Our population is ageing and longer life expectancy is putting a strain on pensions that could leave millions of people over the age of 65 forced to continue working into later life. At the same time the “first tribe of true digital natives” – Generation Z – has started to hit the labour market –. But, despite this influx of millions of younger workers, current supply doesn’t match the workforce demand. The next decade will see 13.5 million vacancies open, but only seven million school leavers to fill them. The UK economy is set to face a major labour shortage.
Generation Z employees desire more freedom, stimulating work and a sense of purpose in their job roles. These employees are driving a revolution in the workplace like never before. At the same time, digital transformation is underpinning each and every sector across the labour market, increasing competition and forcing businesses to adapt at pace. In this uncertain working environment, employers are struggling to attract, hire and retain the right people to propel their organisations forward. Business leaders will need to be inventive to plug the gap, both in the short and the long term.
The ageing workforce
By 2026, there will be nearly 20 per cent more people over the age of 65 in the UK. Individuals are already having to stay in work for longer to financially support themselves, shifting the dynamic of the workforce significantly. Older workers are occupying positions that they would traditionally have retired from earlier, creating a “grey ceiling” for younger workers climbing up the ladder.
Career development is slowing, and the market is becoming more stagnant. This could also impact growth opportunities for business overall, with those at the beginning of their career potentially becoming demotivated at their slowed progress, Meanwhile, older workers could become far less enthused, as they cling to their careers out of necessity rather than desire.
Tapping into underutilised resource
More experienced workers equally provide a “hidden talent pool” in the labour market. Businesses have to consider using this resource, if they are to fill the roles they need to achieve long-term organisational growth. But there needs to be a significant cultural shift and a change in traditional company practices and attitudes in the workplace.
Legacy systems are incredibly important and there is a need for older generations to train younger workers in these areas to ensure knowledge isn’t lost. But at the same time, we must move away from the idea that the over-50s are less adaptive, unwilling or incapable of learning new practices. The key to getting this right lies in upskilling this workforce too.
Breaking through the grey ceiling
Generation Z could hit the grey ceiling in later life too. To prevent this, companies should not only hire the specialist talent they need now, but also work with trusted partners and consultancies to give them strategic direction and identify the skills they will need in two to three years’ time. This could include re-training and upskilling older employees for other areas of the business to ensure that senior openings are available for younger employees to aim for. This will also enable businesses to capitalise on growth opportunities from transformation and digital technologies.
The labour market stands on the precipice of change in the way that talent is sourced. While socio and economic factors are driving a fundamental shift, it will be down to business leaders to respond. Those that do will reap rewards, by being able to attract, engage and retain the people they need to succeed. Organisations can continue to create exciting new career opportunities for all employees by increasing the flow of talent and encouraging knowledge-sharing. In this they will ensure business growth in the digital age.
Geoff Smith is the managing director of Experis UK & Ireland.