Europe is ageing. The median age increased by 2.3 years between 2013 and 2023, rising from 42.2 years to 44.5 in 2023. It is projected that by 2050, there will be close to half a million centenarians in the EU. This trend of low birth rates and higher life expectancy is changing the shape of Europe’s demographic structure – ultimately it means there is a diminishing population of working age people to support a growing elderly population.
This has implications on issues like taxation, living standards and workforce availability.
And factors like immigration feature, too. The upshot is that as the population ages and birth rates drop off, organisations need to think laterally about how they will resource the future, so demographic trends don’t negatively impact their operational performance.
This is having an impact on most industries and on lots of job roles. With administrative jobs, AI and machine learning can play a crucial role, as it means a lot of manual repetitive tasks can be automated. But for engineering, technical and construction roles – those needed for big energy transition initiatives or infrastructure projects, for example – the solutions aren’t so straightforward. Cables need to be laid, gas pipes need to be dug into the ground, renewable energy infrastructure built and bridges constructed. And for this, highly skilled labour is crucial.
In most European countries, governments have long recognised the threat and are putting in measures to try and head this off at the pass, running campaigns to attract people into these industries and extol the virtues of qualifications in these areas. But it’s not a quick fix. Organisations really need to be on the front foot in terms of workforce planning and putting in measures to figure out how they will operate going forwards.
So what are the key workforce management steps you should consider?
Creating a vision
You need to have a clear vision for the future – workforce availability, the skills you’ll need, the skills most at risk – map out your best and worst case scenarios and make a plan from there. A skills audit will give you a very clear idea of the skills available and the ones lacking in the workforce. This will inform action plans.
Upskilling personnel
Remember that you have a workforce already – they might be lacking some skills, but this is an opportunity to offer staff any relevant training they might need to learn new skills and move into new areas of the business. This is likely to have an impact on job satisfaction and retention rates too – people like learning new things and want to feel their employers are investing in their development.
Development plan
A cohesive, comprehensive development plan for workforce planning should provide a strategic approach to ensure you have the right people with the right skills, in the right roles at the right time. It should comprise components such as workforce analysis, strategic alignment with business goals, a talent acquisition and recruitment strategy, employee development and training, retention and engagement strategies, plus workforce and productivity optimisation. This should all be continuously monitored and evaluated to understand what changes need to be made over time.
AI, robotics and automation
AI can be a game-changer in workforce planning by enhancing accuracy, efficiency and strategic decision-making. Predictive analytics can be used to establish workforce demand and supply. It can also be used for skills gap analysis and development planning and for sentiment analysis in retention and engagement strategies. As we mentioned, AI is used to automate any manual, repetitive tasks, so there is no doubt it will play a big role in helping to solve demographic workforce problems in the future.
Education and grassroots
Raising awareness of our skills plight shouldn’t just be left to governments – organisations need to work together, across their industries, to encourage students and school children to study the right subjects, raise awareness of the attractiveness of careers in their industries, make them understand why working in engineering, or construction, or technology can be a rich, rewarding career.
It’s not as if we haven’t seen these demographic problems coming. Birth rates and ageing populations have been happening for years. In fact, two thirds of countries have childbirth rates below replacement rates (the old 2.1 children per family). It is only sub-Saharan Africa where populations are growing these days.
Most organisations have understood this and are putting in place measures to mitigate for it. But this problem is only going to evolve – and approaches to workforce planning need to evolve too. It’s not a case of coming up with a programme and leaving it trundle along. Constant evaluation, measurement and tweaking of the approach is going to be key for organisations to survive and thrive.
If you would like to speak to someone at Valcon about your approach to workforce management and how you can come up with strategies to future proof your workforce, please get in touch: [email protected] and [email protected]
