Despite this new era where open discussions with HR about mental health, equality and discrimination have become normalised, the topic of chief officer retirements remains one of the last strongholds of don’t ask don’t tell. Strange, given that top team stability is key to business stability. So we talked to senior HR leaders Emma Stephenson and Teresa Kilmartin to find out why all the whispering?
Emma, you’re Director of Partner Relations at Clyde & Co.—a global law firm with over 425 partners—and Teresa, you’re CPO of Europe Canada Life and Irish Life. Together you have over 40 years’ experience in HR and over 20 years operating at its most senior level.
So in your experience, how common are HR discussions with top team leaders about their plans to step out?
Teresa: “They’re not common at all. It's this thing that you don't discuss. You overhear staff ask ‘I wonder when they're going to retire?’ or ‘I wonder what their plans are?’ and then say ‘But we shouldn't really ask.’
So we dance around it, and I’ve come to realise that this is a key blind spot when it comes to succession planning and talent development. The ability to have an adult conversation about senior leaders’ intentions and plans would help planning tremendously and enable smoother transitions. But it’s not something [the HR community] has gotten to grips with, yet.”
Emma: “I agree. There is an obligation on partners to pass their practice to another partner—to ensure that clients remain in the firm. So we have discussions as part of that established succession planning process. But when it comes to what it means for them personally and individually as a partner—that aspect we have never given much thought to. If those discussions happen at all, they don't happen consistently and they may not happen well.”
Why is it such a sensitive topic for HR? What stops HR from raising it in the same way they would any other resource planning dependency?
Emma: “There’s the question of when is the right time to have the conversation? For example, there is no retirement age in the United States.”
Teresa: “Yes, the decision of when to retire is very personal and varies from person to person, which makes it hard for HR to predict when’s the suitable time to raise the topic. This fuels a fear throughout the HR community that it’ll be seen as a diversity issue or an equality issue—that they’ll feel they’re being singled out because they're part of a certain demographic.
Also, the concept of ‘normal’ retirement age is continually being challenged as ageism in case law. So we tend to just wait and see what happens, rather than proactively talk to people about that final stage of their career.”
Emma: “Another reason HR fails to initiate these conversations is the false assumption that when somebody makes partner or gets to the C-Suite, that they’re the finished article and don't need the personal and professional help and guidance of HR—when in fact, when it comes to the enormity of wrapping up their career, they probably need more support and guidance.”
That ‘wait and see’ approach sounds like a risk when the person who may/may not be leaving is at the top table—risky in terms of reputation, public perception, stock value, succession, etc. Is it?
Teresa: “It is. When you’re not having full conversations, your planning is based on assumptions, not facts. You might have some successors in mind, but when you get surprised by your CEO saying ‘Oh by the way I’m going to retire next year,’ you’re thinking, that’s fine, but we thought we had about three years to go!”
Why don’t senior executives, themselves, talk about it so that their business can plan accordingly?
Teresa: “It can be an emotionally and psychologically difficult reality to face. I used to do a bit of outplacement work for Irish Life Group, and I saw that even changing position can trigger a kind of grieving for the lost role and lost status—especially if a lot of a person’s identity is wrapped up in the role. So imagine how much harder it is when you’re leaving a company you grew up in and a career for good. That heightens things.”
Emma: “Another reason is they don’t believe it’s in their financial interest to tell us early. There’s a perception that it’ll negatively impact their compensation, and I suspect this perception exists in many settings—not just law firms. Rightly or wrongly they think, ‘If I tell the firm I’m retiring in three years, there will be a decrease in the amount of money I take home as my practice transitions to someone else.’ Whereas if they adhere strictly to the terms of their Member’s Agreement and give us only six-months’ notice, they think they’ll retain more of that compensation.”
Teresa: “They’re afraid of a) seeming weak and b) getting sidelined. They think, ‘I can’t tell the organisation when I’m thinking of going because that might weaken my position.’
I feel that a little bit because I’m in this category myself—leadership level and probably within four years of retiring. You fear that once your colleagues know you’re thinking of stepping out, people are going to write you off. And it’s not necessarily paranoia. Once it’s disclosed, staff think, ‘Oh, they’re not here for the long term. Who’s the successor? Maybe that’s who we should be impressing.’ So the individual does get marginalised a bit and becomes yesterday’s person. That’s just the politics of any organisation. So I think everyone who’s considering retirement feels nervous about that timing bit—but especially when you’re at the very top of the organisation, because all of these actions are magnified and they're a lot more public.”
So what can or should HR do differently? What’s the solution?
Emma: “It's uncharted territory, to be honest, and something we’re only now starting to give proper thought to at Clyde & Co. I believe it’s the same for the rest of the HR community. I believe if we embed these conversations as part of a spectrum of support and a wider policy, the stigma starts to fall away and it allows us to clearly address confusion over things like how compensation will be handled.”
Teresa: “Even before you get to the stage of formal policy development, you can take steps to get buy-in and agreement that this is an issue that needs to be addressed. I plan to have the coaches at Stepping Out come talk to our senior leadership team and introduce the topic. I want to get it on the table as something that's discussable—normalise the feelings of fear and apprehension, shed light on the whys, make them aware of the kinds of support we can arrange to ease their personal transitions. Engaging Stepping Out’s services earlier this year showed me that we can make this a constructive process for individuals. It doesn’t necessarily have to be a binary work vs retire conversation. There are many avenues we can explore with our executives to retain some of the corporate memory while simultaneously helping them focus on the next phase of their lives. But we have no excuse, from a risk perspective, of not managing better the people that are naturally going to leave our organisation over the next two to three years.”
Interview and article by Shelly Wilson, Square One Content on behalf of Stepping Out from the TopTeam