The Future of Work: Avoiding a Demographic Crunch


We know that where and how we work in the future is going to change, but have we thought about who’s going to do that work? Replacing the current workforce is unlikely to be a smooth transition as recent CIPD report has highlighted the risk of a demographic crunch, whereby organisations are struggling to fill the places of existing employees. This recent CIPD policy report highlights specific demographic issues which should be kept in mind when organisations are creating future strategy.

Minimising Lost Knowledge

There are already 9.4 million people in employment over the age of 50 in the UK, which equates to approximately 30% of the workforce. In the coming decades, a vast proportion of this group will leave the world of work, taking their skills, knowledge and experience with them. This seems to be an especially pertinent issue in the sectors of finance, public administration and ICT, which all show a poor record of retaining older workers. As a result, these sectors are likely to be hampered by the loss of skilled and experienced staff. What is your organisation doing to ensure that their knowledge and skills are not wasted, and are passed to the next generation?

Retaining Generation X

This does imply, however, that the workers who are learning from these experienced individuals are likely to stay in the organisation long enough to use these new skills and learnings. As the CIPD report shows, if only 40% of those in their thirties and forties remain employed in their fifties and sixties, this could lead to a labour supply gap of over 1 million. Whilst school-leavers might remedy this chasm to a degree, they may not have the skills or experience to take on senior positions. It’s therefore vital to take action to increase employee retention of generation X employees. What is your organisation doing to retain valuable talent in their thirties and forties?

Limited Talent Pool

Long-term demographic change means that there will be a lesser supply of young people who will replace retiring workers in the labour market. Equally, levels of migration are unlikely to be as high as over the past decade, further limiting the talent pool. There are currently over 1.5 million workers over the age of 50 in health and social work and more than 1.2 million over 50 in both education and retail. Replacing such large numbers of workers will require a significant number of future school-leavers to fill the gaps left by older workers in these sectors. What is your organisation doing to attract the limited talent?

Raising Workforce Productivity

Given the demographic changes replacing a retiring workforce man-for-man might not be feasible. It may therefore be necessary to think how the productivity of your workforce can be maximised per person. However, the UK is in the midst of a productivity crisis, with output per hour still below its 2007 peak. Productivity depends on a myriad of factors, ranging from employee engagement to the technology which enables them to do their work. Which of these factors is your organisation targeting to help raise workforce productivity per person?


In summary, the numbers clearly show that organisations need to act to avoid an economic, as well as demographic, crunch. Whether it’s facilitating knowledge-sharing, increasing employee retention or raising productivity per person, organisations need a plan so that they have enough of the right people to be successful in the future of work.

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