In the private sector, it is not the age of the employee but how much value the individual is able to add to the company that matters. Those of us who have known retirees or have people in their 60s in the family, would be aware that most of them are active, sharp, full of enthusiasm and always eager to work.
Rajesh Balaji, CHRO, Matrimony.com, recalls the case of the manager of a restaurant he used to visit regularly.
Although the said manager was past the age of retirement, he was brilliant at his job. He had his finger on the pulse of his customers and guests and could literally guess what people wanted just by reading their expressions. Clearly, the manager had only his experience to thank for his abilities. And as Balaji points out in this case, the age factor plays no role.
“Given the advancements in medicine and the medical field, there is definitely a case for increasing the retirement age in India”
Satyajit Mohanty, CHRO, Crompton
The official retirement age in the corporates stands at 60 today. Generally, the private sector aligns the retirement policy with that of the government entities. However, over the last couple of decades, life expectancy has increased globally.
As per the 2021 World Health Report, the average life expectancy in India stands at 70.1 years now. So can we say that 60 is too early an age for retirement?
Ravi Mishra, SVP-HR, Aditya Birla Advance Materials, answers in the affirmative. He is of the opinion that 60 is too early for anyone to retire, more so for people working in critical roles or in R&D teams.
Many countries across the world have increased the retirement age of their employees from 60 to 65. Some European nations have even increased it to 69! In the US, there is no definite age for retirement. As per the law, people are entitled to retirement benefits from the age of 62, and those born after 1960 reach their full retirement benefits age at 67.
“Given the advancements in medicine and the medical field, there is definitely a case for increasing the retirement age in India,” says Satyajit Mohanty, CHRO, Crompton.
Mohanty further shares that at Crompton, there was an internal debate recently, on increasing the retirement age of employees. While most of the Company’s senior leaders are above 57, many of the high performers are nearing retirement. However, their passion, dedication or performance remains unchanged. “When I joined Crompton as the CHRO, I did not find any correlation between productivity and age. In fact, all our best performers are quite experienced,” points out Mohanty.
“The private companies do not care about the retirement age as long as people are adding value to the company,” adds Balaji.
There are, however, some problems that companies encounter in increasing the retirement age. One is obviously the increasing population in India and of course a fear that many professionals would get stuck in their career if the retirement age is increased.
“Many a time I have found, especially at the shop floor, that as people age, they become physically unfit to handle the work in factories, and therefore, the company has no choice but to let them go”
Ravi Mishra, SVP-HR, Aditya Birla Advance Materials
“Most European countries have a declining population, whereas in India, this is not the case,” points out Mohanty.
Apart from the increasing life expectancy, which stands at 70.1 years in India, we should also look at the healthy life expectancy age, that is, the number of years a human being stays healthy and active for. As per the same World Health Report 2021, the healthy life expectancy age in India is 60.3 years.
“Many a time I have found, especially at the shop floor, that as people age, they become physically unfit to handle the work in factories, and therefore, the company has no choice but to let them go,” says Mishra. He further explains that people suffering from high blood pressure or sugar can even end up losing their lives at the shopfloor, as there is a huge risk involved in working at the furnaces or with heavy machinery.
Other HR leaders explained to HRKatha that all those who are able to continue to add value to the company with their skills and knowledge, are usually welcome to stay with the company even after retirement, as advisors or consultants.
“The private companies do not care about the retirement age as long as people are adding value to the company”
Rajesh Balaji, CHRO, Matrimony.com
Just like many other countries of the world, the Indian government too can increase the retirement age. Recently, in January 2022, Andhra Pradesh Chief Minister YS Reddy announced an increase in the retirement age of state government employees from 60 to 62 years. There is no reason why other states in the country should not follow suit.