has all changed.
It is increasingly more likely that a new graduate will choose two or three directions in college - take any job that interests them - or one that has nothing to do with their major - switch jobs frequently - and then - who knows? More like a series of sprints - sometimes in different directions.
- Life expectancy of a graduating college student: 90 years+
- Expected work life starting at the age 20 = 60 years
- Half-life of a career due to obsolescence = 7 years (and decreasing)
- Number of educational “major model upgrades” over a career = 8
While the assumptions above were used to develop a cost associated with keeping yourself up-to-date with respect to education it drove home the idea that we may need to change our work focus at least 8 times in a career - and that number may be rising! In other words, the "career" you think you have - isn't "a" career. It's multiple careers. Each one requiring a different learning curve.
I like to think graphically so here's what the "old way" would look like...starting with day one after college through retirement. You learn the job, get promoted, reach your level of incompetency and then start to loose touch with the business world and retire.
However, with the rapid changes in technology, faster business changes and information obsolescence, people need to change careers more often. Also the Gen X/Y folks seem to follow their personal interests more often - which change over time. Therefore, it isn't a single long up-hill trip. It's many, short, up-hill trips.
The new learning curve would look like this...
Knowing that the future is now a series of new adventures - versus one long one, has implications on the type, duration and direction of the incentive and recognition programs offered to employees.
For the vast majority of employees in the future - shorter term programs will be more effective simply because their time horizon is shorter. The program direction must also take into account what was important yesterday - won't be important tomorrow.
Impact on Compensation Plans
I believe this is another yet another reason a well crafted performance strategy can give companies a strategic advantage. Having the ability to change and react as the marketplace does - without having to substantially alter a company's compensation system allows a company to redirect their entire organization quickly and easily.
In the past - a compensation system may have been effective for years - and was able to adequately focus behaviors since the requirements were fairly static. Now changes occur so quickly it would be impossible to change the compensation system to keep up with the changes in jobs, roles, and focus.
It is far simpler - and more effective - to change a non-cash program than to overhaul someone's compensation.