Impact of ageing workforce on small businesses in UK

Order Description

Introduction
Demographic trends in UK clearly indicate there is an issue of ageing workforce increase which brings both benefits and challenges mainly in small medium size businesses (CIPD, 2014). Statistics featured in the literature by Feyrer (2009) indicate that the UK’s population that is above 65 years will increase by 12 percent between 2015 and 2020. It also shows that the population above 85 years will increase by 18 percent with centenarians’ umbers increasing by 40 percent. In a country where the general population is projected to increase by 3 percent, the ageing population continues to pose serious impacts on the labour structure of small businesses.

Background of the Study
According to Dhanjal and Schirle (2014), the UK experienced an increase in birth rates after the World War II. The increased birth rates caused substantial increase in the size of the country’s workforce in the years after the war. Decades later, the workforce has aged, posing challenges to the federal government, the local state and small businesses. In most sections of the UK’s economy, it is hard to predict the return value of investments made to projects relating to senior citizens, especially on an institution basis. In this paper, the value of an old worker to a business is explained to provide an understanding of the implications when they retire.

Rationale of the study
The UK’s population increase after World War II is responsible for the sprouting of multiple small businesses in town and the countryside. To date, these businesses are run by the workforce that was present during establishment. However, age is catching up with them and they are impacting the businesses in a variety of ways, some negative, others positive. Again, the retirement of the senior citizens leaves a gap that most small businesses find hard to fill. Business planning depends on the proper allocation of resources. But to plan for the resources, the business requires to establish their nature and the period for which they will be beneficial to it. This study will bring to light the nature of an ageing workforce and establish how it impacts small businesses in UK (Dhanjal and Schirle 2014).

Aims of the study
a) To explore the impact, negative or positive, of an ageing workforce upon small businesses in the UK.
Research objectives
a) To identify the factors leading contributing to an aged workforce on small businesses in the UK.
b) To explore the benefits from employing an older workforce in a small business.

Relevance of the study
This study is vital to all small businesses in the UK. It hints the characteristics of a population in which the senior citizens occupy the larger part of the workforce. The relationship of an ageing population with other hitches like low returns from training creates a dilemma for small businesses especially because it marks the first stage of retirement for the group of worker born after the World War II. The study is also significant because it will offer a clarification which can be applied on a variety of cases that rely on demographics of age to formulate solutions. More imperative is the exploration of health and physical abilities of senior citizens in comparison to younger population. Human resource departments will find their work cut down when deciding the correct allocation of laborers of different ages.
The loss of senior citizens by small businesses in the UK due to illness and early retirement will be avoided through the establishment of the best ways to maintain the workers at different ages. Additionally, the study will also provide alternatives to balancing the age difference in the workforce for a small business. Therefore, the study will be able to impact to a large extent the employee turnover rate in small businesses. The study will impact the process of business planning in terms of resource allocation.
For a small business, planning requires an extensive knowledge of the resources at hand and the timeliness of their relevance to the enterprise. The study will therefore cover the issue of ageing population and its impact on small businesses extensively by the use of secondary research methods. By collation and synthesis of the work done on the subject, this study will form a systematic view. The various statistical techniques for meta-analysis will be used to form a report-like and ready-to-use approach for small businesses in the UK.
The structure of the dissertation
The structure for this study began with Chapter 1, which introduces the topic and provided the study background. It also presented the research problem, and highlighted the aims. Chapter 2 will present an in-depth analysis and critical evaluation of the previous studies and published articles on the topic, in order present and compare the views of different authors. Chapter 3, will outline the research techniques adopted in this research. The data findings and presentation of results will be conveyed in Chapter 4 and later discussed in chapter five before the conclusion

Literature review

Age is important in the productivity of any human resource in any department and across all the countries in the world. Therefore, the managers and employers in the private sector should take a keen interest in the trends taken by the age of their workforce. This fact is dictated by the trend that the population age pyramid of a country has taken (Feyrer 2009). This paper therefore examines the impacts of an ageing workforce to the small business sector in the UK and the role that is expected to be played by the entrepreneurs to maximize their productivity while, at the same time, preparing the workforce for the life after job retirement.

Main Body
The major challenges associated with the transition to the 21st century is how to prepare the workforce for the in the acquisition of new skills (Institute of medicine (U.S) 2008). Another one is the adoption process of new ways to relate to the patients and at the same time for each other (Feyrer 2009). It is therefore necessary to determine the needs of the population that is above 60 years and hence what shapes the workforce for these individuals.

The demographic changes are forcing the managers of small medium enterprises to have seriously reevaluate their workforce in terms of how they encourage and retain both the younger and older workers simultaneously (CIPD, 2014). It is evident that more Britons are working longer into their old age and that employers are having to become increasingly skilled at managing an ageing workforce (CIPD,2014). Ageing population is giving rise to an increasingly age diverse labour market and small businesses are doing enough to attract the workers of different ages and unlock the benefits they bring in (CIPD 2014).

As most of the population of a country gets old, their retirement age moves closer; a situation that increases their chances of venturing into the business sector as explained by Institute of medicine (U.S). (2008). At the same time, the skills that older workforce impact on the youths in the workforce is great hence the improved productivity in nearly all the sectors of the economy. Throughout the working period, the workforce should be prepared to, for retirement. There should also be accessibility to information by the workforce in any sector irrespective of their stages in life. Such an approach helps to meet the optimum productivity while at the same time the employees feel motivated in their retirement plan as soon as their time reaches. This move is helpful to such employees since it boosts their mind and helps them to make informed choices regarding their savings. It can also be healthy as it informs them on key issues like the exercises on their bodies for physical fitness. (institute of medicine (U.S,) 2008)

UK reform supporting longer working lives, since 6th April 2011 there is no longer legal retirement age issue notification under DRA procedure. This was introduced to prevent age discrimination and allow skilled and capable people to work and have right choice (R Lee & J Stephens, 2014). Even though DRA has been abolished 60% of small businesses have been recruited people over 65+.Hence it explains why only 5% of ageing worker in UK falls under 65+ age bracket (CROW, 2013).

