Introduction
The population of the U.S. and developing nations has been changing in the recent past. According to Kotkin (2010), the population of the United States is growing rapidly and is expected to expand by 100 million by the year 2050. However, the growth in population is uneven as the structure is not balanced.
Further details of the changing demographics of U.S. indicate that the population of middle aged people, which forms the productive labour force has been declining while the life expectancy of the people aged 65 years and above is expected to increase (Kotkin, 2010). The trend is similar in other developed countries such as Japan and United Kingdom (Craine, 2010). These changing population trends have pronounced implications to the business world as discussed bellow.
Implication of Population Demographics
The general increase in population will increase the market and therefore the turnover rates of firms. Since goods are produced for consumption, increased population will provide the needed market for the same. Thus, the management of the business that sells fast moving goods should prepare to increase the stock of the firms to meet the rising demand.
Given that the population growth is uneven, firms are going to incur more compensation costs from training. Majority of the population consists of the young and the old. This implies that the working population that is middle aged and which has the required expertise does not suffice business needs (Wheelen & Hunger, 2011).
As an alternative, the business has to resort to the young and inexperienced population for labour. Such kind of labour must undergo vigorous training at job places before being vested with responsibilities.
Therefore, there will always be some training cost. To curb the same, managers should work towards automation of possible business production lines and device mechanism for retaining their employees (Buckminster, 2012). In addition, improved life expectancy for those aged 60 years and above will lead to increased compensation costs in terms of special medications and pensions. The business should therefore employ people on contracts to curb the same.
The birth replacement for the United States is currently at 2.1 as per the 2010 statistics postulations. According to Crain (2010), the replacement rate or total birth rate dropped in 2008 to 2.08 from the expected 2.1 births per woman. Crain (2010) further notes that the total birth rate dropped by 2% from 2007 and the trend is expected to remain the same based on the United States census postulation. This trend, which is also similar in other developed nations, has pronounced implications to business organizations as discussed bellow.
Conclusion
From the posted statistics, there are no adverse consequences to firms at present. However, the future consequences are adverse and the business must prepare for the same. If the numbers of birth are not enough to replace the required number, companies will experience labour shortage in future. Moreover, the nation will experience a gap in the population age structure. This gap will be costly to firms because of the cost of bridging communication and experience gap (Wheelen & Hunger, 2011).
This will force the business to incur training and development cost. For small business units who might not be able to afford the cost of keeping experienced workers, it will suffer from lack of experience and thus may be forced out of the market. Also, the potential of substandard production is likely in such circumstances. To curb such an eventuality, business should look upon expatriate labour and employ them on contracts.
References
Buckminster, A. (2012). Managerial Implications of Changing Workforce Demographics. Web.
Craine, P. (2010). U.S. Birth Rate Drops Below Replacement Level.
Kotkin, J. (2010). The Changing Demographics of America. Web.
Wheelen, T. L. & Hunger, D. J. (2011). Concepts in Strategic Management and Business Policy: Toward Global Sustainability, 13 ed. Pearson: Prentice Hall.