#117 – Ageing Workforce & Discipline

Good morning everyone,

Hope you’re having a great week!

Let’s jump in.

read online on my website 

read time 3 minutes 

#117 at a Glance:

• Quote: The importance of play.

• Podcast: Chris Williamson x Rory Sutherland.

• Article: Why discipline is declining fast among young professionals.

• Interesting Phenomenon: America’s workforce is getting older.

• Tweet: What a great boss looks like.

Quote I’ve been thinking about:

Podcast I listened to:

Modern Wisdom #973 - Rory Sutherland

Rory Sutherland is one of the world’s leading consumer behaviour experts, the Vice Chairman of Ogilvy Advertising, and an author.

Really loved Rory’s insights on what he would do to improve airport experiences, how restauranteurs strategically seek to one-up each other, and changes that should be made to food delivery services.

Conversations between Chris and Rory are always awesome — this one was no exception.

I find they always open my mind to the waves of thinking that are underpinning trends and behaviours going on around the world.

Listen on Spotify, Apple Podcasts, or YouTube.

[Duration: 1 hour 53 minutes]

Article I read:

Why Discipline is Declining Fast Among Young Professionals

Really thought-provoking article in the Australian Financial Review on why discipline is increasingly lacking among Gen Z in the workplace.

John Burn-Murdoch connects the infinite rise in online distractions to a fall in conscientiousness (the quality of being dependable and disciplined).

“Some studies suggest the advantage of conscientiousness is growing over time, and it’s easy to imagine why. When contemporary daily life is full of temptations — from always-on mobile internet and the lures of social media and online gambling, to hyper-palatable foods — the ability to ignore it all and put long-term wellbeing ahead of short-term kicks becomes a superpower.

Generative artificial intelligence could supercharge this dynamic. An industrious student who is not deterred by a challenge might use a large language model as a personal tutor to strengthen their knowledge of a concept; their less conscientious counterpart might task the same LLM with writing their essay, foregoing knowledge acquisition altogether.”

This would mean that the decision to either employ AI as an assistant working alongside you or merely as an outsourced employee to complete all of your tasks is one that speaks fundamentally to one’s conscientiousness at a given point in time and, importantly, their conscientiousness well into the future.

Fascinating stuff and critical for us all to contemplate.

You can check out the full article here.

(h/t – thanks for sharing, Mary!)

Interesting Phenomenon I’ve been thinking about:

America's Workforce is Getting Older, and Staying Longer

Some interesting statistics courtesy of Monday.com’s newsletter the other week:

“The fastest-growing segment of America's workforce isn't millennials or Gen Z, but workers over 75, whose numbers have tripled since 1987 and now represent 7% of the labor force. This silver surge stems from increased life expectancy, delayed Social Security benefits that now require workers to wait until 67 for full benefits, and economic necessity. Labor experts point to a fundamental shift in retirement expectations, with the average anticipated retirement age jumping from 60 in the 1990s to 66 today, while 41% of American workers now expect to work beyond 65.

The Bureau of Labor Statistics projects that workers aged 75 and older will grow by nearly 97% over the next decade. As traditional retirement models crumble under inadequate savings, with nearly half of Americans aged 55-66 having no personal retirement funds, the extended working years reflect both opportunity and necessity in modern career planning.”

Q: What happens with an ageing population?

A: Longer retirement? Work More and Work Longer

I’ve been thinking about how this dynamic will pan out back here in Aus, particularly with regards to superannuation…

Our superannuation system is truly the envy of the world. The gold-standard in retirement asset allocation.

It reduces the burden on the government to care for the elderly by privatising additional contributions to an employee’s retirement savings during their working years, and does so in a way that avoids negative disruption to the functionating of markets or international competitiveness.

Brilliant.

But here’s the thing: when compulsory superannuation was first introduced on 1 July 1992, it operated under three very important conditions:

1. The superannuation contribution rate was 3% of people’s salaries

2. The retirement age was 65

3. The life expectancy of men and women in Australia at that time was 74.5 and 80.4 respectively.

That meant that Aussies essentially each had $X stashed away to fund the final 10-15 years of their life (on average).

Fast forward over 30 years and today:

1. Superannuation contributions have increased to 12% in-line with inflation

2. The retirement age is 67

3. However, the life expectancy of men and women has increased to 81.1 and 85.1 respectively

Now, Aussies each have $X stashed away to fund the final 14-18 years of their life (again, on average).

So, where does this leave us?

In real terms, we have the same amount of superannuation being contributed by employers with a greater time period for which that money is relied upon by retired Aussies.

Put simply, the elderly have the same amount of inflation-adjusted superannuation money to live off post-retirement compared to the 1990s but are living longer than ever before.

This inevitably leads to a reduction in the quality of life in one’s senior years and/or a greater burden on the government to intervene with welfare payments.

As far as I can tell, there are two potential solutions within the current framework:

1. Increase the superannuation rate (very unlikely given it just increased from 11 to 12% and beyond that, it will become not only too onerous on employers, but purely uneconomical).

2. Increase the preservation and retirement ages, requiring individuals to increasingly work later into their lives (the most likely outcome).

And this dynamic is only likely to exacerbate in the course of our lifetime as anti-ageing technological advancement far outpaces superannuation contributions and effective government intervention.

So, what’s the lesson to take away from all of this?

It’s never been more important to find something you enjoy doing with people you enjoy doing it with, and take the view that you get to do it for the rest of your life.

“To retire is to expire.” – Donald Trump

Tweet I liked:

What a Great Boss Looks Like

Thanks for reading! Grateful for your support.

Stay hungry, stay humble, stay curious. ⚡

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See you in the next one,

Dimi

(P.S. the best ways to get in touch with me are via email or LinkedIn).