People@Work. Generation Next at our gates

“The new retirement is no retirement,” screamed a headline in Fortune magazine last week. How hard is it to tell our senior colleagues that their best time is behind them? No, I am not referring to the Indian cricket team, though the topic of ‘current bad scorecards versus past glories’ in the most followed sport in India is a much debated one.

For now, my mind goes back to an old conversation with my then leadership team.

HR head: What should be the retirement age in our company?

Me: Fifty eight

CFO: Why would we rob two years off the most experienced people that the company has?

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HR head: Should we not spend time developing new leaders rather than aspiring for two more years of service? 

I could sense the tension in the room at the thought of retirement. We were all in our early 40s back then, and it was a bit premature to have that discussion. Yet, there we were, thinking of stretching our careers by two more years. I should say that, compared to the current predicament of the Indian cricket team in Australia, the stake in corporate life appears a lot less.

The transition blues

“How do you see my career growth from here,” asked our CFO, who was 55, and his global boss told him that he had to retire from the firm when the time came. The CFO was very upset with the candid feedback and quit as he felt he had contributed so much over the last decade and that a shot at the CEO role was something he deserved. But the organisation had hired a younger CEO, and it was clear on whom they were betting. The same company had, at a global level, a CEO close to retirement and chose the COO as the successor. Ironically, this COO had only two years to retire. Between the terms of these two retiring CXOs, the organisation hardly grew over the next four years. The declining global scorecard was there for everyone to see, but they had each served more than 20 years, and their employer felt another two years each was a fitting send-off. 

Age is just a number

One can argue that age is just a number, and there are still people over 60 running their firms successfully and, hence, the suggestion that ageing CXOs should make way for younger leaders is absurd.

Ten per cent of S&P 500 CEOs are in the 65-69 age group, and about five per cent of Russel 3000 CEOs are 70 or older. This despite 11 per cent of S&P 500 CEOs retiring over the last five years. Conversely, younger age groups have become less represented in the same cohort of the CEO population. For example, among these larger companies, the number of CEOs aged 50-59 declined in the last six years.

In fact, the number of Americans continuing to work past 65 has quadrupled since the 1980s, according to the Pew Research Center. Now, almost 20 per cent — or 11 million — Americans aged 65 and more are employed, nearly double from 35 years ago.

Mark Walton, a journalist and the author of Unretired: How Highly Effective People Live Happily Ever After, tells the story of Americans aged 60-80 who have opted out of leaving the workforce. Walton cites a study from two psychologists that looked at the experiences of 1,500 retirees and 400 people of the same age who were still working. The study found that only around 44 per cent of retirees were happy with their life. “The more successful you’ve been, especially financially, the more likely you are to feel like a failure in retirement,” says Walton.

The new generation

The book Super Founders by Ali Tamaseb presents some interesting data and facets about unicorns, starting with the average age of founders being 34 years. It says a founder’s age does not correlate strongly with success. Some founders were as young as 18, and others as old as 64 when they started. Dave Duffield was 64 when he founded Workday, a human capital management software giant valued at $68 billion today. So, how are companies doing in a country that has seen IPO frenzy? If you look at the CEOs of the Top 25 companies that went for IPOs in 2024 in India, the average CEO age is 46. Almost half are aged 40-50.

Let’s analyse 250 CEO appointments since 2022; the average age is 46. Of course, it depends on the profile of the companies making the appointments, but does it signal that these companies have bet on CEOs who still have a career trajectory?

The swan song

In a town hall, a younger colleague once asked the global CEO why new, junior entrants are given just a few months to prove their mettle, whereas leaders get a much longer rope even if they aren’t performing. The CEO responded that some of them have earned their stripes, and, in leadership roles, one has to direct a bigger ship and, hence, the longer rope is justified. Just like in sports, the corporate world thrives on the recency effect and, eventually, our scorecard decides if we can leave on our terms or those of our employers. 

In promoter-driven companies, based on the leaders’ relationships with founders, one can hang around a little longer despite poor performance. 

Some leaders past their prime who are reluctant to leave on their own find themselves in parking roles. Some of us take these not-so-benevolent hints from our employers and leave, but this famous quote inspires some of us: “Why hurry over beautiful things? Why not linger and enjoy them?

(Kamal Karanth is co-founder of Xpheno, a specialist staffing firm)