London’s changing workforce - getting older and more diverse

Recent years have seen extensive discussion over the impact on the economy and property market of the Millennial generation.

However, the latest employment figures paint a different picture of London’s workforce, which is actually becoming both older and more diverse. This will have implications for the economy, and its property needs.

According to ONS, in the three years to September 2018, the number of people in work in London rose by 7.8% or 338,000 jobs. Of the increase, 255,000 were jobs taken by people aged over 35, with just 83,000 going to those aged 16 to 34.

Those over 35 have seen a 10.0% rise in employment over the last three years, compared to a 4.6% increase for those under 35.

Delaying retirement

Consequently, Millennials as a proportion of London’s workforce have declined slightly, from 41.1% in 2015 to 39.9% today. In theory, more baby boomer retirements over the coming decade could tip the balance back towards the Millennials.

However, the number delaying retirement is rising faster than the pace at which school and college leavers are joining the workforce. The number of people over 65 in employment rose by 22,000 over the last three years, while 18-24 year olds in work increased by just 8,000.

Also, the generation that has seen the strongest growth in total headcount – up 124,000 over three years – is 35-49 year olds. This demographic is the largest in the London workforce (nearly 1.7 million people and rising), and those in it are decades away from retiring. 

Moreover, the share of women in the workforce is increasing, again with the older demographics leading. Employment of women has increased by 9.2% since 2015, with women over 35 seeing a rise of 10.7%. For women aged 35-49 the employment rate has increased from 71.1% in 2015 to nearly 74.0% in 2018. 

Even the idea that the young are more entrepreneurial is open to question. ONS figures show over 80.0% of the UK’s self-employed are over 35.

Diversifying London

London today has a very tight labour market, with an unemployment rate of just 4.5%; well below the 5.0% mark that many economists describe as full employment.

Consequently, necessity will encourage this trend of London’s workforce diversifying, as employers search across the demographics to fill roles. The economy, and the property market that supports it, will need to adapt to incorporate and best utilise these workers.

Office design will have to take into account the working habits of different demographics, marking a break from the heavy focus of late on the needs of Millennials.

This is not to call an end to the ‘funky’ offices of recent years, but they could prove to be a stage in design evolution that has nearly run its course.

Coming next could be new formats that are comfortable for a workforce that is multi-faceted and sophisticated. A genuine variety of different work areas will be needed – not just lots of break-out space, and a token quiet room that is near permanently occupied.

The Millennial revolution brought about the concept of workspace that completely integrates the employee. The approach will now adapt to the context of an office filled with a wider variety of people.

Read more in the latest Central London Quarterly Report Q4 2018