Is your eye on the workforce cliff?

By: Gary Browning | Date: 20-07-2015

Tagged as: ArticleGameplanRecruitmentEfficiency


Most businesses emerged from the recession leaner and more efficient – but, as Gary Browning, Chief Executive of HR consultancy Penna explains, a growth environment presents a new efficiency challenge.

Gary Browning

Gary Browning joined Penna in 2002 and was appointed Chief Executive in 2005. He consults on a wide array of talent management issues, with particular interest areas in engagement strategies, leadership development and HR due diligence.

Gary Browning


Efficiency isn't just a buzzword for today's businesses. We all saw its value in the midst of the economic crisis: unemployment in the UK didn't reach the levels feared because companies displayed real innovation in the way they deployed their talent to mitigate wholesale redundancies.

Growth has returned, and we now face a new challenge. In the UK, and in much of Europe, what's been dubbed the 'workforce cliff' is looming: the point at which we simply don't have enough available workforce to drive further growth. This brings efficiency back into sharp focus.

The population challenge

An ageing population is a key contributor to the workforce cliff scenario, as research from the European Commission1 has highlighted. It means we don't have access to the skills and talent we need long-term, and it will have an impact across the spectrum of industry.

If we look at pre-recession figures, roughly half of a healthy 2% of annual GDP growth comes from employment growth. The problem now is that an ageing population means the 1% of new workforce soon won't be available. We need to tackle that – but also enhance the other side of the equation, the remaining 1% that comes from productivity gains.

Here and now

The workforce cliff isn't an abstract, future issue. It's happening right now, according to the European Commission research. In the Netherlands, potentially as soon as this year; in Germany next year; Britain has a little longer to wait, but we are due to hit the cliff edge in 2023. Tackling the 1% employment growth challenge is a massive challenge at national level and will take time. But what we as businesses can all do is drive efficiency up to help to maintain a healthy level of GDP growth.

Some of those gains will come through technology. Clearly, efficiency gains are often made through better use of the technology available to us, but talent is very much in the mix. True efficiency relies on having the talent to develop new, innovative technological and operational solutions.

Filling the gaps

In the recruitment industry we know that everything comes back to having access to the right people, with the right skills to propel your business forward. Much has been said about the skills gap in the UK, and the STEM skills base (science, technology, engineering and mathematics) has been in short supply for a long time. At Penna, we're seeing strong demand for a consultancy approach to help businesses fill those gaps, and gain access to the smartest technology experts – those with the skills to understand the latest cyber developments and challenges, and how they can be applied to business efficiency and drive growth.

This demand contributes to our results: Penna has seen close to 30% growth year-on-year in net fee income across the recruitment part of the business. Which mirrors the strength of the industry as a whole. We're in a growth era – there's a renewed confidence across the UK and businesses are much more willing to invest in talent acquisition as a means to innovate and fuel further growth. However, as with any forward-thinking business, we can't rely on the macro drivers alone – we are fuelled by the talent of our team as our micro driver. People are our most valuable resource.

A different perspective

All businesses can learn something from a closer look at their human resource position and strategy to optimise going forward. This is where our industry can really be a strong partner – in today's market there's a valuable role for consultants to get under the skin of a business, understand its drivers and requirements, and apply our tools and expertise to both identify and fill gaps.

"True efficiency relies on having the talent to develop new, innovative technological and operational solutions."

I'm a massive believer in practicing what we preach. We spend significant time getting our internal talent practices right. We want to live up to the expectation that we will have leading-edge practices around our own talent management, and we work hard to measure our success. We've been named as one of The Sunday Times 100 Best Companies to Work For on seven occasions now, each time we have entered in fact. This matters not just because it's reflective of a happy working environment – it matters because we track the engagement level of our team against the satisfaction of our clients and the correlation is stunning.

It's a no-brainer, and it applies to any business – attract the best people, keep them engaged, motivated and excited about working for you, and the impact filters out across your business performance. A motivated team, one that seeks out and embraces new and inspiring ways to do things, is the biggest efficiency driver there is.

Five tips to optimise your human resources

See the big picture. Make sure your HR strategy is aligned to your business strategy. It's amazing how many businesses have a disconnected approach.

Take the long view. Keep a close eye on market and sector developments to ensure you remain adequately resourced.

Take it to the top. Ensure your strategy has full CEO endorsement, and that talent acquisition is an integral part of management briefings and updates.

Get cultured. Your corporate culture should actively promote a positive working environment that supports talent acquisition and retention.

Get global. Immigration is a hot political topic, but from my perspective it helps to fill the skills gap. The talent pool is a global one.

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