In most offices across Hong Kong, companies have set mandatory retirement ages, pushing veteran employees out the door when they hit 60, or in some firms 65. As that corporate milestone approaches, it is often time for an uncomfortable conversation with an employee who feels they have fuel for many years left in the tank.
The rule and process can feel arbitrary, even discriminatory.
That alone should be enough reason for companies to reconsider the policy of putting employees out to pasture based solely on age.
A recent survey by the Hong Kong Chartered Governance Institute wisely suggests that companies with mandatory requirement ages rethink their policies and shift towards more flexibility in mutually agreed arrangements. When asked the appropriate age for employees’ retirement, the most common response was that employees should work as long as they are able to fulfil their duties.
Most said retirement should occur at 65 or later. The city has no statutory retirement age.
David Simmonds, president of the HKCGI, said companies should have a structured, transparent process for evaluating employee contributions and retain staff based on merit and mutual agreement.
The approach offers benefits to employees and employers alike. From the worker’s perspective, forced retirement may be fine for those with large nest eggs who want to enjoy their golden years. But it’s not ideal for those who still desire to work, are capable of doing so for years to come, and have more to do on building a pension.
For the company, the age-based retirement rule can be the corporate equivalent of shooting oneself in the foot. When the paperwork is done, they have just let go of an experienced veteran who managers struggle to replace from thin succession plans.
Companies today are competing for talent as the city is still recovering from an exodus related to strict pandemic control policies as well as concerns over national security legislation. Longer term, demographics are a problem globally.
The city’s ranks of senior citizens are expected to double over the next two decades. At the Post, retirement policies have shifted to more flexible arrangements.
Anthony Neoh, 77, senior counsel of the Hong Kong Bar and co-chair of the Asian Academy of International Law, is right to point out that keeping experienced employees on the team can help a company better respond to changing conditions, and buys time for a younger generation to be trained using well-prepared succession plans. “Experience is the repository of expertise,” he said.
Organisations that still stick to a fixed retirement age would be wise to review the policy sooner rather than later. It is a governance issue, and one that increasingly looks like common sense.
