Daybreak - “If our country’s leaders are still at it at 73, why should I retire?”

Episode Date: May 1, 2024

Nearly half of India’s 200 million workforce that is over the age of 45 suddenly has the sword of an involuntary retirement hanging over their heads. These are loyal employees from sectors like pharma, retail, manufacturing, and banking who are dealing with shorter career spans but for whom retirement is not a voluntary choice.Those aged between 40-60 years are facing long periods of joblessness after quitting or losing a job. But finding a job has become increasingly difficult for them and it is leading to a lot of stress and financial issues. In a nutshell, their career span has shortened from more than 40 years to just 20 or 25 years. Why is this happening?Tune in.Daybreak is produced from the newsroom of The Ken, India’s first subscriber-only business news platform. Subscribe for more exclusive, deeply-reported, and analytical business stories.

Hi, this is Rohan Dharma Kumar. If you've heard any of the Ken's podcasts, you've probably heard me, my interruptions, my analogies, and my contrarian takes on most topics. And you might rightly be wondering why am I interrupting this episode too? It's for a special announcement. For the last few months, I and Sita Raman Ganeshan, my colleague and the Ken's deputy editor, have been working on an ambitious new podcast. It's called Intermission.

We want to tell the secret sauce stories of India's greatest companies. Stories of how they were born, how they fought to survive, how they build their organizations and culture, how they manage to innovate and thrive over decades, and most importantly, how they're poised today. To do that, Sita and I have been reading books, poring over reports, going through financial statements, digging up archives, and talking to dozens of people. And if that wasn't enough, we also decided to throw in video into the mix. Yes, you heard that right. Intermission has also had to find its footing in the world of multi-camera shoots in professional studios, laborious editing and extensive post-production.

Sita and I are still reeling from the intensity of our first studio recording. Intermission launches on March 23rd. To get alert, as soon as we release our first studio. episode, please follow intermission on Spotify and Apple Podcast or subscribe to the Ken's YouTube channel. You can find all of the links at the ken.com slash I am. With that, back to your episode. It's Labor Day today and what better day to tell you this story about something that is happening to a significant portion of India's corporate workforce.

I'll begin with the story of Srinivasan. This is just a year before the pandemic. 44-year-old Sri Nawasan has been working for Oracle, the tech company, who hired him more than two decades ago. In the span of 20 years that he was working, he was promoted about seven times. But now, he feels stuck, stagnated, like he's not growing anymore. So, he decides to take a career break for some time. Two years later, when he wants to get back to work, things have changed in a way that he was not expecting. There were new technologies already that he was not well worst with,

and the whole thing just became overwhelming in general. Finally, another year later, he joined a Noida-based startup. His rule there was a step down from the last one. He joined them as a blockchain developer, and the worst part, he had no option but to take a massive pay cut. You see, Sri Nivasin is not alone in this. This is happening to nearly half of India's 200 million workforce that is over the age of 45 years. These are the 40 or 50 something consultants, freelancers, part-time executives or self-employed hustlers.

We call them the unwilling retirees. Basically, people who have been forced to shift from their traditional jobs into makeshift roles. Looking for a job has been increasingly difficult for them. it is leading to a lot of stress and of course financial issues. So in a nutshell, their career span has shortened to just about 20 to 25 years. Why is this happening? Welcome to Daybreak, a business podcast from the Ken. I'm your host, Nick Da Sharma, and I don't chase the news cycle.

Instead, thrice a week on Mondays, Wednesdays and Fridays, I will come to you with one business story that is worth understanding and worth your time. Also, daybreak episodes now drop on Tuesdays as well with my brand new co-host, Rahil Filippos. Today is Wednesday, the first of May. Just like Srinivasin, the feeling of no growth, more work pressure and also many roles becoming obsolete, is leading many professionals who are over the age of 40 down the early retirement path. Or they're just being forced to make earlier than planned career changes. We are talking about experience professionals in tech, manufacturing and retail and FMCG.

