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Long term demographic change is a powerful and irrepressible force. In less than ten years‘ time people over 40 will, for the first time in history, form the demographic majority in all Scandinavian countries. While dramatic changes in population and substantial ageing of the workforce in the next decades are already broadly accepted empirical facts, it is not anticipated to the same extent that this development will substantially reshape all aspects of our lives – and therefore our businesses, workplaces, health and education systems, in ways that we are only beginning to grasp. Companies have to tackle these changes, and companies proactively acting are in advantage to those purely reacting. Against this backdrop this White Paper based on the Demographic Fitness Survey of Danish companies continues our research on ageing workforces in Europe, focusing on how companies tackle the changes in the age structure of the workforce. The Demographic Fitness Survey is an annual study conducted by the Adecco Institute to evaluate if and how companies are prepared for the impact of demographic changes. We started this research in 2006 by questioning firms in Europe‘s five biggest economies (EU Big 5: France, Germany, Italy, Spain, and United Kingdom), and expanded to companies from 11 European countries. The main outcome of the Demographic Fitness Survey is the Demographic Fitness Index (DFX), assigning each firm a score on an index of 100-400 points, based on their performance in five areas of HR activity, and an aggregated country-wide score. This report on Danish companies is part of our survey of Scandinavian countries including Sweden and Norway. Interviews were conducted with HR decision makers in 1,050 companies to identify their practices in the five areas of career management, lifelong learning, knowledge management, health management and diversity management.
On average, Danish firms achieve a Demographic Fitness Index (DFX) of 183 points out of a possible score of 400 in the 2008 Demographic Fitness Survey and have thus lost ground from the previous year (185 points). Denmark therefore falls significantly behind the companies in other Scandinavian states taking a midfield position within the 11 analysed countries in Europe, together with the Netherlands. They are therefore behind Germany, United Kingdom (both 186) on position 5. In a regional comparison Scandinavian countries take a leading position with an average of 192 compared to the EU Big 5 (183) and Benelux (182).
Our previous results show that although firms increasingly need to attract, develop and retain workers, most are not prepared in five key areas of lifelong learning, career management, healthcare, knowledge management, and age diversity management. But how does Denmark perform in these areas? In sum, Danish companies are less aware compared to their Scandinavian neighbours related to the needs of an active workforce management in these fields:
- Danish companies are above European average in the application of career management and nearly in line with the Scandinavian companies. However, disaggregated results show that while large companies have improved, those of medium size performed worse compared to 2007.
- Danish companies have recognised the necessity of lifelong learning, and can already present positive results, especially individual development of qualifications. However, there is a strong need of improvement in realisation and implementation. Here also slightly lower figures compared to last year can be observed.
- Danish companies are currently not aware of the importance of detailed analyses and documentation of critical business knowledge. In addition to the general low awareness the need for continuous work in this field is apparent.
- Danish companies tackle health management on a rather low level. Neither regular health checks nor other checkups have significant relevance in Danish companies. However, in activating measures like company sport facilities Danish companies perform better.
- Danish companies take only a mid-level position in age diversity management, and are lagging behind the other Scandinavian countries.
In sum, Danish companies do not show satisfactory results in their demographic fitness. Given that the Danish labour market is considered best practice in Europe, this result is a bit astonishing. However, although companies are aware of problems of skill shortages, and although there is a positive experience with older workers, the HR practice clearly goes in the other direction. This is an alarming signal. Strategic HR management is not merely a nice-to-have asset for good economic times. In the light of long-term developments in demography towards an older workforce, this is even more important when times are getting harder. Danish firms are obviously not ‘fitter‘ to tackle the future needs of the demographic challenge than the European average. They clearly lag behind the performance of the other two Scandinavian countries in our survey – Sweden and Norway. Especially in the light of the high probability of a economic downturn in the next year, we underline that the given activities have to be retained and even extended independent of cyclical changes. Demographic change and its challenges are not topics related to business cycles. These are longterm strategic investments for the companies. Only companies that keep this in mind and retain their activities will be prepared for the next upturn.
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