Designing Your Future: Life Planning and its Application to Human Resource Management.

Introduction

We can all recognize the difference between people who plan and people who don’t. Retirement seminars are a great place to see the effect of good and bad planning. Some participants have been saving money over many years, have wills and Powers of Attorney in place, have balance between their work and personal lives and approach retirement well equipped and confident. Research shows that these individuals will handle the transition with considerable ease.

Then there are participants who realize in their early fifties that saving for the future could have made an amazing difference to the timing of their retirement and their options in retirement. Some of these individuals are workaholics, with few outside interests. They often have no idea what they will do when they retire. Many of these individuals approach retirement feeling anxious, insecure and stressed. In fact, research studies confirm that many of these individuals will experience a stressful transition. And some never adjust.

Oh, what a difference a little planning might have made! This article explores the emergence of a new discipline, life planning, and its relevance to the human resource professional. It identifies concrete action that can be taken to build it into human resource policies and programs.

Life Planning: What is it?

Life planning begins with vision. Most individuals do have a vision of what their ideal life would look like. This vision normally embraces some combination of happiness, good health and financial security. However, faced with the challenge of trying to balance work and family and life in general, many individuals just manage to survive day to day, devoting very little time to planning . These people often give a low priority to action that would contribute to the achievement of their vision, such as maintaining good health, saving for the future, or investing time on those activities of greatest personal meaning to them.

Life Planning: What are its origins?

There have always been professionals who assist individuals with planning but these professionals have often worked with only one aspect of the person’s life, like the financial planner who helps manage a person’s portfolio or the career planner who helps a person plan their career. This new discipline, life planning, is different; it encourages the holistic approach to planning. It has its origins in five separate and distinct fields: career planning, coaching, financial planning, life course development, and retirement planning.

Career Planning

Experienced human resource professionals will be familiar with this field. The career planning profession has contributed a great deal to our knowledge of the value of planning. Traditionally, career planners have worked with individuals specifically on their careers and work lives. However, according to the Executive Director of the Canadian Career Development Foundation, in recent years, the career planning profession has embraced a more holistic approach and the phrase work/life planning now appears in many career-related publications.

Coaching

Well launched in the United States, and growing by leaps and bounds in Canada, personal coaching is another field that is contributing to the concept of life planning. Coaches help individuals to establish a vision of the future, to identify action plans and to implement them. Although counsellors have been available through Employee Assistance Programs or accessed privately, these professionals have tended to provide service to those with pathological problems or major life problems such as alcoholism or abuse. Coaches have brought life planning into reach of the average person.

Financial Planning

In 2000, a group of progressive financial planners met in the U.S. to discuss the concept of “financial life planning”. The individuals who attended agreed that it was important for financial planners to address more than financial issues in helping clients manage their money. The group acknowledged that the financial planner has an obligation to know about the client’s overall life. Mitch Anthony, who wrote Your Clients for Life, said, “You don’t start with the financial plan and then work the life plan into it. You start with the life plan and then build the financial plan to accommodate.... that life plan.” This is a radical development in the world of financial planning. This shift in thinking is expected to have a major impact on the delivery of financial planning services in the future.

Life Course Development

This widely diverse area of academic study examines how individuals mature and develop over the course of their lives and has made major contributions to our understanding of life transitions. Planning, of course, features front and centre when it comes to managing transitions well. A good deal of the research done in this field sheds light on how people manage life transitions, contributes to our understanding of the importance of planning, identifies the benefits when people take charge of their lives and documents the outcome if people do not.

Retirement Planning

The Canadian Association of Pre-retirement Planners is a national professional organization comprised of members from a wide array of disciplines; the members are dedicated to the concept of holistic retirement planning. Some members have begun using the term life planning in place of retirement planning since planning for the future can never start too early. Whether the member is a financial planner, or a coach or a pension benefits manager, all acknowledge that the earlier an individual develops a vision, learns good planning skills and takes action, the better.

Different professions, different perspectives, different knowledge bases, different products, different services—but all five fields are contributing to our growing understanding of the importance of life planning.

Why Now?

