Managing Demographic Risk

Managing Demographic Risk

          
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Managing Demographic Risk

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    In This Article
    • In the U.S. energy sector, more than a third of the workforce already is over 50 years old, and that age group is growing quickly.
    • The number of workers over the age of 50 in the Japanese financial services sector is projected to rise by 61 percent by 2020.
     

    Most executives in developed nations are vaguely aware that a major demographic shift is about to transform their societies and their companies—and assume there is little they can do about such a monumental change. They’re right in the first instance, wrong in the second.

    The statistics are compelling. In most developed economies, the workforce is steadily aging, a reflection of declining birth rates and the graying of the baby boom generation. The percentage of the U.S. workforce between the ages of 55 and 64, for example, is growing faster than any other age group.

    But statistics like these serve mainly to put managers on notice of a general problem. The important issue is the demographic risk your own firm faces. We offer here a systematic approach to analyzing future workforce supply and demand under different growth scenarios and on a job-by-job basis.

    This piece originally appeared in the Harvard Business Review in February, 2008.

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