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This White Paper continues and deepens our October 2006 study on workforce ageing in Europe, which examined companies’ degree of readiness to tackle such change. We originally surveyed firms in the five biggest European economies (Germany, United Kingdom, France, Italy and Spain). In this edition we extend our practical research to three new countries: Belgium and The Netherlands, as well as Switzerland (in a separate report) and thus have unique data now on 4,000 European companies of all sizes and across all business sectors. Any insights and lessons we can draw are relevant to a huge universe of business in Europe and, indeed, to any other economies that are willing to learn from Europe’s experience. For all European countries, long term demographic change is a powerful and irrepressible force. Population and workforce ageing will be spectacular and will reshape our continent, communities, lives, attitudes, businesses, workplaces, health and education systems in ways that we are only beginning to grasp. We show here that demographic trends in Belgium and The Netherlands are broadly similar in direction and implication to those for the countries already examined.
As with the first study, we do not aim to make value judgments about workforce ageing. Rather we highlight the implications for the workplace, underline that demographic trends will compound existing talent and skills shortages and, not least, encourage forward-looking European firms to take sensible, concrete steps that will help them to compete, innovate and produce in an ever-tougher global business environment. Our demographic fitness indicator (DFX) measures firms’ readiness for the onset of an aging workforce in Europe. We score firms on an index of 100 to 400 points and also calculate overall country indices. Companies from the 8 European countries we surveyed average 182 index points (from 400) and over two-thirds scored 200 points or less. The addition of 60% more Belgian, Dutch and Swiss companies to our European data set thus closely confirms the conclusions from our first five countries. Europe is far behind where it should be in absolute terms, given the onset and scale of workforce ageing, and the vast majority of our firms have great opportunities to improve their readiness.
We also compare results between countries, since this can yield some useful lessons and insights for everyone. Belgium does well in comparative terms, scoring above average for our Europe-8 and above the average of just the EU big-5 countries.
Belgian companies on average score marginally less than those in the leading country (the UK) and measurably ahead of the trailing countries in our survey – with the caveat that Europe as a whole is nowhere near where it should be. The Netherlands is similar overall to Germany, midfield between leading and laggard countries and just slightly below European average – though it has less “star” firms than Germany. As with the first group of countries, the overall conclusions for Europe are that:
- Health management is ripe for improvement. Few firms go beyond the basic compulsory programs (like check ups), to offer longerterm health tools like stress reduction, lifestyle and dietary advice.
- Although European firms often have basic knowledge management tools in place, and understand the technical expertise needed in the workplace, surprisingly most do not know who their experts are (i.e. who has expertise in what).
- While an overwhelming majority of firms respect the legal requirements on age diversity, and formally treat all age groups equally, most do little to promote a dynamic culture of mutual esteem, mentorship and skill transfers.
- Firms offer an insufficient range of career management tools and few employees make use even of those available, especially workers aged over 45.
- While companies offer continuous education tools and around half of employees use these, it tends to be standard workplace based training aimed at qualifications (this lacks appeal for older workers) and not individual programs or softer skills.
We point out that demographic fitness is not rocket science. All the measures and tools across the five areas are within reach for most companies – regardless of size, sector or focus – as long as they have the will to adopt them, the discipline to prioritize around a few areas, and the drive to take small yet decisive steps to ensure progress. The pay off from action can be substantial. Better DFX scores could add significantly to a firm’s competitiveness, innovation and productivity; hence paying attention to the issues could translate directly into business success. The Institute will aim to publish its DFX index periodically, thus giving firms and policymakers a tool to measure European progress on demographic fitness.
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