Deploying older workers to boost UK GDP by 100 billion

21 September 2015 Consultancy.uk

The UK could boost its GDP by £100 billion by increasing the employment rate of workers aged 55-69, an analysis by PwC shows. PwC’s Golden Age Index shows that Iceland, just as in the previous two indexes, is the best performing country when it comes to harnessing the economic power of older workers, followed by New Zealand and Sweden. According to PwC, the UK can learn from Sweden as it is the EU country that has the highest employment rate of those older than 55 years.

In its ‘Golden Age Index’, professional services firm PwC explores the labour market impact of older workers (those aged 55-69) and measures how well countries are doing in harnessing the potential of these workers. The index is a weighted average of national performance of 34 OECD* countries on seven labour market indicators, including employment, earnings and training.

Key results of PwC Golden Age Index

The index shows that the Nordic countries are leading the way, taking three of the top five places. Iceland secured, just as the previous two indexes, the number one spot, with an index of 93.4, followed by New Zealand (79.9) and Sweden (78.2). Israel jumping seven places to fourth, and Norway closes the top five. Japan, which was found on third place in 2007, fell six places to ninth place.

Turkey has the lowest score on the index, having dropped two places to thirty-fourth, followed by Slovenia (down from twenty-seventh place) and Luxembourg. The Slovak Republic, which was the lowest scoring country in 2007, saw its index place improve and is now found in twenty-eight place.

UK Golden Age Index

The UK is found in nineteenth place, a spot it has retained since the 2007 index – when it fell from its sixteenth place in 2003. The country has seen its index score improve over the last decade, from 50.3 in 2003 to 53.6 in 2007 and 58.1 in 2013. While this is the case, the country is still an average player as the OECD average also increased.   

For less well scoring EU countries, Sweden can be seen as an example, as it has the highest employment rates for older workers in the EU. According to PwC, if the employment rate for workers aged 55-69 in the UK (50%) could match that of Sweden (69%), the UK could boost its GDP by 5.4%, which equals £100 billion. “We estimate that by adopting the policies and business practices in the highest performing countries like Sweden, the UK could boost its GDP by around 5% in the long run, equivalent to around £100 billion at today’s values. This would also boost annual tax revenues and reduce benefit spending significantly, helping to meet the long term health, social care and state pension costs of an ageing population,” explains John Hawksworth, PwC’s Chief Economist.

Potential 100 billion GDP boost for UK

“This group of workers is too often over-looked by businesses and Government, but our research shows there could be big gains for the UK economy from policies directed at keeping people skilled and motivated to stay in the workforce for longer,” adds Jon Andrews, Head of PwC’s Global People and Organisation practice.

He goes on to say: “Businesses should be thinking about how they can utilise the skills and experience of older workers. More flexibility, job redesign, career breaks and role shifts could help engage this generation and keep them in the workforce for longer. Training, promotions and performance management should not tail away at 50.  More should be done to focus on how we can drive innovation and productivity by harnessing the diversity that results from having a broader range of generations working together. Retirement no longer needs to be a one-time event; we could easily see the rise of the part-time pensioner.”

* OECD = Organisation for Economic Co-operation and Development.

The index shows that the Nordic countries are leading the way, taking three of the top five places. Iceland secured, just as the previous two indexes, the number one spot, with an index of 93.4, followed by New Zealand (79.9) and Sweden (78.2). Israel jumping seven places to fourth, and Norway closes the top five. Japan, which was found on third place in 2007, fell six places to ninth place.The index shows that the Nordic countries are leading the way, taking three of the top five places. Iceland secured, just as the previous two indexes, the number one spot, with an index of 93.4, followed by New Zealand (79.9) and Sweden (78.2). Israel jumping seven places to fourth, and Norway closes the top five. Japan, which was found on third place in 2007, fell six places to ninth place. 

