As businesses strive to maintain productivity and foster a positive workplace environment, they face growing challenges associated with an ageing workforce and rising mental health issues among younger employees.
These demographic shifts introduce complex dynamics that impact employee wellbeing, workplace culture, and overall organisational sustainability.
The ageing workforce: A new reality
The UK workforce is rapidly ageing, with many employees working past traditional retirement age due to
economic pressures, longer life expectancies, and insufficient pension savings. According to recent data from Barnett Waddingham (1), nearly half (48%) of workers with a defined contribution (DC) pension lack confidence in a comfortable retirement, leading some to postpone retirement or re-enter the workforce.
This trend demands that employers offer robust benefits packages that address financial security and healthcare needs.
Challenges of an age-diverse workforce
An ageing workforce brings specific considerations that impact both individual employees and organisational performance. Older workers often possess valuable skills that are crucial to business success, yet employers report a widening skills gap as younger employees may lack comparable experience.
Government statistics indicate a steady increase in the employment rate among those aged 50-64, highlighting the need for an age-diverse workforce strategy.
With age can come health challenges, which employers are already noting. Older employees have higher rates of long-term sickness, impacting absenteeism and productivity. In fact, 78% of employers cite absenteeism due to health issues as a primary concern associated with an ageing workforce. Moreover, this demographic shift can affect workplace culture if not addressed with supportive policies and an inclusive environment.
Younger workers and mental health: A growing concern
In contrast to the challenges posed by an ageing workforce, younger employees face escalating mental health issues, which affect their engagement and productivity. Reports from the Office for National Statistics (2) show a significant rise in work-related mental health conditions among young people, with over 1.3 million economically inactive individuals citing mental health issues as the reason. This trend has led employers to implement wellness programs to support mental health, with 64% reporting an increase in mental health-related absenteeism.
For businesses, this mental health trend creates an urgent need to provide appropriate support structures. Early intervention and mental health training for managers can play a critical role, equipping workplaces to address these challenges proactively. However, recent findings suggest a gap in data collection on mental health within many organisations, hindering the ability to make data-driven decisions for effective support.
Are employers truly prepared?
Many employers believe they are equipped to manage both an ageing workforce and rising mental health
challenges among younger employees. However, evidence suggests a disconnect between perceived
preparedness and actual readiness. A survey of business leaders revealed that while 73% felt prepared to
handle an ageing workforce, far fewer actively monitor key health indicators that would enable informed,
proactive interventions.
Employers should consider expanding their data collection on workplace health and wellbeing indicators. This data can offer essential insights to tailor support initiatives, such as mental health support programs or flexible working arrangements, ensuring that these benefits align with the evolving needs of the workforce.
Steps businesses can take
To navigate the complexities posed by generational challenges, companies should focus on several strategic initiatives:
- Enhanced data collection and analysis: Gathering data on workforce health and wellbeing helps
employers understand the specific needs of their employees. This information is foundational for developing targeted programs that resonate with both older and younger employees. - Flexible benefits packages: Providing benefits that cater to both age groups can improve engagement and satisfaction. Flexibility in job roles, hours, and locations are among the top adjustments employers are implementing to accommodate the needs of different demographics.
- Mental health support: Mental health training for managers and access to mental health resources are critical in addressing the challenges faced by younger workers. With adequate support, businesses can help employees better manage their mental health, ultimately reducing absenteeism and enhancing productivity.
- Addressing the skills gap: Older employees often hold skills that are difficult to replace, making training and mentorship programs essential. These programs can bridge the gap between younger and older workers, facilitating knowledge transfer and creating a more cohesive, productive work environment.
Building a resilient workforce for the future
As the workforce demographic landscape shifts, businesses must adapt to the challenges presented by both an ageing population and the mental health needs of younger employees. By prioritising data-driven approaches and offering flexible, inclusive support programs, companies can cultivate a more resilient workforce. This approach benefits not only employee wellbeing but also organisational sustainability, enabling businesses to navigate future challenges with greater agility and insight.
About the author:
Julia Turney is a Partner and Head of Platform and Benefits at Barnett Waddingham (BW). With extensive
experience in the UK benefits market, she is responsible for developing BW’s workplace savings proposition, with a focus on online benefits delivery and employee engagement solutions. Julia specialises in workplace reward strategies and flexible benefits management, working closely with clients to educate and engage employees across the wealth and health benefit landscape. She supports organisations in crafting benefit strategies that align with business goals and resonate with employee values.
References:
1. https://www.barnett-waddingham.co.uk/edna-articles/
2.https://www.ons.gov.uk/employmentandlabourmarket/peoplenotinwork/economicinactivity/articles/risingillhealthandeconomicinactivitybecauseoflongtermsicknessuk/2019to2023
