In almost every conceivable way, the UK’s ageing population represents a reason to celebrate. After all, an ever-increasing life expectancy remains one of the greatest achievements of the 20th century, and one that is prevalent across most Western economies. The numbers make this abundantly clear, with life expectancy in the US alone having risen from 45 in 1902 to 75.7 in 2004 and similar trends prevalent in Europe and the UK. The primary result of advancement in medical science and the healthcare sector, this is something that our society should take huge pride in.
It is not without its challenges, however, as this trend is creating an ageing population that some have referred to as a demographic time-bomb. Not only does this place a greater strain on our planet’s natural resources and impact on the existing quality of live in the Western world, for example, but it also alters the balance that exists between working age people and those who have retired. This figure stood at 3.7 to 1 back in 1999, but it is forecast to fall to 2.1 to 1 by the year 2040.
This trend is already manifesting itself in the UK, with a serious shortage of skilled labour nationwide. Sectors such as oil, gas and haulage are also in desperate need of skilled workers, with an estimated 100,000 additional employees needed by the year 2018.
Although this is an issue that is impacting on businesses of all sizes, it is undoubtedly something is cause greater concerns for SMEs. After all, firms of this type are already being negatively affected by the spectre of Brexit, which aside from its impact on the value of the pound will ultimately reduce the number of available migrant workers in the UK and diminish the nation’s workforce even further. This also has cost implications for small business owners, who will be forced to increase their annual salary outlay and invest more in the retention, training and acquisition of talent.
How can SMEs react to this challenge?
The challenge that remains for British SME is how to respond, as they are faced with a serious labour shortage and the prospect of spending more to acquire top, industry talent. One initial solution is to focus on retention, particularly of the younger talent that exists within their ranks. It is increasingly important that SMEs understand the mind-set of millennials and younger employees in the modern age, while tapping into the individual factors that motivate them to work.
This will help them to reduce their turnover of staff and optimise their human resources, while helping them to retain the younger employees that already work for them.
In addition to this, SMEs must also look to tailor their recruitment and retention policies to suit the current economic climate. It was recently revealed that the female retirement age is likely to reach 67 by the year 2020, for example, thanks to a nationwide pensions crisis and the ever-decreasing nature of the workforce. With the male retirement age already approaching 70, people are being required to work longer in order to build financial security and respond to the needs of SMEs.
This means that while there is a disproportionate number of workers that have officially reached retirement age, many are still open to the idea of working in order to improve their financial circumstances (or in some instances simply capitalise on the demand among employers). The problem is that they are unlikely to be motivated by the idea of working full time, so SMEs would be better served by creating part-time roles that benefit from flexible working directives. This could enable you to leverage the skills and experience of the older generation, without spending beyond your means or creating positions that are simply unappealing.
If we accept that there is a dwindling number of older, skilled and experienced workers in the UK, SMEs must also invest heavily in the acquisition and retention of this demographic. After all, these workers are in-demand across multiple markets, so SMEs with the most effective recruitment techniques will ultimately be best-placed to achieve their goals.
We have already touched on how flexible working directives can help in achieving this goal, as it lets older employees know they they are highly valued. It also affords them the freedom to drive their schedule and achieve a greater work-life balance, which is a high priority for those approaching retirement age.
It may also be a good idea to partner with affiliate and support groups for older workers, as this can help with both the acquisition and retention of talent. It can be particularly helpful with networking and skills development, which are extremely important factors for older workers to consider in a rapidly changing job market.