A report from the Economist Intelligence Unit Confidence or complacency? The implications of an ageing workforce in Germany Sponsored by Confidence or Complacency? The implications of an ageing workforce in Germany Contents Executive summary Leading from the front? Getting the balance right Keeping Germans happy Case study 10 Conclusion 11 Appendix 12 © The Economist Intelligence Unit Limited 2014 Confidence or Complacency? The implications of an ageing workforce in Germany Executive summary Workforce ageing will hit Germany sooner than any other European country Are the nation’s executives right to be so relaxed about the impact? Historically low birth rates and increasing life expectancy mean that Europe’s working population is ageing fast In 2012 the continent reached an inevitable demographic tipping point The percentage of the population of working age fell for the first time in 40 years It is now forecast to fall every year until 2060 This inescapable trend will have profound implications for governments, citizens and companies across Europe The working population is ageing fastest in Germany, and many of its companies are leading the way when it comes to adapting to demographic change Those that have yet to act have little time for further delay, as Germany has less room for manoeuvre than the continent’s other large economies, according to the European Commission To explore some of the issues that senior executives will have to address as they seek to adapt their organisations to this new world, The Economist Intelligence Unit, on behalf of Towers Watson, surveyed 480 senior executives at companies across Europe, of which 56 are in Germany Almost two-thirds (58%) of German respondents expect the number of their employees aged 60+ to increase by 2020, including 7% who expect it to increase significantly This report explores some of the major issues that senior German executives will have to address as they seek to adapt their organisations to this new world The key findings include the following German executives are leading the response to workforce ageing Compared with their counterparts in other countries, they rank in first or second place when it comes to offering more flexible working hours or working from home (77%), changing the employee benefits they offer (55%), and making physical changes to the workplace (45%) Early action reduces the sense of panic, possibly Germany’s working-age population has been declining for years Yet only 14% of its executives—the same as the average for Europe—see ageing as high-priority human resources issue today Talent becomes a priority, but not at the expense of cost control In the years to 2020 German executives will pay more attention to talent management The share of those rating it as a top two priority leaps by 237%—by far the biggest increase in Europe But at the same time—and unlike others in Europe— German executives plan to maintain their tight grip on cost control German workers value financial security Today, they worry less than anyone else in Europe about whether they might lose their jobs, according to their employers And any fears they have will ease further as the economy improves But that will not stop Germans worrying about their financial security Their worries on this point barely fall between now and 2020—41% of employers rank it is as a concern of their employees today, compared with 39% in six years’ time © The Economist Intelligence Unit Limited 2014 Confidence or Complacency? The implications of an ageing workforce in Germany Leading from the front? The economic and business implications of Europe’s ageing workforce are huge, and the demographic trends that will affect the continent as a whole are more advanced in Germany than anywhere else which is unlikely to feel the pain until the early 2020s And with unemployment relatively low, Germany faces another challenge: there is not a lot of productivity slack in its economy, so it will not have as much time to adjust as other countries “Over the next decade Germany will find it difficult to sustain employment and its GDP growth path without recourse to much higher inflows of foreign workers and a substantial increase in its annual productivity growth,” the Commission says To achieve annual GDP growth of just 2%, productivity growth levels would have to climb by about 3% annually—three times the level achieved before the 2008 financial crisis In the decade to 2012 the German ratio of dependent people (those aged under 15 and over 65) to the working-age population increased from 45.6% to 51.2%—the biggest rise in Europe The decline of the working-age population in Germany has been under way for a number of years, according to the European Commission, which predicts that the country could experience labour bottlenecks within the next two years That is much earlier than in the UK, for example, Chart What are the main people (HR) issues you face as an employer currently, and employer by 2020? (% of respondents) Germany now UK now Europe in 2020 Germany in 2020 UK in 2020 41 38 39 28 29 27 11 9 10 12 14 11 12 14 11 9 13 14 14 18 19 22 21 16 12 14 12 24 16 14 20 21 24 28 32 34 32 34 39 31 28 26 30 31 25 31 20 21 26 27 41 50 49 47 50 44 43 47 54 Europe now Recruitment