By 2022 there will be 700,000 fewer people in the UK between the ages of 16 to 49, and 3.7 million more aged between 50 and 65. If the over 50s continue to leave the workforce at the rate they have historically then there will be serious labour and skills shortages.
Organisations need to wake up to this demographic time bomb. Research for our report The Ageing Workforce – What’s your strategy? suggests that eight out of 10 employers do not have plans to change any policy relating to ageing workforces, and aren’t making space for it on their people and business agenda. I believe those that do will create a competitive advantage.
Here are seven reasons why you should have an older workers policy in place:
1. Demand for educated talent will outstrip supply
In the next 10 years the UK will have a skills shortfall. More than 13.5 million job vacancies will need to be filled, but there will only be seven million school and college leavers in this period, and immigration will not fill the gap (according to CIPD research).
2. The ageing population wants to work longer
Sixty per cent of our survey respondents said they don’t want to retire. To enable older workers to be effective contributors for longer, organisations need to understand what motivates and engages people at this stage of their careers.
3. Older people have the right to work longer
Employees now have the right to continue working past statutory retirement age. Business managers must be aware of this when developing their business and investment strategies.
4. Older workers are the main untapped source of talent
There has been a steady increase in the number of older workers continuing to work and it’s a trend that’s expected to continue. We have up to 28% of men and 42% of women aged 50 to 64 in the UK that could work. This represents a sizeable hidden talent pool.
5. There are business benefits from improving your approach to the ageing workforce
These include reduced turnover, an increase in profits, and better customer service. Some companies have already benefited from employing older workers. Nationwide and B&Q are familiar examples. Toyota aggressively recruits among its retiring employees to bring workers back in part-time roles. P&G has taken a slightly different approach. It works closely with organisations such as YourEncore – a company staffed with older workers that provides additional support to in-house teams.
6. Understanding generational diversity is a must
There will be five generations in the workplace when Generation Z starts work (the oldest of Gen Z are now 18). As our older employees stay working longer we will experience the challenges of creating a working environment that makes the most of talent from all generations.
7. Other organisations have already recognised the issue and are doing something about it
The table below shows the main reasons why our survey respondents want to improve their approach to an ageing workforce.
We found that the organisations already putting policy into practice around this are focusing on a range of issues that impact their particular business. For example, BMW in Germany has adapted its physical work environment to help older people continue to be productive on its assembly lines.
Justine James is the founder of organisational development consultancy Talentsmoothie
A free copy of The Ageing Workforce – What’s Your Strategy?, produced in association with HR magazine, can be downloaded here