ageing population question

This essay aims to debate the relevance of certain socio-demographics on business and how it affects them. The socio-demographic factor that will be focused on in this essay will be the ageing population.  This essay seeks to define ageing population and demonstrate the affects an ageing population has on business 

This will be done by assessing the pro's, con's and subsequent oppurtunities and threats that this changing demographic poses. Theory and examples will be used throughout to help explain the relevance this paticular demographic has on business. 

often the idea of 'ageing' is viewed in different ways, therefore it is difficult to objectify exactly what an ageing population is. Ageing is considered as a social construct and changes depending on which country you are in, for example people who live in more developed countries such as the uk live much longer than those in third world war torn countries. 

According to the UN (2011), an ageing population is "when the proportion of over 60's reaches 7%" It can also be defined as "a growing number of proportion of people at the top end of the age structure who are above the retirement age" (whetherly and otter, 2014) From these definitons we can determine that the uk is an ageing population as 23% of the population is 60 and above (UN,2015) 

There are many reasons as to why the population is ageing. Some may argue that is due to the declining fertilitity rate, as the world's total fertility rate (that is the number of children born per woman) fell from 5 children per woman in 1950 to roughly 2.5 today. Aa families have fewer children, the older-age share of the population naturally increases 

Along with this there is a continuous fall in mortality rates since 1990 (the daily mail online). This is largely due to medical and technological advancements. Illnesses that are minor today were detrimental 80 years ago, along with the fact that most people in developed counties have a much better standard of living. Thus increasing the average 'older person's' longevity, as global life expectancy has risen 48 years in 1950 to 8 in 2005, and is expected to reach 75 years in 2050 (UN,2015) 

guilemard's (2001) "threefold life course model" would support these arguments, as it shows that people are living life ver differently today to how they did years ago. The traditional model shows 3 sucessfive stages to lif : education, work and then retirement. Usually people retired around the age of 60 to 65, however people often retire later, this is because people can become boed when they retire or some may not be able to afford to voluntary retire. 

Furthermore, people are often staying in education much longer and many even do this alongside their career. According to the UN 1 in 8 people were aged 60+ in 2015, and that by 2030, older persons are expected to account for more than 25% of the population in europe and north america. This unquestionably makes the UK's population an ageing on and it is predicted to grow further. 

the affects of an ageing population can provide opportunities for business in a few ways. The growth of the ageing population can provide a new or increasing target market, as the 'grey pound accounts for almost 50% of consumer spending' (thismoney, 2014) This is because people above the ages of sixy tend to have more disposable income, because many have little to no mortgage left to pay off and no childen who are financially dependent on them. 

This essentially means that elderly people have more money to spend on products and services. Mark's and spencer promotes its clothing range towards the ageing population and has disclosed better than expected half-year profits, in part driven by the success of its clothing range. Therefore, if a business's target market continues to grow this can only be benefical however business's must be willing to counter increased competiton from other business's in this market. 

The ageing population can also provide many benefits for organisations paticulary when it comes to staffing. Older staff can be very knowledgeable and experienced in their feild, these people can provide excellent customer service and are much more likely to be loyal to a company and not leave (CIPD, 2014) 

an example of a company who benefit from an ageing population is ASDA, who has over 20,000 employees who are over 50, thus representing 19% if their workforce (BBC,2002).  This enables ASDA to mirror its customer base, which in turn can help to increase sales as staff can provide good services to customers. 

from this example we can see the relevance of the ageing population to business as they are able to use older workers skills to their advantage. Companies also use 'elderly' celebrities to advertise products for the older population, for example L'Oréal, features Jane Fonda aged 69, as the face of its television advertisements. 

However CIPD (2014) also found that the older employees are sometimes less adaptable to technological change and more difficult to manage. Futhermore elderly people can misunderstand some of the younger workforce due to lack of shared interest and thus decrease the communication within the organisation. They are also costlier to a company due to pay rates and their level of experience. Nevertheless, as default retirement age is becoming a thing of the past, many business's will have to make room for elderly workers. 

it is not only their spending ability and employability that can affects businesse. Saga (2010) suggest that the over 50's catagory potentially have more political power, given that the over 55's are three times more likely to vote that the under 25's. The party in powe has a massive effect on business depending on what legislation they put in place along with taxation rates, for example 1 in 4 people aged 65+ voted conservative in the last general election, and this party is arguably better for business due to their policies 

Furthemore in the 2016 EU referendum over 65's were twice as likely as under 25's to vote to leave the EU. Essentially the older population has more power to affect business's due to their growing politicial influence, whether the company benefits from this is out of their hands 

in conclusion, we can see that an ageing population is highly relevant to business, as it can provide massive opportunities to companies, from experienced staffing to an increased customer base. The threats of increased wages, inability to adapt and change as well as increased completion in their growing segment should also be considered 

however regardless to whether an ageing population is a good or bad thing it is important to note that the effects of this increasing demographic are inevitable. Business's must be willing to cater for the older population, as the business's in the examples are already. 

however regardless to whether an ageing population is a good or bad thing it is important to note that the effects of this increasing demographic are inevitable. Business's must be willing to cater for the older population, as the business's in the examples are already.