There are four key trends affecting modern workers that suggest it is time for human resource professionals to understand and fully embrace the concept of life planning. These are:

• The high level of change and uncertainty that has become a constant in organizations, accompanied by the implicit message from employers that employees are on their own.
• The movement away from defined benefit and defined contribution pension plans, along with the introduction of flexible benefits that allow employees to opt in or out of pension plans and health programs
• The increasing life span of the average Canadian, and
• The message from governments in recent years that Canadians must take more responsibility for their own futures, particularly in relation to such issues as health care and home care, among others.

If employees are to do a good job of planning their own future, whether it be related to career, personal life, retirement or health, organizations need to provide them with the knowledge, the skills and the tools to enhance their ability to take charge of their own lives. With the right kind of organizational support, employees are more likely to feel equipped to deal with the changes and transitions that are inevitable in today’s business environment.

The Role of Human Resource Professionals

This is where the human resource profession comes in. Human resource professionals are uniquely situated to promote the life planning approach within organizations. They can be the agent who assists management in moving away from the more traditional, paternalistic approaches that involved organizations doing things FOR employees and in adopting strategies that help employees to do things for themselves. Many of the concrete actions that can introduce and develop life planning skills in employees fall within the purview of the human resource professional, be it training, pensions and benefits, or career planning.

So What Can Be Done?

Many organizations have taken on this challenge already, and those with a young workforce or with a progressive management approach may have already adopted a number of measures to help employees take charge of their own lives. But most organizations could do a lot more. What can human resource professionals do to see that a life planning approach is fully adopted within their organization? A good first step would be to review existing human resource policies and programs through a life planning lens. Do existing policies and programs encourage independence, self-awareness and planning? Are there some products and services already available to employees that enhance planning behaviour? Is good planning behaviour rewarded? Could existing programs be adapted to encourage more planning behaviour?

Should the outcome of this review identify the need for action, here are some suggestions:

1. Encouragement & Support: Many modern organizations are sending the “take-charge-of-your-own-life” message to their employees either implicitly or explicitly. Allowing employees to choose the benefits they want or to choose from an array of work arrangements are two areas which reflect this principle. One very important action that employers can take is to develop communication strategies that link this principle to specific things the organization is prepared to do to support employees as they take charge.
2. Knowledge: For good planning to occur, individuals need information. For example, if employees can opt into or out of the “pension” plan, do they understand fully the impact of choosing to opt out? How much knowledge do they have of financial planning? What is the organization doing to ensure that employees have good information at their fingertips prior to making such an important decision? Before such decisions are taken, it is critical for the individual to understand the overall context within which the decision is being made. Providing seminars, workshops and material related to overall financial planning is one specific way to educate employees so that they make well-informed decisions.
3. Skills: There are individuals who, because of their personality, naturally engage in planning behaviour. These are the exception. Others have to learn planning skills and the organization can be of great assistance in seeing that these skills are developed. Training in assertiveness, self-awareness, vision identification, and planning techniques, just to name a few, would enhance the planning behaviour of most employees.
4. Tools: To support the planning behaviour of employees, it is important to provide tools that can help employees plan better. For example, the Canadian Medical Association offers employers a Health and Wellness Companion. It is designed to encourage employees to take responsibility for maintaining good health. It includes a disease database, health calculators, and other useful health information. On the retirement front, York University not only offers its employees access to a Pension Estimator so that they can play with different retirement scenarios, it has a Retirement Centre that offers York employees a program of courses and individual counselling. LifeScape, the retirement planning web tool developed by the Conroy Group Inc., currently in use at Canadian Pacific Railway and CUPE, is just one more example of a tool that promotes life planning and provides employees with information and interactive tools to help them design their own future.
5. General
   Another general suggestion is that human resource professionals should ensure that those who are identified to deliver the knowledge, skills and tools to employees should have demonstrated themselves a commitment to the holistic approach to planning. For example, if a financial planner is delivering a seminar on how to develop a good financial plan, then he or she should have a commitment to the concept of life planning overall and some knowledge of the holistic approach.

Conclusion

Employees who engage in planning behaviour will be much better equipped to make good life choices whether that involves changing jobs, opting out of work or planning their retirement. They will be able to adjust to transitions such as reorganizations and layoffs with greater confidence and ease. Organizations who make a commitment to life planning will reap the benefits of a more confident, self-aware and motivated workforce.

Nancy Conroy, President of The Conroy Group Inc. and Creator of LifeScape, is a Professional Retirement Planner. She can be contacted at nlc@theconroygroup.com or at 729-2796. Feedback is welcomed.