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The UK’s Maturing Workforce & Succession Planning

Did you know that by 2025 there will be a projected 13+ million job vacancies but only 7 million people will leave school or college over the same period!

The UK Labour market is undergoing significant demographic shift and recruiters need to be ready to help organisations respond to it. With only 1 in 5 employers currently discussing age in the workplace, nearly a quarter admit to being unprepared for the change. With a third of the workforce now being over 50 and labour market participation for the 50-64 having increased in the last 15 years, there is a still a sharp decrease at the age of 55 and beyond and that is ominous for the supply model.

The squeeze on skills and experience at the top of this demographic, is compounded by the fact that there is fewer school/university leavers coming along to replace those people leaving the workforce. And while human resources make it their business to understand these challenges in shifting demographics, they are also very dependent upon senior leadership taking responsibility but that can be a big part of the challenge.

Making The Case

Most companies report that they do not have a process for assessing the impact of these changes in the workforce demographic beyond the next one to two years. A good place to start is by putting together a good business case to introduce your senior leadership to the perceived problem and the recommended solution. Look at the risk and also the opportunities and provide clear costs and a timeframe.

The Supply Model

Assess your own ‘Supply Model to understand your own supply of labour and skills and consider your projected future needs to meet business objectives. Include projections of attrition due to resignations, retirements, internal transfers and promotions etc.

The Demand Model

Analyse your own ‘Demand Model’ by looking at future business plans and objectives and then use that to project the organisation’s future workforce composition. Take into consideration new areas of business, new products and services, and market conditions, such as competition and new markets.

Compare your ‘Labour Supply’ and ‘Projected Demand’ to draw out potential skills shortages to produce your own gap analysis.

Going Long

Only a small percentage of HR professionals report that they have projected workforce planning beyond three years, whereas in the case of an ageing workforce this is very beneficial.

When you are considering the impacts and opportunities of the ageing workforce, include the following…

  • How many people reaching retirement age within this cohort?
  • What skills might become in short supply?
  • Will it be difficult to rebuild tacit knowledge?
  • What is the potential risk to business?

Retaining the ageing worksforce

Older workers are traditionally considered to have a good work ethic with a wide range of experience and skills however there is still negative stereotypes that might create some head wind when pushing a corporate strategy. Mature workers report the most important thing to them as they get older, are working conditions. Flexibility and better ‘health and wellbeing’ programs. However, there are many other areas that can be addressed to entice mature workers to stay or come back into the workforce. Redesigning work to match capabilities, training managers and supervisors on how to work with a diverse and inclusive age range and make it an age positive culture, for example.

Planning for succession

Many companies are planning for succession, but few are developing process to capture institutionalised and tacit knowledge of mature workers. Knowledge retention is complex and its understanding its true value might be one the last unexplored frontiers.

Outside help

When you consider contingent staffing and outsourcing, remember to partner with recruiters that understand and want to help address this modern challenge to the workforce. At TotalTen we are proactively looking at how we can be well prepared and able to help you!

Unless robots quickly start to live up to the hype, we are facing a recruitment black hole of 6-7 million within the UK labour market.