Overview | The effects of prejudice | An ageing, shrinking workforce | The economic impact

An ageing, shrinking workforce

The UK work force is growing steadily older and smaller.

In his book Age Quake*, Paul Wallace records how birthrates have been in decline since the 1960s. This, combined with increasing life expectancy due to better nutrition and healthcare, is pushing the average age of the population upwards. In 1900 the average age in the UK was 24; by 2000 it was 37.

Not only are fewer young people entering the labour market, but also an increasing number of people are retiring earlier.

Working age projection 1986 - 2026


Source: EFA Factsheet 1999

Contraction

	By 2006 the 25-34 age group will decline by 2 million from a peak of 9 million in 1996 Nearly 1 in 3 of the workforce is now over 40 By 2006 there will be 500,000 more female workers in the 45-59 age group Over 50 per cent of employees now retire before the official company retirement date EFA, 2001

As a result of these demographic changes, the UK workforce is contracting, and will continue to do so. The implication for employers is that skilled staff will become increasingly difficult to recruit and retain, as businesses tackle mounting recruitment problems by headhunting their competitors' key employees.

Skills shortages are already at an all-time high.

'Even blue chip companies are finding the labour market so tight they are suffering serious recruitment difficulties. The Germans, French, Australians, Canadians and Americans are out in Bangalore trying to recruit IT specialists, especially software programmers, of which we are all very short.' **

Businesses that fail to come to terms with the effects of demographic change will inevitably see a negative impact on the bottom line as they struggle to retain and recruit the employees they need to compete.

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