Retention Motivation and engagement Talent management and progression Skills shortages Healthy Cost control (compensation workforce and benefits) (health, stress and wellbeing) Source: The Economist Intelligence Unit © The Economist Intelligence Unit Limited 2014 Ageing workforce Regulation (state/EU) Downsizing/ offshoring Diversity of workforce Confidence or Complacency? The implications of an ageing workforce in Germany Chart What, if anything, does your business plan to by 2020 in order to adapt to the changing needs of your workforce? (% of respondents) Europe Germany France 28 Making physical changes to the workplace 45 27 50 Changing the employee benefits we offer 39 56 Offering more flexible working hours or working from home 49 Ensuring that the skills of older employees remain up to date 32 33 Giving employees more choice over their benefits 27 Looking at how to address intergenerational differences in our workforce 21 25 77 46 48 36 Adapting our structure to ensure that older workers who reduce work hours or responsibilities retain their status within the company and continue to feel valued Other, please specify 55 39 45 48 29 2 Source: The Economist Intelligence Unit Despite these gloomy forecasts, German executives are no more concerned about the threat of an ageing workforce than their counterparts elsewhere Some 14% say it is a priority human resources issue today, which is the same as the European average By 2020 the level of executive concern doubles, but it leaps much further elsewhere, such as in the UK (280% increase) and Spain (160%) Likewise, German executives are not especially likely to rate skills shortages as a top three human resources problem, despite the Commission’s prediction that the country will feel the pinch sooner and harder than others Today, 16% rate it as a top three issue, compared with a European average of 21% By 2020 it will climb a little to 20%, but this is still below the European average (24%) German executives might be more relaxed than their European counterparts about the ageing © The Economist Intelligence Unit Limited 2014 threat because feel they have responded to it Given a list of possible management strategies to deal with the challenge of an ageing workforce, German executives lead the way in most areas They rank in first or second place of European countries when it comes to offering more flexible working hours or working from home (offered by 77%), changing the employee benefits they offer (55%), and making physical changes to the workplace (45%) The only two areas where they are not among the top two are giving employees more choice over their benefits (45%) and looking at how to address inter-generational differences in their workforce (25%) But even on those points they are broadly in line with the European average, and well ahead of laggards such as France and Spain Confidence or Complacency? The implications of an ageing workforce in Germany Chart Which of the following you think is most likely to happen as a result of an ageing workforce? (% of respondents) Europe 43 Germany 46 43 39 38 35 23 Greater employee demand for benefits (healthcare, retirement and other benefits) 35 23 Greater risk of age discrimination claims Source: The Economist Intelligence Unit 34 © The Economist Intelligence Unit Limited 2014 Higher costs of benefits Progression of younger workers becomes more difficult Increased flexible working (to provide care for older dependents, phased retirement, etc) Confidence or Complacency? The implications of an ageing workforce in Germany Getting the balance right As Europe’s economic prospects improve, executives across Europe plan to rethink the way they balance cost control with talent management Those in Germany are on the same journey, but they expect to arrive at a rather different destination Today, executives in every country have a clear focus on controlling costs—57% say it is one of their top two business concerns Talent management is a much lower priority; just onequarter (24%) rate it as a concern This makes sense, given recent economic history The picture is the same in Germany, but the lines between these priorities are drawn more clearly here than anywhere else The gap between how highly German executives currently rank cost control and how lowly they rank talent management is 48 percentage points—well above the European average (33 points) and second only to Switzerland (49 points) In the years to 2020 German executives will pay more attention to talent Indeed, in 2020 the share of those who rate it as a top two priority leaps by 237%—by far the biggest increase in Europe (the average is just 73%) But the survey shows that German executives plan a more subtle rebalancing of their priorities than their counterparts in other countries Today, those in the UK, Italy and Spain, for example, say cost is far more important than talent; and by 2020, they think talent will be far Chart What would you say is the most important business priority for your organisation currently? (% of respondents) Cost control Talent management (HR) 68 68 67 63 58 50 29 19 © The Economist Intelligence Unit Limited 2014 24 26 24 16 13 France 2020 Germany 2020 UK 2020 Europe 2020 Spain now Netherlands now Italy now Source: