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8 Drivers of Change – Demographics

United Kingdom
Written by
Lewis Silkin, widely recognised as the UK’s leading specialist employment law practice.
Ageing populations alongside shifting generational compositions and priorities of workforces contribute significantly to the skills shortages experienced by employers in many sectors, with no short-term relief in sight. In the longer-term, as younger generations replace Baby Boomers in the workplace, their values and priorities will require many employers to adapt and will drive seismic political changes in the years ahead.

Ageing population

The first instalment of the UK 2021 census showed that low fertility rates and increasing life expectancy continue to contribute to an ageing population. This is the case across all G7 countries. Although the population of England and Wales increased by over 3.5% (over 3.52 million people) over the ten-year period since the previous census in 2011, this was largely due to the growth of the over 50s by 3.29 million. The over 65s now comprise 18.6% of the population of England and Wales, up from 16.4% ten years ago.

Life expectancy in the UK declined very slightly in 2020 due to the impact of increased mortality linked to Covid related deaths. The US has experienced a steeper fall. Although data from the Office of National Statistics (ONS) the possibility of continued increases in life expectancy once the major impact of the pandemic is over, in the UK at least, increased inequality of healthcare and growing poverty threaten to reverse years of increased life expectancy.

UK fertility rates increased slightly in 2021, from 1.58 births per woman to 1.61, but this remains in-line with the long-term trend of decreasing births per woman observed before the pandemic.

Baby boomer bulge

In many countries, including the UK, the ageing population and the skills shortage is being attributed, at least in part, to the “Baby Boomer bulge” – those born between 1946 and 1964. This “bulge” represents an age group with higher numbers than other age groups. The impact is that when this age group comes to retire, workforce numbers will decline because fewer workers will be entering the workforce at the younger end to replace them. However, the reality is more complex and varies from country to country.

In the EU, numbers in the 50- to 54-year-old age group are higher than other groups (a “Generation X bulge”). Nonetheless, this represents a ticking timebomb for those economies if skills shortages remain, highlighting the complexity of predicting labour supply in the years ahead.

In North America and the UK, there is less of a bulge at a particular age although numbers in age groups under 30 are much lower than in older groups, illustrating the impact of low fertility rates. The UK experienced a peak in numbers of births in the mid-sixties with fertility rates over 2.8 per woman between 1963 and 1966 before declining quite rapidly.

One sector in which this bulge is having a particularly significant impact in the UK is amongst GPs, with nearly a quarter of GPs over 55 years old. This threatens to worsen existing shortages in the years ahead.

The “Great Resignation” and the generations

The pandemic years resulted in many re-assessing their working lives, leading to the so-called “Great Resignation”. For some, particularly in younger generations, this resulted in a change of career. However, many countries saw an exodus from work, particularly in the over-50s. The UK has experienced an increase in the voluntarily economically inactive (i.e. those neither in work nor seeking work) of 160,000 amongst the 50-64 year olds (20.7% to 22.9%). The picture is similar in the US. 21% of the over-50s who retired since the beginning of the pandemic reported that the pandemic caused them to retire earlier than they would have otherwise done.

The Bank of England’s Chief Economist has even blamed surging inflation on the reduction in the labour force due to early retirement, rather than increased interest rates.

Unsurprisingly, the emerging cost of living crisis is causing some who elected to become economically inactive to rethink their decisions. As the cost of living crisis bites harder, many more may embark on “the Great Return”. In the three months to June 2022, the proportion of over 65s in employment returned to pre-pandemic levels and reached a peak of 11.9% before declining slightly. This is greatly up from around 5% at the beginning of the 21st century.


Over the last 12 months, more of the Baby Boomer generation have retired from the workforce, more Millennials have assumed positions of power and influence, and more Gen Zs have entered the workforce. The Future of Work Hub podcast explores the ongoing debate as to the generalisations which can be made about the values and behaviours of the different generations. However, the different attitudes ascribed to different generations undoubtedly contribute to the divisions in society which stray into the workplace.

A report by Benefex shows that employee expectations continue to rise in relation to every aspect of the employee experience, with 77% of employees reporting that their expectations of their employers have risen since the start of the pandemic. Expectations rose most significantly among employees under the age of 40, suggesting that younger employees are driving this change.

Deloitte’s 2022 annual survey of Gen Zs and Millennials provides a useful analysis of the attitudes of these generations to the changing world of work, finding that these generations’ priorities include “higher compensation, more flexibility, better work-life balance, increased learning and development opportunities, better mental health and wellness support, and a greater commitment from businesses to make a positive societal impact”.

Generational divisions can most clearly be seen in the changing voting patterns which promises to have profound implications for society and the world of work in the years ahead. General elections between 2010 and 2017 illustrate the difference in the values of the younger generations from the older generations, particularly in the UK where age is now the strongest correlator with political affiliation. This is mirrored in polling today. This change can also be seen from the percentage votes for Conservative and Labour at the 2019 and 2010 general elections, which were as follows:

It is also the case in the US that younger voters predominantly support the Democrats. 62% of the under 30s supported Joe Biden in the 2020 US Presidential election and this age correlation continued in the US at the mid-term elections with 63% of the under 30s voting democrat. However, in the US the voting patterns of the over 65s correlate less to one or other party.

Academic research is relatively inconclusive and inconsistent on the extent to which ageing influences a shift right in an individual’s political affiliation. However, it remains likely that the values and politics of today’s younger generations will generally stay with them as they get older.

Ethnic and racial diversity

The 2021 Census data on the ethnic diversity of the UK population shows that it is more racially diverse than a decade earlier. 81.7% of the population identify themselves as “white” down from 86% a decade ago. This increase in ethnic diversity is reinforced by other Census data released by the ONS which shows the numbers of UK residents born outside the country increased over the 10 years period since the previous census by a third, whereas the population only increased by 6.3%.

This greater diversity is and will continue to be seen at senior and managerial levels. A Thomson Reuters study at the end of 2021 found that 45% of FTSE 350 companies in the UK had a director of colour on their board, more than double the figure a year previously. However, this progress is still some way short of the government’s Parker Review which recommended that every FTSE 100 company should have a director of colour by 2021 and every FTSE 250 company by 2024. Representation from the black community is particularly poor with a Green Park review reporting that no FTSE 100 company had a black board director in a senior position.

Gender disadvantage and harassment

2021 saw further progress to increase gender representation on boards in large companies. By 2030, women are expected to constitute 40% of FTSE 350 board directors. It is already the case that nearly half of FTSE 100 board directors are women. In 2020, 37% of all board directors in Nordic countries were women, with the numbers rising significantly throughout the region over the previous five years.

Notwithstanding this progress, the workplace disadvantage that women are subjected to has continued to be headline news. Among the many examples, Aviva CEO Amanda Blanc was shocked by sexist remarks from shareholders and a female solicitor described by colleagues as a “ballbreaker” successfully brought a discrimination claim and was awarded £150,000. Pressure on employers from stakeholders, customers, investors, staff and prospective hires to take action to combat sexual harassment in the workplace continues.

The last 12 months has featured shocking revelations drawing further attention to the scale of harassment faced by women in the workplace. For example the Scottish Trades Union Congress reported that: 45% of women have experienced sexual harassment at work; one third of women have experienced sexual harassment at work within the last year; and 85% of women said that their report and experience was not taken seriously and dealt with appropriately. Female doctors in the UK launched an online campaign exposing gender-based discrimination, harassment and sexual assault in the healthcare sector, and an independent report into the culture in New South Wales’ Parliament in Australia uncovered examples of bullying and harassment.

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James Davies
Partner - United Kingdom
Lewis Silkin