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Why leaders must balance technical expertise with soft skills

17 April 2019 Consultancy.uk

Soft skills matter in the workplace just as much as technical expertise, writes Samantha Caine, Managing Director of Business Linked Teams.

For too long technical expertise has been seen as the marker of a strong candidate for development into a sales or leadership position. Sales and leadership candidates are tasked with demonstrating a diverse and wide-ranging set of technical skills, yet their aptitude in these technical skills or ‘hard skills’ cannot signify great leadership potential. This is why a healthy balance of soft skills and technical ability is required. 

So what exactly is the difference between technical skills and soft skills? In engineering, it’s crucial to demonstrate knowledge of physics as well as a strong grasp on mathematical equations. Yet, in any industry, it’s important for leaders to be able to interact with other people effectively with soft skills like communication, empathy and adaptability. 

Business Linked Team’s 2018 study into internal leadership development revealed that 69% of large organisations are prioritising the identification and development of future leaders from within the workforce. As more and more organisations begin to invest in sales or leadership development within their existing workforces, more focus needs to be placed on ensuring the right soft skills are in place. 

With those soft skills in place throughout the workforce, the business will benefit from a wider pool of potential leaders developing under their noses, and it should be the same where sales candidates are concerned. 

It’s not just about easier access to ideal candidates for these positions without the rigmarole of recruiting from outside of the organisation. The leadership development study also found that 89% of HR decision makers say succession planning has become a top priority. Those currently serving in leadership positions can’t lead forever and the same goes for those generating sales for the business.

Why leaders must balance technical expertise with soft skills

From people leaving for new opportunities or retirement, to people simply stepping aside to focus on other areas of the business, successful leaders and salespeople require experienced and capable successors that will be ready and able to confidently step into their shoes and pick up the mantle without the business experiencing any lapse in performance.

Soft skills make stronger candidates

When it comes to the soft skills required, a strong leader must be able to manage through clear communication and effective time management, coaching and goal setting. They must be able to demonstrate empathy and empower their teams to be successful, productive and fully engaged. And beyond simply giving direction, they must also be able to take direction from those above them and cascade the business strategy down through their teams. 

A strong sales candidate must possess the ability to communicate value to the customer, negotiate well and protect margin or the ability to increase the scope of a particular sales opportunity. 

With the relevant soft skills in place, the business will benefit from increased productivity, greater agility against changing market conditions and greater transparency. In turn, this will provide visibility on issues and inefficiencies while removing opportunity for miscommunication. All of this can transform the culture of a department, improving employee satisfaction and reducing staff turnover. 

Ultimately, developing leadership or sales candidates will require the business to strike the right balance between technical skills and soft skills, and this requires an effective and sustained learning journey.

A balanced learning journey

Facilitating and supporting the development of leadership and sales is best achieved by establishing training groups. By cultivating training groups, businesses are creating talent pools that will inspire and support each other on the learning journey. However, personal goals and learning objectives must be defined for each individual based on their own existing skillsets and the skills that each individual needs to develop. 

With the emergence of e-learning, businesses recognise the value of online-based learning activities, yet many make the mistake of opting for one-size-fits-all solutions which are solely focused on self-study. A development solution will only deliver true return on investment if it combines e-learning activities with group learning activities that provide opportunity for shared experiences and support.

A blended learning solution that combines self-study and face-to-face group learning activities will aid strong development of the talent pool through shared experiences. Through these shared experiences, those undergoing the training will organically develop a support network that supports the development of the group as much as it supports the development of each individual. 

The blended learning approach is supported by one of the seven principles of human learning that socially supported interactions aid the individual development of expertise, metacognitive skills, and formation of the learner’s sense of self. The strongest opportunities for development can be unlocked by blending workshops with online activities such as virtual sessions, peer coaching, self-study, online games and business simulations. But it’s crucial to provide a blend of one-to-one and group sessions too.

Beyond delivering a better learning outcome for the employee, the blended learning approach allows organisations to adapt their training quickly and easily to shifting business demands in an ever-changing landscape.