Shifting Roles of Management in Society

Aging Workforce Demographics

Overview

Exploring the impact of changing demographics, such as aging workforces in many developed countries, growing youth populations in others, urbanization, etc.

At least three major themes characterize the impact of changing demographics on management. First is the millennials. According to PwC, “millennials already form 25% of the workforce in the US and account for over half of the population in India. By 2020, millennials will form 50% of the global workforce.” Millennials are not only the largest generational group, they are also the most diverse, making it difficult to generalize about their impact on the workplace. Nonetheless, studies have documented that millennials are more accustomed to using technology and are less comfortable with rigid structures and corporate silos. They tend to expect to learn and advance quickly in organizations and require regular feedback and encouragement.

The second major theme is population aging. According to the United Nations Population Division, “over the first half of the current century, the global population 60 or over is projected to expand by more than three times to reach nearly 2 billion in 2050,” and “the older population is growing faster than the total population in practically all regions of the world―and the difference in growth rates is increasing”. To be sure, population aging is not happening everywhere. According to a UNICEF report, “an estimated 1.8 billion births will take place in Africa in the next 35 years, the authors predict. By 2050, Africa will have almost 1 billion children under 18, making up nearly 40 percent of kids worldwide.”

To begin isolating the impact of aging on management, consider a special report on demography by the Economist, which points out that “South Korea is ageing faster than any other country in the OECD.” In 2012, almost 12 percent of the population was aged 65 or over, and “by 2030 that proportion will double.” This has created a number of issues for Korea, including an increasing financial burden to shrinking numbers of working-age Koreans and difficulties staffing the military. In the workplace, the average white-collar worker is “eased out just before his 54th birthday.” In a culture where workers typically stay with one company for their career, pay tends to rise more quickly than productivity, and over 57 percent of employers cite “low adaptability to change” as a reason for not keeping older workers. The point is that accelerating change and low adaptability have made it difficult for Korea to take better advantage of its older workers. While the socioeconomic conditions might vary, the South Korean story is being repeated in other parts of the world.

The third big story in demography’s impact on management is urbanization, which is continuing globally. According to the United Nations Economic and Social Affairs Department, in 2014, 54 percent of the world’s population is residing in urban areas in 2014. That figure is up from 30 percent in 1950, and by 2050, 66 percent of the world’s population is projected to be urban. “Just three countries—India, China and Nigeria—together are expected to account for 37 per cent of the projected growth of the world’s urban population between 2014 and 2050. India is projected to add 404 million urban dwellers, China 292 million and Nigeria 212 million.”

Related Resources

Actively Closing the Gaps
Chin-Tarn Lee, dean of the National Sun Yat-sen University College of Management, believes business schools are challenged to close generational, institutional, and industry gaps, but are up to the challenge.

What's Next: Future Global Trends Affecting Your Organization - Evolution of Work and the Worker
The SHRM Foundation published this report in 2014, which on pages 10-12, looks at demographic changes (primarily age) across the world.

Millennials at Work: Reshaping the Workplace
This report by PWC aims to provide insight into the minds of new graduates from around the world entering the workforce for the first time.

World Population Aging: 1950-2050, United Nations Department of Economic and Social Affairs Population Division
This report from the United Nations Population Division provides a description of global trends in population aging and includes a series of indicators of the aging process by development regions, major areas, regions and countries.

Generation 2030 Africa
This report by UNICEF focuses on Africa's population, economics, urbanization, and other key areas. It offers data and analysis, and raises policy issues intended to foster debate and discussion and influence decisions in the coming years.

World Urbanization Prospects
This report from the United Nations Department of Economic and Social Affairs presents the highlights of the 2014 Revision of World Urbanization Prospects, which contains the latest estimates of the urban and rural populations of 233 countries or areas from 1950 to 2014 and projections to 2050, as well as estimates of population size from 1950 to 2014 and projections to 2030 for all urban agglomerations with 300,000 inhabitants or more in 2014.


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