Choices for work and life; how employers are facing the challenges

April 10th, 2013

In association with Insight and Quantum I facilitated two breakfast round table events  with employers to discuss the challenges faced by the changing demographics of the workforce, how these are impacting and what action employers are taking. We have captured their thoughts and experiences below.

To put this into context

I had been reflecting on the changes to my working life and the increasing numbers of people who I talk to who are contemplating making career changes or who (like I) have taken a leap. It is perhaps no coincidence that we are all of a certain age; priorities are beginning to change and the thought of another 10 to 15 years of working life is looming. I had been thinking that this was an area that I could support people with as part of my coaching services. However we began to realise that both individuals and organisations will face a number of challenges.

There are three things that we concluded impact here:-

  • The changing demographics of the workforce.
  • The economic recession and reducing value of pension provision.
  • The removal of a defined retirement age.

See here for Headlines and Statistics

Demographics
The demographics illustrate that by 2025 there will be more people over the age of 60 than under. If all (or significant numbers) of the baby-boomers do decide to retire en-masse then there is no doubt that there will be real skill shortages. Put bluntly there will not be enough generation x y or indeed z employees to replace them and it is anticipated that there will be a particular shortage of leadership skills

Economics
The cost of pension provision has increased but many have failed to start investing early enough or sufficiently enough to enable them to retire when they might want to. The impact of this is that individuals may be forced, for economic reasons, to work for longer than they want to or are capable of doing.

Retirement Age
There are greater challenges for organisations in managing retirement and succession due to uncertainty as to when individuals will retire. Looked at positively this gives some individuals and employers greater choices over ways of working and career changes. A more negative view is that claims to Employment Tribunals may beckon.

So what did our roundtable guests think?

  • The single biggest issue was an acknowledgement from all that performance management needs to improve. This is not limited to the annual appraisal but the need for line managers to engage with employees constantly. Managers need to have the confidence to discuss future plans, provide continuous performance feedback and understand what motivates employees. In that way performance is managed in a consistent and timely fashion; any need to change roles is more likely to be agreed and skills gaps, succession planning and knowledge transfer can be better managed.
  • The general consensus was that the demographic time bomb has some time to hit; there has not yet been a real problem with older workers staying on beyond their capabilities. Therefore it is difficult to know whether the majority of employees will follow the Pope’s lead and have the good sense to decide for themselves that it is the right time to go.
  • There was a feeling that older workers do not generally update their skills although the culture of the organisation was considered to be an important factor in maintaining vibrancy at any age.
  • Employees had taken for granted that they would be looked after in retirement by a final pension salary (even when there wasn’t one!). That this is increasingly not the case will impact on employees affordability to retire.
  • There was a suggestion that the removal of the default retirement age has made things more difficult for individuals with some indicating that they would prefer to be told when to go rather than have to make the choice themselves. Employers could do more here to understand employee’s aspirations and the options available.
  • A major challenge for some was how to engage younger generations. This was particularly with engineering or blue-collar workers where there are real concerns of skill shortages and an ageing workforce. A number of participants had put in place considerable investment in attracting young workers and providing support in preparation for entering the workforce. Despite this retention rates remained disappointingly low as many did not appear to have the commitment to hold a job down (ie to get out of bed and attend). There was much debate about what employers can do and the need for some innovative thinking here with more of a partnership approach.
  • Where organisations had restructured and downsized experience seemed to show that it was the younger workers who opted for voluntary redundancy rather than older workers (as had been anticipated). The feeling was that younger employees were more willing to change direction and more confident of getting a job than older workers.
  • Career expectations need to be managed in that there needs to be a greater acceptance  that the traditional career structure of an upwards ladder no longer applies throughout working lives. Also, employees need to understand that a downwards move or reduced hours at any stage of their working lives is associated with appropriate changes to terms and conditions.
  • Employers thought that the aims of auto enrolment were good and experience suggests that drop out rates were low. However, the rates of contributions would not be sufficient to provide for individuals retirements in the future.

We would very much like to continue this debate and hear from others as to what their main issues or concerns are and who may have different experience or views. We would also love hear about and share any examples of innovative practices as these issues emerge and evolve. It is clear that some employers are starting to grapple with these issues but the full impact is yet to come and we will all have to adapt, think differently and constantly change our approaches.

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2 Responses

  1. Ellie says:

    Thanks for sharing this great article, some very interesting facts.

    Ellie

  2. Ellie says:

    Great article, thanks for sharing it with us.

    Ellie

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