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February 6, 2008 - Richard Donkin
Some years ago I became a life member of a charity that looks after journalists in their old age. None of us, I suspect, likes to think about future infirmity, but it's comforting to know there is some kind of safety net in place for our later years.
Now I'm informed that life membership has been cancelled. The problem is that there are too few younger members to look after the growing number of dependents passing in to old age. The charity, like many businesses, has been forced to face up to demographic realities.
I, and others like me, belong to the immediate post Second World War baby bulge. Life has been good for many of us. We lived through a period of growing prosperity as Europe emerged from those dark years of war that scarred the lives of our parents and grandparents.
Some today are close to retirement. Some are in their prime, running companies or working as hard as ever. A few may be planning to work longer for fear that their pensions are underfunded. Others simply want to work longer because they know they are well enough and fit enough to do so.
For these people, retirement is becoming an increasingly meaningless concept. I, for one, hope to work in some capacity for the rest of my life; but there are strings attached to this sentiment: in my later years I want more choice about the way that I work. I want to work differently.
Fitness, health, pensions, quality of life, a desire to remain useful, to extend earnings capacity, even to learn new skills: these are the kind of personal issues behind the demographic debate that has become one of the most pressing concerns for business and policy makers as we move towards the second decade of the 21st century.
The good news from Adecco Institute's latest demographic survey*, based on more than 2,500 interviews across five European countries, is that more and more companies are beginning to understand that demographics is a business issue that can no longer be ignored.
Perhaps the most telling findings from the survey are that increasing numbers of companies are employing older workers. The short-term attitudes that led to clear-outs of older employees during the 1990s have been replaced by a need to tackle growing skill shortages and to find new ways of attracting experienced employees.
In the previous year some 11 per cent of the large European companies surveyed were planning to recruit older workers. In the latest survey that proportion has risen to 16 per cent, a significant increase, year on year.
But there is evidence that companies have not yet fully digested the lessons they must learn from demographic change. Too many, I fear, are expecting staffing shortfalls to be plugged by a better educated younger generation.
Nearly 70 per cent of all those surveyed regarded improved education and better transitions from school to work as one of the best ways of filling the growing skills gap.
I agree that this can go some way towards tackling the problem. But if the trends in the rest of Europe are mirroring those in the UK, improved transitions and education levels will not be sufficient to fill the broadening skills gap. Employers should not be placing their faith in education systems alone.
As a matter of urgency they should be looking at bolstering their workforces through the reengagement of older workers and of women. Far too many women are lost to the workplace through inflexible employment systems that do not provide sufficient options for varying hours in a way that allows them to raise a family while continuing their careers.
In the past three or four years many employers have sought to fill their skills gaps with migrant workers, particularly from central Europe. This too should be considered as no more than a short-term remedy. As central European economies improve, offering higher levels of earnings, so the skills drain from companies such as Poland and the Czech Republic will be reversed.
Long-term employment policies for the next 20 years must be looking at providing balanced workplaces, more representative of the demographic spread across the wider population, and offering a diversity of working arrangements, running from part-time and contract work to full-time working.
Neglecting the potential of those in the 50-70 age range would be a big mistake. People of 50 are perfectly capable of embarking on a new career should they choose to do so, but employers will need to learn new management skills and adopt more flexible recruiting and training approaches - including the career management tools discussed in the Adecco report - if they are to take advantage of this neglected labour source.
Helping employees to manage their careers in a way that suits their changing needs throughout their working lives will increase loyalty and reduce staff turnover. As the Adecco report suggested, what is really needed is nothing less than a change in corporate cultures and management attitudes across Europe. The winners will be those businesses that pursue such change. The future for those who do not is one of ever more stifling competition for skills in a dwindling traditional labour pool.
*Adecco Institute White Paper, January 2008 – Facing Europe's Demographic Challenge: The Demographic Fitness Survey 2007.
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