The Economist Intelligence Unit 24 20 13 France now Germany now UK now Europe now 14 23 Switzerland 2020 21 40 38 Netherlands 2020 27 25 40 39 33 Switzerland now 24 48 45 42 Italy 2020 49 Spain 2020 57 Confidence or Complacency? The implications of an ageing workforce in Germany connects with another of the survey’s findings: although many of them believe that workforce ageing will increase the cost of benefits (38%), this is a greater worry for executives in every other country Perhaps the Germans’ willingness to adapt now to demographic change offers a cost-control lesson to executives in other countries? more important than cost For these executives, the gap between the two concerns in 2020 will range from 24 to 27 percentage points in talent’s favour By contrast, German executives expect a more balanced set of priorities; yes, talent will rate higher than cost in 2020, but only by a modest percentage points The desire of German executives to reach a closer balance between cost and talent management Chart Alignment of countries in cost control and talent management (% of respondents) Cost control Talent management (HR) 48 45 42 % point difference 40 39 40 38 33 25 23 19 27 24 24 26 24 24 20 14 13 16 9 Europe UK Germany France Italy Netherlands Switzerland Spain Source: The Economist Intelligence Unit Sidebar: Many German executives are looking to manage the impact of workforce ageing by designing better benefit programmes The survey suggests there is plenty of scope for improvement here Some 41% of them say their company has built up its benefits package over time, without any overarching strategy—by far the highest figure in Europe, where the average is 29% And onefifth of German executives (20%) say they have lost track of why they even offered the benefits 23 19 © The Economist Intelligence Unit Limited 2014 that were in their programme—almost double the European average Ironically, German executives are also the most likely in Europe (48%) to say it is often better for employees to get certain benefits through work rather than having to buy them themselves If that is what they believe, a review of the benefits they offer seems in order 24 Confidence or Complacency? The implications of an ageing workforce in Germany Keeping Germans happy A brightening economic outlook across Europe is likely to affect the concerns of employees The survey shows that in most countries employers think their staff will begin to worry less about whether or not they have a job and more about how hard they work But the trends are different in Germany Today, the country’s workers are the least worried in Europe when it comes to hanging on to their jobs Only 57% of German executives say this is among their employees’ top three concerns; the average across Europe is 64% By 2020 that figure falls by 38 percentage points in Germany, which is one of the biggest proportional drops in Europe But the famously prudent Germans are not all smiles Those easing job fears will not stop them worrying about their financial security In fact, their concerns on this point barely fall between now and 2020—41% rank this is as a concern today, compared with 39% in six years’ time Countries such as Switzerland and France, by contrast, both see proportionate falls in concern of more than 29% Germans are also set to become much more worried about their work/life balance and Chart What you believe to be the issues your employees see as most important today? (% of respondents) Europe Now Germany now Europe in 2020 Germany in 2020 64 57 41 41 39 32 45 46 42 38 39 38 33 31 29 20 20 23 23 27 25 19 15 25 17 21 20 21 30 24 20 20 25 21 14 11 Financial security Job security Saving for retirement Stress and wellbeing Healthcare provision Work-life balance Source: The Economist Intelligence Unit © The Economist Intelligence Unit Limited 2014 Employment Skill New flexibility development technology (job sharing, /pace of portfolio careers, change part-time working, phased retirement) Caring for dependents (children and elderly) Confidence or Complacency? The implications of an ageing workforce in Germany whether they are saving enough for their retirement Here workers can expect their employers to help them out The country’s executives are the most likely in Europe to say that the employer should provide or fund retirement savings (64% agree, compared with 41% across Europe) But that generosity has limits: only one-third (36%) of German executives feel that the employer should help employees have a “comfortable” living in retirement—below the European average of 43% Like their counterparts across Europe, German executives question whether their country’s system of pension provision is sustainable About one-quarter (26%) believe demographic change is the biggest threat They also worry about the high cost to businesses of providing pensions (16%), stretched government finances (13%) and a lack of sufficient savings made by individuals (13%) When they look to adapt their pension provision to the reality of workforce ageing, executives across Europe see excessive regulation as a barrier But those in Germany worry about this the least Instead, their big concern is cost— whether that relates to making changes to provision (43%) or funding (also 