Inside Ageing workforce

Britain’s skills shortage will get worse Alistair Cox

There are a number of challenges facing the UK and its economy, among them the uncertainty created by Brexit, poor productivity and rising inflation. However, on top of this there is another issue affecting the business landscape and one I don’t think we’re talking about nearly enough. It is the UK’S ageing workforce.

The statistics underpinning this issue are plain to see. ONS data showed birth rates were at their lowest level in a decade in 2017, while life expectancy for men and women is near an all-time high. To put this all into perspective, about a third of the UK’S workforce is over the age of 50, roughly equivalent to 10million people. This group – many of whom are highly skilled professionals – is quickly approaching retirement, which will only exacerbate an already acute skills shortage across many industries. Pension schemes are increasingly being rendered unsustainable as additional funds need to be put away each year to manage future liabilities and as retirements become longer.

As the pool of available workers ages and potentially begins to shrink, businesses will need to ensure they retain the key talent and skills already within their organisations. One of the easiest solutions is to help keep older employees working for longer.

Some of this will happen naturally. Statistically, life expectancy increases by two to three years every decade, so younger sections of the workforce will be expected to work considerably longer in the future when compared with their older counterparts today. The prospect of people living much longer also calls into the question the usefulness of an official retirement or pension age and whether it is a thing of the past – policymakers may have to examine this in much closer detail.

UK businesses need to do more to upskill employees and future-proof them against not only longer careers, but also the coming technological and organisational changes. AI, machine learning and robotics are rapidly changing almost every job, from the factory floor to the boardroom. This means the modern worker is set to go through more changes in their working life than at any other time, making adaptability of paramount importance. So it is up to businesses and policymakers to pre-empt these changes and ensure the workplace of tomorrow is suitably prepared in order to minimise any adverse impact on businesses and the economy.

Interestingly, today’s workforce is made up of five generations. This provides a unique opportunity for businesses to facilitate the efficient transfer of knowledge from older, more experienced workers to their junior colleagues. Effective succession planning is key to this, as well as the promotion of two-way mentoring programmes, whereby younger staff are provided with tutelage from senior colleagues in return for support in understanding and using new technologies, for example. This ensures no one is left behind as the workplace becomes increasingly digitalised and complex.

Without urgent change, the demographical analysis indicates today’s skills shortage will only become worse as time progresses. Having finished university at the start of the summer, a fresh UK graduate entering the world of work this month is expected to live on average until 100. While this represents a long time, the economic impact of this trend is set to be felt much sooner.

I am pleased by some of the change afoot across several industries in terms of employment practices and training and development initiatives. However, this needs to be supplemented with a robust strategy to help our ageing workforce, one that is coordinated between business and governments, and not adopted in economic isolation.

To help foster skills among the workforce, businesses – supported by government policy – need to devote greater time and investment to training and reskilling, while modernising working practices to account for flexible working, career breaks and parenting. The businesses of today need a clear strategy in place for supporting and managing the ageing workforce of tomorrow.

‘Businesses need to do more to upskill employees and futureproof them’