In tech, for example, just 1% people are still working past the age of 50. So to understand this trend, my colleague Vanita Bhattnagar carried out a career longevity survey among the 40 to 60 age group. More than 250 of the 300 respondents felt like their careers have been sliced into half. which means instead of the usual 40 or so year-long career, it's just 20 to 25 years now, max. Now, this is especially disturbing because they still have a lot to offer. Vanita spoke to Santosh Meyro, a development economist and visiting professor at the Centre of Development Studies at the University of Bath in the UK. He said that the usual dreams of retiring comfortably after 60 are coming to an end. And it's because of a combination of factors like higher life expectancy and rising inflation.

For example, he said, and this is quite scary, annual expenses starting at 3 lakh rupees for a 30-year-old could go up to nearly 2 crore rupees by the time that they turn 90. And this is assuming a steady inflation rate of 7%. So, on one hand, it is becoming harder and harder to find full-time jobs for this age group. and on the other, retirement is becoming both longer and more expensive. So finding a new career path is not really just an option for them anymore. The Ken survey found that over 60% of professionals above the age of 40 do not find growth opportunities at their current jobs.

And a third of these thought it was because of their age. Words like agile, cultural fit, savvy have become more like trick. bigger words. Companies are essentially using them to say that this person is too old to understand this technology or to be able to do this or that. A senior executive from a recruitment firm told us that this lack of opportunities hit seasoned professionals with 20 to 25 years of experience the hardest. And even when offers do come through three out of four times, they land with the baggage of reduced pay. Another reason why this age group of professionals is suffering is also because they don't have a solid network. Most of them do not rely on

it to find a job. We also discovered through the survey that only a third of our 300 respondents were ready to upskill. Most of them did not want to go down that path because it was just too much for them at this stage in their lives. Plus, upskilling also means spending money. Take the example of 42-year-old Anupam, who is an IT professional with a Betech degree from Bitsbillani. He wants to do an MBA from the Indian School of Business. But here's what he said to Vanita, and I'm quoting, how do I justify investing 48 lakh rupees in an MBA when it's also prime time for my child's education? Valid concern, right? Many professionals have the same concern. Is it worth it? Will the time and effort give a worthwhile return on investment?

Like Winita aptly says in her story, in reality, career development often takes a backseat when the daily grind overshadows long-term growth. To find out how all of this is expecting employers, stay tuned for the next segment. Employers are caught between a rock and hard place. They're finding it super difficult to find space for employees above the age of 40. A recruitment firm executive explaining, it to us. For starters, big companies operate within fixed networks and this limits the possibility for career growth. So to make space for fresh, younger and cheaper talent, these companies

choose voluntary exits or they just come up with retirement ages. Now you may think that in most places the retirement age is officially close to 60. Companies like Dell, Honda and Shell offer retirement programs for employees between the ages of 50 and 60. In the IT sector, Tata Consultancy Services, Infasis and WIPRO enforce a retirement age of 60. And conglomerates such as Reliance and Aditya Birlah extended to the age of 62. We send questions to all these companies about all of this, but none of them responded. So to understand this better, let us take the example of a senior executive who left an IT firm at the age of 54.

He said he had no problem with quitting. His company offered him a generous one-craw package as a voluntary severance. It was enough to pay off his home loan. But this did not mean that he wanted to stop working. Here's what he told us, and I'm quoting him, if our country's leaders are still at it at 73, why should I retire? But finding another job at 54 is not as easy anymore. And even if companies want to employ the 50-somethings, corporate hierarchy limits the opportunities

at the top, which makes the selection process very complex. Aparna, who's a tenured HR professional, told us that companies also look for skills like adaptability, influence and agility when it comes to hiring or retaining employees between the age of 50 to 60. Vineyneed Nair, the former CEO of IT services firm HCL, said something to us that sums all of this up perfectly. He said, and I'm quoting, you have to stay relevant to what the organisation wants to do tomorrow,

not what you did yesterday. Daybreak is produced from the newsroom of the Ken, India's first subscriber-focused business news platform. What you're listening to is just a small sample of our subscriber-only offerings. A full subscription unlocks daily long-form feature stories, newsletters and podcast extras. To subscribe, head to the ken.com and click on the red subscribe button on top of the Ken website. Today's episode was hosted by Snigda Sharma and edited by Rajiv Siyah.