43%) German executives have a different perspective on healthcare, too Many of them agree with their counterparts across Europe that the responsibility of employers for their workers’ © The Economist Intelligence Unit Limited 2014 wellbeing and their share of the social welfare burden will only grow But this trend is less pronounced in Germany Less than half (40%) of German executives expect the state to play a reduced role in providing healthcare, compared with 54% across Europe Even if state health provision were not under pressure, the health and welfare of employees would logically become a growing human resources concern, as workforce ageing will require companies to rely more on older workers However, German executives are less likely than their European counterparts to believe that the health and wellbeing of their workforce will be an increasingly important issue for them as an employer (56% in Germany, compared with 70% across Europe) They are also the least likely to agree that healthcare costs will increasingly fall on employers (42% in Germany, compared with 55% across Europe.) Why Germans not fear increasing costs in this area? Perhaps the answer is that many of them have been adapting their working practices for years “There has been a noticeable change in our business culture as a result of better awareness of health issues and prevention,” says Ralf Urlinger, vice president for corporate health management at BMW “It’s difficult to quantify the benefits in a few years because most of the results will be in the long term But what we see and hear is that it impacts the motivation of the workforce and their dedication.” Confidence or Complacency? The implications of an ageing workforce in Germany Conclusion Germany has a rapidly ageing workforce, an imminent shortage of potential employees and less scope for manoeuvre than other countries in Europe Yet its executives are no more worried about demographic change than their counterparts in other countries This might sound like complacency But Germany reached its demographic tipping point before other countries and has been making the necessary adjustments for years Companies such as BMW and BSH have already made impressive changes to the way they operate More importantly, they have begun the 11 © The Economist Intelligence Unit Limited 2014 essential process of cultural change, whereby workers are thinking harder about how to make themselves employable for longer So perhaps the relative lack of concern is explained by the simple fact that German executives understand the challenges of demographic change; they have tried to something about it and are learning from what in their experience works Confidence or Complacency? The implications of an ageing workforce in Germany Appendix: Survey results What would you say is the most important business priority for your organisation currently? Select up to two (% respondents) Cost control 63 Expansion 36 Restructuring 34 Innovation 34 Talent management (HR) 14 Risk control and management 11 What would you say will be the most important business priority for your organisation by 2020? Select up to two (% respondents) Talent management (HR) 48 Innovation 43 Cost control 39 Expansion 38 Risk control and management 11 Restructuring 12 © The Economist Intelligence Unit Limited 2014 Confidence or Complacency? The implications of an ageing workforce in Germany By 2020, what will be the main drivers of change for your business? Select up to two (% respondents) Talent/people management 55 Global competition 54 Technology 50 Ageing 20 Offshoring/outsourcing 16 Changing size and role of the state Other (please specify) What are the main people (HR) issues you face as an employer currently? Select up to three (% respondents) Cost control (compensation and benefits) 50 Motivation and engagement 43 Retention 39 Talent management and progression 39 Recruitment 27 Regulation (state/EU) 18 Skills shortages 16 Healthy workforce (health, stress and wellbeing) 14 Ageing workforce 14 Downsizing/offshoring Diversity of workforce Other (please specify) 13 © The Economist Intelligence Unit Limited 2014 Confidence or Complacency? The implications of an ageing workforce in Germany What will be the main people (HR) issues you face as an employer by 2020? Select up to three (% respondents) Talent management and progression 50 Motivation and engagement 32 Cost control (compensation and benefits) 32 Retention 30 Ageing workforce 29 Recruitment 21 Healthy workforce (health, stress and wellbeing) 21 Skills shortages 20 Downsizing / offshoring 11 Diversity of workforce 11 Regulation (state/EU) Other (please specify) What you believe to be the issues your employees see as most important today? Select up to three (% respondents) Job security 57 Financial security 41 Work-life balance 38 Healthcare provision 27 Stress and wellbeing 25 Saving for retirement 23 New technology/pace of change 21 Skill development 21 Employment flexibility (job sharing, portfolio careers, part-time working, phased retirement) 20 Caring for dependents (children and elderly) Other (please specify) 14 © The Economist Intelligence Unit Limited 2014 Confidence or Complacency? The implications of an ageing workforce in Germany What you believe