Organisations have to confront the impact of rapidly ageing population profile on their workforce planning, a major report has warned. The World Economic Forum, in association with HR consultancy Mercer and the Organisation for Economic Co-operation & Development (OECD), notes that by 2050 the number of people aged 60 and older in developed countries will have increased from 21% today to 32%.

In the less-developed countries the increase is even more dramatic in proportional terms: from 8% to 20%.

‘Workforce planning needs to address the key long-term demographic issue of ageing by promoting work for older employees, a strategy that should be a key element of any organisation’s workforce plan,’ the report states.

‘A critical element of business success is ensuring that a company has the right number of employees with the right skills in the right place to execute the business strategy.’
Companies need ‘to analyze future workforce needs against internal and external labour markets to identify potential shortfalls and to design interventions to fill the gap’, the report adds.

In the UK, the number of retired people is around 25% of people of working age, set to increase to around 40% by 2050, which will reduce the number of workers to support each retiree from 4 to 2.5.

Many European countries will be in a much worse position. For example, by 2050 Italy and Spain will have a ratio of around 60% - implying fewer than two workers for each retiree. Japan's position implies just over one worker to support each retiree in future.

There are huge implications for retirement age and pension provision, as well as workforce planning, the report warns.

'Transforming Pensions and Healthcare in a Rapidly Ageing World: Opportunities and Collaboration Strategies' is available from www.mercer.com/WEF