This problem will be particularly acute in the European Union. Between now and 2050, the number of people in the European Union aged 65 and above relative to those aged 15-64 will rise from 24.5% to 52.8%. In the UK this growth will not be as steep, but the ratio will still rise from 24.3% to 45%.
This demographic change will have inevitable consequences for labour markets. For example, in the UK the Department for Work and Pensions (DWP) estimates that by 2011, 12 million workers will be over 65, whereas there will be 1.3 million fewer workers aged 25 to 35.
A number of factors have contributed to this development. They include falling birth rates, increasing life expectancy and, to a certain extent, a decrease in the participation of younger workers in the labour market, as increasing numbers remain in higher and further education. Whatever the causes, it is clear that this will present real challenges for governments, organisations, individuals and society.
For the UK government an ageing population creates a number of macro-economic challenges. Chief amongst these is the need to reform the UK’s pensions system to ensure its long-term sustainability. EEF published a report in this area in 2005 and is continuing to work closely with the government as it implements these reforms.
Because of this theory EEF talked to our to our members to find out how real these concerns are in practice and see if companies are taking steps to address them. We interviewed 200 companies by telephone and held face-to-face discussions with just under thirty others.
The following report uses this data, and other research, to outline a number of messages. Chief amongst these is that manufacturers are coping well with many of the issues related to an ageing workforce, often in a fairly simple and pragmatic way. However, our research also shows that there may be areas where employers will need to do more in the future.