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The Demographic Fitness Survey is an annual study conducted by the Adecco Institute to evaluate how companies are preparing for the impact of demographic changes in the population. Interviews were conducted with Human Resources decision makers in 500 Italian companies to discern their practices in the areas of Career Management, Lifelong Learning, Knowledge Management, Health Management and Diversity Management. Our demographic fitness index (DFX) assigns each firm a score, on an index of 100-400 points, based on their performance in each of these areas. From specific company scores, we derive a country-wide score. Italian firms scored 182 points out of a possible score of 400 in the 2007 Demographic Fitness Survey, indicating that they have significant work to do to increase their ability to attract and retain workers in an era characterised by a shrinking pool of young people entering the workforce, and a growing pool of older workers. In this white paper, we present a detailed analysis of the Italian survey results. In general, the results indicate that the challenges associated with demographic change remain largely unaddressed in Italian companies, despite the growing difficulties Italian firms are experiencing in finding qualified talent to fill job openings. 25% of companies report having difficulty finding people with the right qualifications and the same amount are having difficulty finding the number of people they want to hire. Large companies and service-based companies are taking initial steps to assess the specific impact on their firms of population ageing: 38% of large companies and 42% of service companies have conducted a complete analysis of the overall age structure of their workforce. 34% of large companies (up from 19% a year ago) and 35% of service companies (up from 23% a year ago) have conducted this analysis down to the department level. These results indicate that these companies are taking the threat of ageing seriously – and the follow through activity down to the department level indicates that the overall analysis is indicating that the threat is real.
We would typically expect this increased awareness to result in increased planning horizons, which has not materialized. Italian companies in general plan just nine months ahead for their staffing needs – hardly enough to replace highly qualified and experienced resources who are leaving the workforce at an increasingly rapid rate. Only service companies are responding – they have increased their planning horizons for Professionals and Executives to 14.4 months, up from 11 months a year ago.
The issue of population ageing is real. In less than ten years’ time, people over 40 will, for the first time in history, form the demographic majority in Europe. In Italy, people over 35 will comprise 65% of the population in 2010.1 More people are leaving the workforce than entering it. In order to combat the impact of a shrinking workforce, companies must proactively address the issue of workforce retention. Every employee who leaves a firm, at any stage of their career, drains much needed expertise from the firm. Proactive companies will recognize this threat and act today to put policies and practices in place to retain workers and encourage them to continue to contribute throughout their working life.
The results of the 2007 Italian DFX Survey reveal both positive and negative trends. On the positive side:
- 76% of all Italian firms are offering tools to help employees navigate a change of career path.
- 69% are offering tools to accommodate work life plans.
- 88% are conducting analyses of individual training requirements, demonstrating a heightened awareness of the value of each individual’s contribution and potential.
- 68% are maintaining standardised records of business critical knowledge. All of these are important and significant developments for companies that will be facing an increasing shortage of qualified workers.
However,
- Italy’s overall DFX score has dropped to 182, from a score of 186 in 2006, led primarily by companies in the Trade sector.
- Only 35% of companies are offering training in methodological skills, the type of training necessary to acquire new skills (vs. improving existing skills).
- Italian companies still overwhelmingly (75%) believe that they can counter skills shortages by improving school education – neglecting the reality that school leavers will comprise a shrinking portion of the workforce.
Italian companies will face significant challenges as demographic changes start to take themselves felt in the workforce – particularly in the search for qualified workers. Skills shortages already exist: 37% of employers are experiencing difficulty finding qualified technical staff, and 28% are report difficulties finding staff with relevant job-related experience. These trends are set to increase as fewer new workers enter the workforce, and more and more workers retire. Companies can prepare themselves for the oncoming demographic change by increasing their demographic fitness, and thus reaping the rewards of attracting and keeping a qualified workforce.
1 US Census Data, International Division, http://www.census.gov/cgi-bin/ipc/idbsprd
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