Last Year, Tech Mahindra chalked out a new retirement plan for a section of its employees which the technology major has categorised as “U Band”. According to the new plan, they would be retiring when they turned 55.
Early this month, the private sector bank Catholic Syrian Bank reworked the retirement math for its employees, bringing the retirement day closer for its employees by two years. In line with the new policy, those who are 58 years old or older as on May 1, 2019 are considered to have reached their retirement age. Earlier, retirement at age 60 was the norm at the private sector bank.
The number of companies offering early-retirement programmes, including voluntary retirement scheme, is on the increase. Redundancy resulting from technological disruption is a major contributory factor. With the advent of newer technologies, reskilling and upskilling are a necessity, and when some senior employees are unable to meet this requirement, a form of ageism sets in. With the gig economy making its presence felt in some areas, companies see that they can meet certain work requirements by hiring people on the basis of projects.
When they are more open to this model, they will want to function with a much-reduced permanent workforce.
Chetan Joshi, associate professor, organisational behaviour, Indian Institute of Management, Calcutta, refers to this trend of reducing retirement age from what is considered the industry-wide norm as ‘ageism penalty’.
“These are people who may have wanted to continue to work but are now being asked to take VRS,” says professor Joshi, adding that with newer technologies replacing existing ones at the rate of knots, the need to reskill oneself is constant. And so, the possibility of employees losing their relevance earlier, is much higher than ever before.
Now, the question is: With the passage of time, will ageism become more challenging in corporate India? Professionals working in the HR domain that we spoke to believe there is no cause for alarm. There will be checks and balances to ensure that ageism is countered.
Consider reskilling
Sonica Aron, founder and managing partner, Marching Sheep, says that companies will soon come to understand that investing in reskilling employees will be a better option than adjusting their retirement age. “With an increase in life expectancy, people are working longer; organisations will only benefit if people are ready to work for long time, provided they are reskilled,” she says. Recently, Anil Kumar E.T. and Kamal Karanth A., founders, Xpheno, organised a webinar ‘How old is too old?’, which explored the question of early retirement.
Anil Kumar E.T. refers to a survey conducted by Korn Ferry for C-level roles, which shows that the age bracket for executives has not come down. The average age for a C-Suite member is 54 years.
“Even in the IT Services sector in India, the age of retirement of C-Suite executives has not come down,” says Anil, adding that as long as employees know how to keep themselves relevant, they don’t have to fear ageism.
