Considering the Demographic Structure as an Impact on Business Planning

Abstract:

Within the last 150 years lifespan in industrialised countries increased by 2.5 years per decade. About 25 years ago circa 75 percent of men in the age of 55 to 64 were working. Nowadays this group declined to 40 percent. [Mull00] An increasing number of people in their sixties is fit and healthy. Some even start to go to university again. Hence it should be possible to keep them and their experience in the working process. Advanced retirement was a measure to reduce the rate of unemployment. Additionally, the number of people that are in a fulltime job decreased. Although, productivity increases a soaring number of companies will depend on employing people longer. [Bräu05] Within the last decades the average time of receiving retirement payment increased from four to 16 years – along with the decline in the birth rate this generates a tremendous challenge for pension funds. The effects observed so far show that – from a macroeconomic point of view – there is serious need to keep elder people employed. The question is why this group is not employed any more. This is mainly based on the argument that employees older that 55 receive higher wages than there younger colleagues while their value contribution is presumed to be lower. This calculates to deficits for employers. But what is an appropriate wage for this target group? Several authors claim that wages merely based on age are not adequate since elder people are less efficient and more likely to sicken. Benefits which are not balanced by productivity increase the cost of employment and result in a lower employment rate. [Bräu05] However, at present no study could be found that investigates the real contribution of an employee to a company’s success. Issues like experience or knowledge transfer are neglected so far. Unfortunately, the problem has not even been comprehensively addressed in literature. Moreover, managers nowadays face a steadily increasing amount of information, most of which is operational [SiWW02]. Thus some major questions remain: How does the overall development impact the individual company? What measures can be taken to ease this impact? And, if at all possible, how can this trend be used to generate more customers and/or better services?