to be the issues your employees see as most important by 2020? Select up to three (% respondents) Work-life balance 46 Financial security 39 Employment flexibility (job sharing, portfolio careers, part-time working, phased retirement) 39 Saving for retirement 38 Skill development 30 New technology/pace of change 21 Job security 20 Healthcare provision 20 Stress and wellbeing 11 Caring for dependents (children and elderly) Other (please specify) What, if anything, does your business plan to by 2020 in order to adapt to the changing needs of your workforce? Select all that apply (% respondents) Offering more flexible working hours or working from home 77 Changing the employee benefits we offer 55 Ensuring that the skills of older employees remain up to date 48 Making physical changes to the workplace 45 Giving employees more choice over their benefits 45 Adapting our structure to ensure that older workers who reduce work hours or responsibilities retain their status within the company and continue to feel valued 39 Looking at how to address inter-generational differences in our workforce 25 Other, please specify 15 © The Economist Intelligence Unit Limited 2014 Confidence or Complacency? The implications of an ageing workforce in Germany How likely is it that the benefit programmes you have in place now will remain fit-for-purpose in 2020? (% respondents) Very unlikely Unlikely 29 Neither/neutral 32 Likely 25 Very likely Don’t know By 2020, for the typical employee at your company, you believe that the costs of benefits as a percentage of salary will: (% respondents) Increase significantly Increase 39 Stay the same 46 Decrease Decrease significantly Which of the following statements describes your company’s attitude to benefits offered to employees? Select all that apply (% respondents) We make sure we’re offering what’s normal for our industry, to keep up with competitors 61 We think it’s right to look after our staff, and our benefits reflect that 50 It’s often better for employees to get certain benefits through work than buy them themselves 48 We offer a fully comprehensive benefits package to attract and retain employees 48 We’ve built up benefits over time, without an overarching strategy for choosing them 41 We have a carefully selected set of benefits suitable for our employees’ lifestyles 36 It is difficult to reduce elements of our current benefits package so any change results in an increase in overall costs 21 Due to historic reasons /changes we have lost track of why we have the benefits we have 20 We only offer the minimum benefits that are legally required, and otherwise just pay cash 20 In the future, we are more likely to give employees a cash allowance and let them choose what benefits they like 14 Other, please specify 16 © The Economist Intelligence Unit Limited 2014 Confidence or Complacency? The implications of an ageing workforce in Germany Who should be primarily responsible for providing and/or funding the following benefits? (% respondents) Individual Employer State Retirement provision 24 64 13 Savings scheme 58 26 16 Healthcare provision 16 60 24 Life insurance 37 37 26 Disability protection 17 37 46 Critical illness protection 17 44 39 End of life care 39 28 33 Do you agree or disagree with the following statements about health and wellbeing of your workforce in the future (to 2020)? Rate on a scale of to where is strongly agree and is strongly disagree (% respondents) Strongly agree Somewhat agree Neither agree nor disagree Somewhat disagree Strongly disagree The health and wellbeing of our workforce will be an increasingly important issue for us as an employer 15 42 29 15 The state will play a reduced role in providing healthcare 33 38 15 Healthcare costs will increasingly fall on employers 36 38 15 Healthcare benefits will be increasingly important to employees 13 53 22 What will be your company’s main objective in offering retirement benefits by 2020? (% respondents) Employee retention 38 Attracting talent 24 Compliance 16 Workforce planning (managing when employees retire) 15 Wanting employees to have an adequate income in retirement Other (please specify) What will be your company’s main objective in offering retirement benefits by 2020? (% respondents) Employee retention 32 Attracting talent 24 Wanting employees to have an adequate income in retirement 17 Workforce planning (managing when employees retire) 15 Compliance 11 Other (please specify) 17 © The Economist Intelligence Unit Limited 2014 Confidence or Complacency? The implications of an ageing workforce in Germany What challenges are employers facing in making changes to their retirement benefits? Select up to three (% respondents) Cost of implementing changes 43 Growing costs (defined benefit plans) 43 Excessive regulation 32 Lack of bottom line benefit makes change hard to justify 25 Low levels of financial literacy/understanding amongst employers 23 Lack of tools to measure ROI to justify the costs 21 Managing the risk posed to the business (defined benefit plans) 20 Staff not have time or resources to manage retirement plans 16 Lack of tax incentives 14 Low levels of appreciation for retirement benefits among employees 13 Low levels of trust amongst employees for financial products