The removal of DRA now gives employees the right to work beyond DRA and prevents employee’s dismissing. The SME’s are impacted and adversely affected. As vickerstaff (2003) observers, changes in retirement behavior will therefore mainly originates from demand side i.e. employee’s policies. In order to enable longer working lives it is necessary to understand the circumstances which facilitate sustained working and role played by the employers (WERS,2014)

With an increasing life expectancy of individuals especially in the European countries, more individuals are now forced to work beyond the earlier retirement age just to keep themselves active and physically fit (Institute of medicine (U.S). 2008). Due to this, employers should thus prepare to combat serious cases like that of cancer, diabetes and other related disorders associated with age (Aviva.co.uk. 2016). This therefore calls for these quick measures to be put in place by employers since the expertise and the experience that they get from such employees has improved the productivity in the recent past.

According to the Aviva report, the requirement of the employees changes with time and the employers should thus cope with the rising needs of such older people at the workplace. This ranges from having private insurance to the introduction of the flexible hours of working (Aviva.co.uk. 2016). This is an initiative in the current UK country so that the favourable working conditions can be introduced for such vulnerable workers. It is therefore important to improve the working condition of the ageing workforce through training that should impart on them the knowledge to identify signs of serious disease in their lives.

One of the significant barriers which older workers face is acquiring and maintaining employment is the perception that old worker’s skill is out of date and older workers themselves are unwilling to take part in training(HWL,2015) but on the other side it is also evident that, Small businesses showed the most employees agreed that training and development is critical for the better productivity for older workers up to the age 60 & beyond (Lee & Steepens, 2014).

Currently, it is becoming very normal to extend the retirement age due to lack of proper decision-making approaches that lives them with fewer savings. In addition, there has been a notion that delayed retirement is correlated to a positive and healthy life, a situation that has made many older people in the US to remain working as opposed to the past (Institute of medicine (U.S). 2008).

For the small businesses to embrace the growing number of old-age employees, they should introduce a more open mind on dialogue and serious plans for future forecasting (Lobel, 2016; McDaniels 2013). Small businesses also have experienced an increase interest in mature employees to work later in life, the majority (65%) believe it comes down to mature employees wanting to continue funding their existing lifestyle and over half (55%) believe it’s because they want to top up their pension/retirement fund or because they would like to continue experiencing personal fulfilment from work(CIPD,2014).

This can serve to improve the lives of these individuals of old age currently working in the UK by helping them to plan for the changes in the lifestyles. According to a research conducted in the UK by the Open University Business School, most of the working class have never received any education on the financial issues (Lobel, 2016). This has contributed by worsening the condition of the ageing workforce when they finally retire. Again, there is a growing interest from the employees in the UK to get financial help from their various employers for them to have better ways of managing their lives at old age

Conclusion
The causes of ageing in the population are almost similar in all the countries across the world. The facts create challenges as well as the opportunities (Dhanjal & Schirle 2014). These opportunities and challenges are brought by various factors ranging from the economic ones to the epidemiological realities and lastly the social factors that are related to the age (McDaniels 2013). This does not exclude the HIV epidemic in African countries, Europe economic crisis, market economy challenges of China and the migration of youths to towns in the less developed countries of the world (LDCs).

Many Small Medium Enterprises are actively encouraging older employees to extend working life (HWL, 2015). One of the major concern of small medium enterprises is managing health and well-being of their employees. It is extremely important to analyses the impact of changing health condition of the employees on work. Physical health does decline with age but does not decline in a uniform way. 41% of older workers aged between 50-65 have at least one health issue which limits their activities, most are able to continue work with moderate support from their employers (CIPD, 2010).

References
Chartered Institute of Personnel and Development., 2014.Age diversity in SMEs, reaping the benefits. Survey report, London: CIPD. [online] Available at: https://www.cipd.co.uk/hr-resources/survey-reports/ [accessed November 2015].

Chartered Institute of Personnel and Development., 2010.Managing an ageing workforce, how employers are adapting to an older labour market. London: CIPD. [online] Available at: https://www.cipd.co.uk/ [accessed November 2015]

Chartered Institute of Personnel and Development., 2012. managing-a-healthy-ageing-workforce-a-national-business-imperative. London: CIPD. [online] Available at: https://www.cipd.co.uk/ [accessed November 2015].

Healthy Working Lives., 2015.Managing healthy ageing workforces: a small and medium sized enterprise business imperative. A guide for employees, London: HWL. [online] Available at: https://www.healthyworkinglives.com [accessed November 2015].
Aviva.co.uk. (2016). Ageing workforce health issues to impact UK business – Aviva. [online] Available at: https://www.aviva.co.uk/media-centre/story/16996/ageing-workforce-health-issues-to-impact-uk-busine/ [Accessed 4 Jul. 2016].
Dhanjal, S., & Schirle, T. (2014). Workforce aging and labour market opportunities of youth: Evidence from Canada. Toronto: Harpercollins publishers.

Feyrer, J. (2009). The US productivity slowdown, the baby boom, and management
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Institute of medicine (U.S). (2008). Retooling for an aging America: Building the health
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Lobel, B. (2016). Why the cost of energy can hamper business success. Small Business. Retrieved 5 July 2016, from https://smallbusiness.co.uk/why-the-cost-of-energy-can-hamper-business-success-2517716/

McDaniels, S. (2013). Global Ageing in the Twenty-First Century: Challenges, Opportunities and implications. Farnham: Ashgate pub.