CHRO Community Conversation gets HR execs talking about retirement age
Head of human capital Linda Roos says she believes people should not be exited based on age.
This week’s CHRO SA Community Conversation, presented in partnership with Workday, provided an engaging platform to frankly discuss whether the concept of retirement has become outdated.
Linda Roos, group head of human capital at ooba, set the scene with an insightful case study of a long-serving employee, Sally*.
Sally had been with the company for almost 20 years and had an average production value of R11 million per month. As per the company policy, Sally had to retire at the age of 63 and was then offered a fixed term contract. However, Sally felt undervalued in a contract role and she took on a role at a competitor – taking her business relationships and production value with her.
This, according to Linda, led the organisation to rethink its approach to retirement.
“We realised how short-sighted we were as an organisation in terms of the benefit of long-serving employees. Our business is almost exclusively relationship-based, with the primary lead source from real estate. The relationships held by our older consultants with their real estate partners are exceptionally hard, if not impossible in some instances, to transfer.
“People should not be exited from an organisation based on age, they should exit when they are no longer performing,” she said.
Ooba has since changed its retirement age to 70.
Linda says that retirement age remains an ongoing conversation.
“I will be taking the matter of abolishing a retirement age to the next strategy meeting. The algorithms that determined 'retirement' age were apparently determined post World War II when life expectancy was much lower. This is what we have based the thresholds on for provident funds, and so on. for many years. But now, people are working longer and want to contribute for longer. People in their mid-70s are killing it on the sales floor,” she added.
Linda was able to clearly demonstrate the rand value of clearly demonstrated the rand value of the over 60-year-old age bracket to her company, amounting to billions of rand in the past 12 months.
She did, however, note that there are some challenges.
“We have found that it is harder to bring about change, there is more resistance to move to digital. Customer demographics are changing and the long-serving employees are typically white females. There is erosion of skills as well. For example, with Covid, people in the higher age bands were more vulnerable. There is also still a need to bring in younger and newer talent,” Linda explained.
This was certainly a hot topic with passionate attendees openly voicing the pros and cons of a company enforcing compulsory retirement at a certain age.
Neridha Moodley, director of audit and head of people & culture at SNG Thornton, highlighted some of the advantages of creating room for younger people while retaining the knowledge of more experienced individuals.
“Our purpose is to grow and develop CAs to contribute towards the leadership landscape of Africa. We encourage new blood to come in and grow through the ranks in order to develop our leadership pipeline. Our current structuring of teams ensures that the transfer of skills takes place.
We also have a mentoring system in place which we are considering expanding to skilled retiring partners as one of the initiatives to contribute towards our leadership development objectives." "Our retirement age is 60, which allows room for other employees to grow through the ranks,” she noted.
Nathan Motjuwadi, human resources & CSI executive at Capitec Bank, brought in the broader perspective of country imperatives.
“We have to also take the South African macro indicators into account. If people don't have a retirement age, how does that impact our employment numbers, especially in a country with such a high youth unemployment rate,” he said.
With these varied collegial inputs, attendees concluded the session by agreeing that the topic was certainly relevant and the CHRO Community Conversation had given them new angles to consider both on a personal and an industry level – with the answer lying in ensuring a balance between retaining skills and bringing in and developing new talent.
*not her real name.