Other, please specify Staff haven’t requested any changes so employers not need to make any What is the biggest challenge facing the system for retirement savings in the country in which you are based? (% respondents) Demographic changes (ageing population) 26 High costs for businesses providing pensions 16 Insufficient savings being made by individuals 13 Government deficits/debt (impact of austerity measures) 13 Unrealistic government entitlements (State pension, pension age) 11 Employers underestimating the future cost of promised benefits 11 Unrealistic expectations of individuals Too many people not working to or past the state retirement age Regulatory and legislative changes Not relevant for my country, our retirement system is sustainable Other, please specify 18 © The Economist Intelligence Unit Limited 2014 Confidence or Complacency? The implications of an ageing workforce in Germany Do you agree or disagree regarding the following statements about retirement provision in the future? Rate on a scale of to where is strongly agree and is strongly disagree (% respondents) Strongly agree Somewhat agree Neither agree nor disagree Somewhat disagree Strongly disagree It is not an employer’s role to help their employees to have a comfortable standard of living in retirement 11 44 35 Employers should bear the risk of providing for their retirement 24 56 11 As an employer, we are concerned about the reputational risk of workers reaching old age and not being able to retire 22 52 17 How you expect the number of employees aged 60+ to change by 2020? (% respondents) Increase significantly Increase 51 Remain the same 36 Decrease Decrease significantly Do you agree or disagree with the following statements about older workers? Rate on a scale of to where is strongly agree and is strongly disagree (% respondents) Strongly agree Somewhat agree Neither agree nor disagree Somewhat disagree Strongly disagree Older workers are less productive than younger workers are 15 47 29 Older workers have greater skills than younger workers 26 42 26 Older workers are less motivated than younger workers are 22 47 27 31 18 Older workers are easier to manage than younger workers are 16 49 Older workers take more time off for health reasons than younger workers 35 42 Which of the following you think is most likely to happen as a result of an ageing workforce? Select up to two (% respondents) Greater employee demand for benefits (healthcare, retirement and other benefits) 46 Increased flexible working (to provide care for older dependents, phased retirement, etc) 39 Higher costs of benefits 38 Progression of younger workers becomes more difficult 34 Greater risk of age discrimination claims 23 19 © The Economist Intelligence Unit Limited 2014 Confidence or Complacency? The implications of an ageing workforce in Germany Which of the following best describes your title? (% respondents) Board member CEO/President/Managing director 32 CFO/Treasurer/Comptroller 16 CIO/Technology director Other C-level executive SVP/VP/Director Head of business unit Head of department Manager 16 Other, please specify What is your primary job function? (% respondents) General management 36 Finance 23 Human resources 18 IT Operations and production Information and research Risk Strategy and business development Customer service Legal Marketing and sales Procurement R&D Supply-chain management Other 20 © The Economist Intelligence Unit Limited 2014 Confidence or Complacency? The implications of an ageing workforce in Germany How many employees does your company have globally? (% respondents) Less than 250 250-499 500-1,999 2,000+ 93 21 © The Economist Intelligence Unit Limited 2014 Confidence or Complacency? The implications of an ageing workforce in Germany What is your industry? (% respondents) Aerospace and Defence Automotive and Transportation Equipment Charities and Non-Profit Chemicals Communications Consumer goods Education Entertainment and media Financial Services: Banking 13 Financial Services: Insurance Financial Services: Other financial services Food and Beverage Government/Public sector Health Care Hospitality (Restaurant, Hotel/Lodging, Tourism and Leisure) IT and High Tech 13 Manufacturing 20 Natural Resources Oil & gas Pharmaceuticals Professional and Business Services Property and Construction Publishing and printing Retail Telecommunications Transportation Utilities Wholesale Other, please specify 22 © The Economist Intelligence Unit Limited 2014 Confidence or Complacency? The implications of an ageing workforce in Germany Please state which of the following best describes your company? (% respondents) Publicly listed 46 Government/State owned enterprise 23 Private Equity portfolio company 20 Other privately owned (partnership, limited liability, etc) 11 Family owned What are your organisation's global annual revenues? (% respondents) Less than €500m 34 €500m to €1bn 63 €1bn to €5bn 36 €5bn to €10bn 34 More than €10bn 14 23 © The Economist Intelligence Unit Limited 2014 While every effort has been taken to verify the accuracy of this information, The Economist Intelligence Unit Ltd cannot accept any responsibility or liability for reliance by any person on this report or any of the information, opinions or conclusions set out in this report LONDON 20 Cabot Square London E14 4QW United Kingdom Tel: (44.20) 7576 8000 Fax: (44.20) 7576 8500 E-mail: london@eiu.com NEW YORK 750 Third Avenue 5th Floor New York, NY 10017 United States Tel: (1.212) 554 0600 Fax: (1.212) 586 1181/2 E-mail: newyork@eiu.com HONG KONG 6001, Central Plaza 18 Harbour Road Wanchai Hong Kong Tel: (852) 2585 3888 Fax: (852) 2802 7638 E-mail: hongkong@eiu.com GENEVA Rue de l’Athénée 32 1206 Geneva Switzerland Tel: (41) 22 566 2470 Fax: (41) 22 346 93 47 E-mail: geneva@eiu.com [...]