Lucy’s Kitbag – Episode 6 – The Demographic Time Bomb
Newspapers and reports have been scaring us for some time now with startling headlines about the ‘Demographic Time Bomb’ and the devastation it could cause to the UK economy. The Independent recently stated:
‘The Government is “woefully underprepared” for a demographic time bomb that will see the number of people aged over 65 living in Britain leap by nearly five million in two decades….unless political leaders face up to the challenges they will endure a succession of “miserable crises” in the near future over how to care and pay for millions more pensioners, a House of Lords committee said. It sounded the alarm following projections of a 50 per cent increase in numbers of over-65s between 2010 and 2030 and a doubling of over-85s.’
While the Telegraph pointed out: ‘based on UN population estimates, the number of people in the developed world aged between 16 and 64 peaked in 2010, while the number of people aged 60 and over will exceed the number of children for the first time in 2047, and more than double from 841m in 2013 to two billion by 2050. In the UK, the average age is expected to rise from 40 years in 2014 to 42.9 by mid-2039, when one in 12 people is projected to be aged 80 or over, according to the Office for National Statistics (ONS)’.
But why should companies such as Thales be worried about the demographic time bomb? The most significant impact on businesses will be large numbers of employees looking to retire in the next 5 to 10 years, which could leave a significant skills gap if not properly planned for. But what can we do about this? HR and L&D can and should play an important role in this critical business issue. It is important to dust off the strategic workforce plan (or if one does not exist, write one!) and put it into action. The strategic workforce plan should be carefully aligned to the future direction of the company and clearly identify the core competencies the company needs to maintain competiveness in the future. Challenges such as the demographic time bomb should be risk managed and monitored closely. At Thales we are doing just this and working hard to gain clarity on the critical business skills and knowledge we need for the future.
A programme I have recently been developing to help departments deal with this issue is called ‘skills assurance’. Skills assurance is a business continuity activity which is critical to strategic workforce planning. The process seeks to capture critical business knowledge from key personnel who are leaving a project, moving to a new business department or about to retire. Each of these scenarios presents the business with a number of significant risks; skills assurance helps to mitigate these.
The skills assurance process is a series of focussed activities which seek to ensure a business is able to maintain a critical set of skills and knowledge to sustain operational activity. An important stage in the process is ‘Systematic Knowledge Transfer’ – a process that actively supports experts who need to pass on their knowledge to colleagues in a structured and organized manner. It also validates and prioritises the topics that should be transferred to a ‘Knowledge Recipient’. The Knowledge Transfer process is managed and delivered by a ‘Knowledge Transfer Consultant’. The ‘Knowledge Transfer Consultant’ primarily assumes the role of a facilitator and project manager in this process. They also advise on the methods through which knowledge can be passed on.
Within Thales this process has led to the identification of key business knowledge objects and captured critical business risks and issues, which have consequently led to action plans being formulated, helping the mitigation of the risks we foresee when a person leaves the company.
In addition to this we are developing tools to help identify and prioritise key personnel to be fast tracked through this process and therefore enable us to capture business critical knowledge and also prepare succession plans appropriately, to ensure that the business is able to continue with minimum disruption.
The process is intensive and requires skilled facilitators to manage it successfully, but using carefully constructed questions and coaching skills we have seen extremely positive results, and have been able to effectively transfer the knowledge in a recent pilot we conducted.
It is important that organisations facing similar issues think carefully about the demographic time bomb and consider how it may affect their business in the future, and what can be done to limit potential damage. It is an issue we take very seriously within Thales and one we are actively working to address before we reach the crisis point.
If you’d like to know more then check out the latest issue of our L&D magazine, Enhance, where we discuss the issue of the demographic time bomb and some of the steps you can take to mitigate the risk to your company. Or if you’d like to hear more about the tools we are developing to help businesses tackle this challenge, please get in touch by phone, email or on social media; we’d love to hear from you.