European Companies Unprepared for Demographic 'Double-Whammy'

Most European companies are unprepared for the Demographic ‘Double Whammy’ that will strike when the recession ends, according to a new Report by the Boston Consulting Group(BCG) and the European Association for People Management (EAPM).

Their study found that only 15 per cent of the European companies who responded plan their work force more than three years in advance - suggesting that many companies may soon face key shortages in skills as the ‘double whammy’ of falling birth rates and rising numbers of baby boomers entering retirement shrinks the size of the workforce.

The report also found that nearly half (47%) of European companies do not plan their work force requirements more than a year in advance. Companies that have been forced to cut costs and reduce head count during the recession may struggle to find the people they need when growth eventually returns. Companies therefore need to consider the long-term impact of their actions, even—or especially—in times of crisis.

“In 10 years, the scarcest resource for a company will be people,” commented Rainer Strack of BCG, a co-author of the report. “Companies should understand how their work force will develop, which job categories drive the business, and how demand will evolve. With the uncertainty prevailing today, the human resources (HR) department should analyse different scenarios to figure out whether and how to find, hire, retrain, outsource, or lay off employees.”

The report Creating People Advantage: How to Tackle the Major HR Challenges During the Crisis and Beyond analyses the results of a survey of almost 3,500 HR professionals across Europe.

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