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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 in the same extend that this development will substantially reshape all aspects of our live – 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 Swedish companies continues our research on ageing workforce in Europe focusing on how companies tackle with 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 of Europe’s five biggest economies (EU Big 5: France, Germany, Italy, Spain, and United Kingdom), and expanded to companies from actually 11 European countries.
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 Swedish companies is part of our actual survey on Scandinavian countries also enclosing Denmark 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, Swedish firms achieve a Demographic Fitness Index (DFX) of 196 points. This puts Swedish firms in a front runner position in comparison with both the other two northern countries and the remaining European countries. Compared to other EU countries, this is a remarkable result. These high scores compared to other European countries indicate that Swedish companies are more aware of future demographic trends and their consequences compared to all other European countries. However, the figures below 200 out of possible 400 also indicate that they are also far away from being excellent’, and significant improvement is possible – and needed.
While Swedish firms are starting to recognize demographic change as a big challenge (31 %), globalization (36 %) and technological change (39%) are still seen as more important. Most companies have not fully analysed the age structure of their employee, and still see personnel planning as a short-term event and plan their staff barely one year ahead. Our previous results show that although firms increasingly need to attract, develop and retain workers, most are not prepared across five key areas of lifelong learning, career management, healthcare, knowledge management, and age diversity management. But how does Sweden perform in these areas? In sum, Swedish companies are more aware of the needs to actively manage their workforce in these fields:
- Swedish companies are more aware of the relevance of career management than firms in other European countries. But companies could benefit from these supportive measures even more if they better met employees' needs.
- Swedish companies have better recognised the necessity of customising schemes in the field of ‘lifelong learning’, and can already present positive results, especially in the industrial sector.
- Swedish companies are also aware of the necessity for the need of knowledge management. However, they rarely analyse and document the parameters of knowledge management completely. A more serious implementation of an already accepted necessity is needed.
- Swedish companies tackle the issue of health management on an above average level. A high awareness of companies‘ responsibility in preserving the heath status of their employee is already given.
- Swedish companies are also leaders in the application of age diversity management. These measures are not restricted to ‘formal’ issues such as treating all age groups equally and other anti-discrimination rules, where Sweden already has a leading role on the legal side. Also programmes to promote a corporate culture of mutual esteem and value creation are well-developed.
In the light of the high probability of a strong economic meltdown 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 cycle. 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. In this, shortages of workforce are even more likely than it is today. In addition to demographic awareness, HR leaders were asked about their actual capability to fill their vacancies, and their experience with older workers. Swedish companies experience substantial skill shortages: 32 % of the companies complain about a shortage of technological knowledge, and thus face a higher share than Denmark (29 %) and Norway (30 %), and only a slightly lower share compared to the one reported by EU Big 5 companies, and a substantially higher share than for example Dutch companies (23 %). It is particularly large commercial enterprises that lack sufficient technically qualified staff.
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