Japan is one of the first countries to address the planning implications of an aging workforce, and it’s not a surprise why. With the highest proportion of older adults in the world, by 2030 one in every three people in Japan will be 65+ years, and one in five people 75+ years.  Increasing demands for senior services could at some point soon result in robots doing low-level jobs, such as delivering medicines, bedpans, or even companionship as the operating system does in the movie “Her.”


Add to that declining birth rates and it also leads to new workforce planning implications. In many economies, due to advances in healthcare and declining birth rates, the population is graying and the workforce is shrinking, not only in Japan.


Overall Europe experienced a 1 percent decline in population in the last decade, with Germany, Italy, and Spain all expected to experience population declines ranging from 14 to 25 percent, according to the United Nations Population Division. By 2030, China will have nearly as many senior citizens aged 65 or older as children aged 15 and younger, resulting in a workforce deficit.


In the United States, 10,000 people a day turn 65 and will continue doing so until 2030.  People are living and working longer, with the average retirement age for most people working now expected to be 66, up from 57 two decades ago. Among those people over 55 in the US, an astonishing 43% have less than $25,000 saved for retirement, and many see no end to working in the foreseeable future.


What does that mean for organizations? I see six big implications.


  1. Diversity & flexibility are required – We must plan for a more diverse workforce, across a broad range of factors such as age, ethnicity, gender, etc. To keep up GDP rates, countries will have to loosen immigration policies, and we can expect a more diverse workforce as a result. Also, in a survey we ran with Oxford Economics in 27 countries, we found that 83 percent of executives plan to use more contingent, part-time, and contract workers in the coming years. Our workforce will thus be more global, more diverse, and more flexible than ever before.
  2. Planning starts now – In order to compete, organizations will need to do workforce planning now. If they wait, they will just have to join the crowd going after the best remaining talent, and that is not going to be a fun chase.
  3. Retention is key – The best plan for having great talent is to hold on to the people you already have. Or maybe even the ones you used to have. Have a great retention plan, and keep in touch with your alumni.
  4. But new skills are required – Focus on development. Only 34 percent of employees in our Oxford study told us that their employer helps them get the skills they need for the future.
  5. Competition for the best will be stiff – Develop a plan for attracting the best new talent. Understand what your employee value proposition is and how effective it will be in attracting the new and emerging workforce.
  6. Leadership matters – Start building leaders now. Too often we wait until someone is promoted into a leadership position before we consider training them and preparing them. As a coach once told me, what got me here won’t necessarily get me to the next place. We need to prepare leaders before we need them if we are going to inspire our talent and remain competitive in the workplace.


We can all take a lesson from Japan planning ahead for its population. Are you doing the same for your organization?

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  1. Patrick Diaz

    Great post Mike. The other critical challenge (particularly in the West) will be to identify, recruit, and develop talent among migrant populations as many countries (i.e. Italy and the US) have a native birth rate < 2.1, the required rate of replacement. The challenge of transferring skills among generations with different workforce expectations will only be compounded by different cultural expectations from a variety of young workers immigrating to and working in the West. However, these challenges pale in comparison to the opportunity that such different perspectives and innovative ideas from the new workforce.

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