... work on prevention; this is the same for younger workers as well as older ones This is the way to prevent costs and have success in the future.” “We want to continuously invest in the qualifications of our employees, but there needs to be an interest from the 10 © The Economist Intelligence Unit Limited 2014 Confidence or Complacency? The implications of an ageing workforce in Germany Conclusion Germany. .. Employee retention 32 Attracting talent 24 Wanting employees to have an adequate income in retirement 17 Workforce planning (managing when employees retire) 15 Compliance 11 Other (please specify) 2 17 © The Economist Intelligence Unit Limited 2014 Confidence or Complacency? The implications of an ageing workforce in Germany What challenges are employers facing in making changes to their retirement benefits?... Intelligence Unit Limited 2014 Confidence or Complacency? The implications of an ageing workforce in Germany How many employees does your company have globally? (% respondents) Less than 250 0 250-499 0 500-1,999 7 2,000+ 93 21 © The Economist Intelligence Unit Limited 2014 Confidence or Complacency? The implications of an ageing workforce in Germany What is your industry? (% respondents) Aerospace and... rapidly ageing workforce, an imminent shortage of potential employees and less scope for manoeuvre than other countries in Europe Yet its executives are no more worried about demographic change than their counterparts in other countries This might sound like complacency But Germany reached its demographic tipping point before other countries and has been making the necessary adjustments for years Companies... challenges of demographic change; they have tried to do something about it and are learning from what in their experience works Confidence or Complacency? The implications of an ageing workforce in Germany Appendix: Survey results What would you say is the most important business priority for your organisation currently? Select up to two (% respondents) Cost control 63 Expansion 36 Restructuring 34 Innovation...Confidence or Complacency? The implications of an ageing workforce in Germany Case study Bosch and Siemens Home Appliances Group (BSH) is Europe’s largest manufacturer of home appliances It has six main factories in Germany making products under a range of brands Just under one-third (30%) of its workers are aged over 50, with 10% under 30 Over the last five years their average age has increased from... respondents) Offering more flexible working hours or working from home 77 Changing the employee benefits we offer 55 Ensuring that the skills of older employees remain up to date 48 Making physical changes to the workplace 45 Giving employees more choice over their benefits 45 Adapting our structure to ensure that older workers who reduce work hours or responsibilities retain their status within the company and... (compensation and benefits) 50 Motivation and engagement 43 Retention 39 Talent management and progression 39 Recruitment 27 Regulation (state/EU) 18 Skills shortages 16 Healthy workforce (health, stress and wellbeing) 14 Ageing workforce 14 Downsizing/offshoring 9 Diversity of workforce 9 Other (please specify) 0 13 © The Economist Intelligence Unit Limited 2014 Confidence or Complacency? The implications of an. .. just pay cash 20 In the future, we are more likely to give employees a cash allowance and let them choose what benefits they like 14 Other, please specify 0 16 © The Economist Intelligence Unit Limited 2014 Confidence or Complacency? The implications of an ageing workforce in Germany Who should be primarily responsible for providing and /or funding the following benefits? (% respondents) Individual Employer... implications of an ageing workforce in Germany What will be the main people (HR) issues you face as an employer by 2020? Select up to three (% respondents) Talent management and progression 50 Motivation and engagement 32 Cost control (compensation and benefits) 32 Retention 30 Ageing workforce 29 Recruitment 21 Healthy workforce (health, stress and wellbeing) 21 Skills shortages 20 Downsizing / offshoring 11 ... Confidence or Complacency? The implications of an ageing workforce in Germany connects with another of the survey’s findings: although many of them believe that workforce ageing will increase the cost of. .. of an ageing workforce in Germany Leading from the front? The economic and business implications of Europe’s ageing workforce are huge, and the demographic trends that will affect the continent... © The Economist Intelligence Unit Limited 2014 Ageing workforce Regulation (state/EU) Downsizing/ offshoring Diversity of workforce Confidence or Complacency? The implications of an ageing workforce