Singapore will grow older faster than nearly every other society in the world, warned Prime Minister Lee Hsien Loong during his speech at the Singapore Management University’s Ho Rih Hwa Leadership in Asia lecture last year.
According to the Singapore Department of Statistics, there are 430,000 Singapore residents (Singapore citizens and permanent residents) aged 65 years old and above in 2014. By 2030, this figure will double to approximately 900,000 Singapore residents who are 65 years old and above.
With an aging population, the Singapore government has already raised the retirement age repeatedly over the years in order to ensure sustainable economic development. The long-term objective of the Singapore government is to eventually raise the retirement age to 67 in 2017 as announced by Prime Minister Lee in his 2015 National Day Rally speech.
Given this key shift in Singapore’s demographic landscape, there is an emerging leadership challenge for organisations – the retirement of organisational leaders.
As baby boomers start to retire from their roles as organisational leaders, corporations will find the shortage of leaders in Singapore even more acute especially if they do not have strong succession bench strength in place. With the change in Singapore’s demographic profiles, the idea of replacing a leadership position with someone younger through external hire may be more difficult (and potentially become unsustainable and impractical) in the long run. Besides, the cost of external hire is also higher, longer and riskier compared to filling up a leadership role with someone internal.
It is therefore important for organisations to re-adjust their current operational paradigm, find new ways to engage these retired leaders and capitalise on this group of experienced veterans to soften the impact of leadership shortage. In fact, according to a survey published in 2014 in association with Cranfield University that had focused on European countries and the Asia Pacific region, only 19 percent of organisations surveyed stated that they were prepared for the departure of their senior leaders and almost a quarter said they were not prepared for the departure of these senior business leaders at all.
Retirees are not less motivated nor are they less competent. There is certainly much research that indicates age does not affect job performance negatively. The general notion of the decline in cognitive and intellectual abilities of ageing organisational leaders is over-simplistic and misleading. Although we know from research that intelligence does decline with chronological age, this decline does not begin until relatively late in one’s life and when this occurs, it can normally be reversed through training. On the whole, in reality, we know from research that intellectual function typically remains relatively stable with age. (Research is quoted from Learning and Change in the Adult Years: A Developmental Perspective, by Mark Tennant & Philip Pogson) Organisational strategists should in fact question if the negative attitude of retirees is real or perceive from the society at large.
Today, many retirees do have extensive life experiences that they could and would share with the younger generations. The experiences of these retired leaders could certainly benefit the younger generations as the term ‘learning from experience’ described. By ‘learning from experience’, the younger generations could learn successful managerial practices in a given organisational setting from these retired leaders. Through this, the readiness of the younger generations to become effective organisational leaders would be accelerated. Pushing young leaders to step up beyond their level of readiness would only destabilise the organisation and erode both young leaders’ and other organisational stakeholders’ level of confidence of the transition.
Businesses in today’s globalised economy also do not have the luxury of time to allow young leaders to learn slowly from their own leadership experience. For that reason, it is important and necessary for these young leaders to get as much help as possible; including learning from successful retired leaders. More importantly, these retired leaders are often eager and open to share their experiences with the younger generations. So, as a matter of practical wisdom, corporations should tap on this group of willing retired leaders to accelerate and build the organisation leadership bench strength. Ultimately, what an organisation can do simply is to create a common platform for young leaders to learn, analyse and reflect on collective experiences and then identify ways to apply these learnings back at work.
As Ekerdt, DiViney and Kosloski put it in their 1996 journal article titled ‘’Profiling Plans for Retirement’’, individuals have choices and alternatives, but only as opportunity allows. Put differently, individuals anticipate retirement alternatives from within an “opportunity structure” composed of biographical and situational factors that make action conceivable in the pursuit of value goals. These anticipated retirement alternatives are provisional intentions that create paths towards how individuals eventually come to behave in terms of their retirement decision. The longer and deeper the intention to retire in a particular way, the stronger will be the link between those intentions and their eventual behaviour. That said, if corporations want to tap on and utilise the retirees’ past practical life experiences, they should create these “opportunity structures” early for their retiring organisational leaders. Otherwise, they might end up having to live a time of missed opportunity, for their retiring leaders might have already made up their mind in retiring completely or partially. These early “opportunity structures” would also impact the commitment level the retiring leaders have on the future task of mentoring younger colleagues. The more serious these “opportunity structures” are and the more committed organisations are to these structures, the more serious the retiring leaders would be.
If companies are able to produce a successful formula, these retiring leaders may never see themselves “retiring” at all. In other words, they may not eventually hold a position in the company but will always see themselves as a valuable member of the company to contribute in ideas and advise whenever called upon. On that note, companies could consider using the retired leaders as executive coaches for the younger generations and tap on their extensive industry contacts to open doors and seal connections for the younger generations.
One ‘organisation’ that is at the forefront of creating these “opportunity structures” is the Singapore government. Former Singapore Prime Minister Goh Chok Tong appointed the late Lee Kuan Yew to be Senior Minister after Lee Kuan Yew stepped down as Prime Minister in 1990. In 2005, Singapore current Prime Minister Lee Hsien Loong appointed the late Lee Kuan Yew as Minister Mentor and Goh Chok Tong as Senior Minister (and then Emeritus Senior Minister in 2011) with the aim to tap onto their accumulated experience and wisdom to help and advise the government that comprises younger ministers.
Retirement does not necessarily imply having to stop working completely and exit from the workforce. In the words of poet and author David Whyte, there is no hiding from work in one form or another, as people create meaning in what they do and how they do it. In the broadest sense, when one retires from a position of employment professionally, he or she may still be actively involved in other work socially.
Perhaps one important element for organisations to think about is how they can help retiring leaders to define that question and forge a new way forward as a win-win proposition.
About the author
Dr James Lim is Senior Lecturer, Strategy, Management and Organisation, Nanyang Business School, NTU Singapore