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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 Norwegian 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 Norwegian companies is part of our current 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 key areas of career management, lifelong learning, knowledge management, health management and diversity management.
On average, Norwegian companies achieve a Demographic Fitness Index (DFX) of 194 points out of a possible score of 400 in the 2008 Demographic Fitness Survey and are therefore only slightly behind the European leader Sweden (196) on rank 2. In a regional comparison the Scandinavian countries also take a leading position with a score of 191 compared to the EU Big 5 (182) and the other three, smaller European countries Belgium, Netherlands and Switzerland (179). Our previous results show that although firms increasingly need to attract, develop and retain workers, most are not prepared in the five key areas. But how does Norway perform in these areas? In sum, Norwegian companies
- are above the European average in the application of career management tools. However, sustainable tools like work life plans and external career consulting are not that well developed and ask for an improvement.
- have recognised the necessity of lifelong learning, and can already show positive results. This is specifically true for individual development of qualifications. However, there is still a strong need for improvement in capturing the real needs of the employees.
- are aware of the importance of a systematic knowledge management. Compared with their neighbours they have a leading position in documenting the existing structures of business-critical knowledge. However, improvement is needed related to the acceptance among employees.
- implement health management tools on an above-average level. Furthermore here the acceptance among employees is high. Improvement is recommended especially in the trade sector.
- achieve very good results in diversity management. Furthermore these measures are not restricted to formal issues of equal treatment among age groups.
In sum the Norwegian companies perform well compared to all other European countries, on a similarly high level like their Swedish neighbours. Norwegian companies seem to be ‘fitter‘ to tackle future needs caused by the demographic challenge. However, there is room for improvement. The topic of skill shortages is of above-average relevance for Norway. Current labour market conditions already require for a high standard in HR management. The question has to be asked in which respect the good performance is rooted in a generally higher awareness, or is already a reaction to the current situation on the Norwegian labor market. 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.
Therefore, although given the high demographic fitness in Norway, we strongly recommend to improve this degree of preparatory activity. Especially in the light of the high probability of an economic downturn in the next year, we underline that 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 long-term 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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