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The UK Demographic Fitness Survey 2007 is the second annual survey on the topic of demographic change in the workforce and its consequences for companies in the United Kingdom. The issue of population ageing is real. Over the next 50 years, every country will experience a drop in the share of people of prime working age and an increase in the number of people aged 65+. In just ten years, people over 40 will be in the majority across Europe for the first time. The total number of 50-65 year olds in the five biggest EU economies, representing two thirds of regional GDP, will rise by 16% and those in their 20s to 40s will decline by nearly 10%.1 By 2025, people over 40 will comprise 53% of the population of the UK.2 Almost 1 in 5 will be 65+.
The ageing of the population and workforce will have a major impact on our lives, the business world, our jobs, the pension and health systems as well as the education system. Early results indicate that when the proportion of older people in the population shifts dramatically, companies will be unprepared for the workforce impact.
The Demographic Fitness Survey measures firms’ preparedness for the changing demographic in the workforce across five dimensions: career management, lifelong learning, knowledge management, health management and age diversity management. Based on responses to a survey of 502 companies in the UK, we have compiled a Demographic Fitness Index (DFX) indicating how well prepared UK companies are to tackle the issue of demographic change. While the UK shares with Germany the highest score in the DFX across Europe, both scored just 186 out of a possible 400 total points in demographic fitness. Moreover, the UK score declined from 189 points a year ago. These scores indicate that companies must increase their awareness of the changing demographics in the workforce – or risk being caught unprepared when waves of retirements deprive companies of potentially critical knowledge and talent. Human resources, the most valuable and least fungible of business resources, are being drained by the very process that once renewed the workforce – timely retirements. Decades of decreased births in developed economies have reduced the number of young workers entering the workforce, and increased longevity is swelling the ranks of the ageing population. This shift in workforce demographics will force companies to review traditional practices, and actively work to retain and hire ageing workers. The DFX provides a quantitative measure of preparedness for this change.
1 ILO
2 US Census Bureau's International Database; http://www.census.gov/ipc/www/idb/tables.html
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