I’m close to retirement: how to negotiate my exit
Whether in large corporations or in small companies, lots of senior managers getting close to retirement are sidelined. They may, for example, not be invited any more to important or strategic meetings, they team may be reduced or they may not be involved any more in big projects.
This may be presented to the person in many tricky ways, such as: “you’ll be able to work from home”, “leave the tricky work to the juniors”, “we’ll call you, at the appropriate time, as expert, but you’ll no longer be part of the operational”, … but yet the result for you might be the same. You may feel underemployed and you might get bored. In fact, your employer expects, in most cases, your resignation at no cost to him.
There’s no destiny in this and much less so since the mass pension reform. So why not take advantage of this opportunity to leave in good (financial) conditions and optimize our last professional active years?
Maybe you’ll work up to 60 or 70 years old. When you’ll retire your revenues will drop to nearly half of what you’ve made when active. At 50 or 60 you’re still quite young and experienced at the same.
So, why not go out with your head held high with an exit negotiation which could help you bounce in your professional life?
First, let’s kill 4 preconceived ideas.
Since I can retire with a full pension my employer will never fire me (with a severance package)
Why would you have to retire just because you can? Since the last French pension reform (not the one being discussed in 2020 but the previous one) “No employee can be forced by his employer to retire before being 70 if the employee does not agree to it”. Consequently, your company no longer has any certainty as to when exactly you’ll retire. So, you can let them understand that you don’t see yourself retiring soon and why not at 70. In this context, a negotiation can be worthwhile.
I am too old to hope for anything, my employer will just wait for me to retire
This is a pretty commonly spread idea but is can be overturned. This idea assumes that retirement will be less costly for the company than negotiating a severance package so the company just has to wait for a few months.
Also, firing a senior manager close to retirement may send a bad sign internally and could have consequences on the “social climate” particularly if the company has put an employment preservation plan for senior in place.
Yet, there are conditions under which your company might find benefits into letting you go rather than waiting for you to retire. If you have not told your employer when you plan to retire then he is quite uncertain. If, on the other hand, and for whatever reason, you have indicated that you do not intent to retire then he might start to worry and then a discussion over a separation might be appealing to him.
If your employer is convinced that you want to stay in your job for the next several years while you could retire, the cost of a severance package + the overall cost of a junior if you are to be replaced might be lower than your overall cost to him for the same period of time. You could also quietly suggest that you staying in post could potentially bar somebody else’s promotion, or prevent the hiring of less costly junior, or even create some disturbance in the case of a new organization …
I have 30 years seniority my employer will never accept to pay me not even the collective convention indemnities
Yet again, it all depends on how long you intend to stay in your post. If the associated cost for the company is more than a severance package if they were to fire you, then the company may find its interest into letting you go before your retirement time.
At 60 my professional career is over: I can’t dare a new start
There are several situations in which you just simply cannot call for retirement even if you are 62: expatriation without contribution a French pension plan, late studies, unemployment periods to raise children etc. Never forget that retiring means loosing almost half of our revenues.
So, why not try to optimize this (sometimes long) period of time before your retire effectively rather than being sidelined or do boring things?
Now, I will give you a concrete case.
I am close to retirement can I negotiate my departure? Robert’s case
At 60, Robert is head of department in a large financial company where he has spent most of his professional years. While he had met his targets in the past years and that several of his colleagues with similar functions have been promoted, he has not, much to his unhappiness.
Also, Robert does not contemplate the idea of passively wait for his time to execute his rights to retirement with a full pension, but on the contrary, is determined to continue to work beyond that time. Therefore, he is much unhappy with what he believes as being sidelined. So, let’s face it: he should better leave this company and engage into another project.
Here’s the context:
- The company rarely fires its managers and therefore, sidelining is common to push the people towards resigning;
- The company has put in place a ‘Senior Employment’ plan which is, in fact, nothing more than a work reduction scheme for these employees. The company regularly communicates around this subject and does not want to be in default on this;
- Robert has always been loyal to his employer but reckons that his is now confined into technical tasks;
- Robert’s perimeter of responsibilities is gradually reorganized and, in fact, transferred piece by piece to a subsidiary.
The 3 obstacles Robert could face in his departure negotiation are:
- His contractual indemnities are high so the company has little interest to let him go;
- The risk of being de facto integrated into the ‘internal Senior End of Career Program’;
- The increased risk of being sidelined should the company refuse his departure.
The chosen strategy
The main objective is to encourage the company to:
- Accept a separation while granting Robert the benefits of his seniority and set aside the risks;
- Give him the means to fully & serenely engage into his personal project.
Two approaches have been retained:
- “the human”: related to a “what would you do if you were in my shoes?”
- “the aggressive”: the logic here is “you’re not leaving any choice”.
The first approach consist of being transparent (to some degree) with his n+1 around a future project and in particular to convince n+1 to let Robert give it some time in order to make n+1 an ally while stressing the fact that he, n+1, retains the decision power on this.
The second one consists of changing the balance of power via manifesting his dissatisfaction through using several pretexts and in several steps:
- Disagreement with his targets in view of the new budgetary constraints;
- New request to be a Director of department;
- Expression of his decision to stay at work until 70 at least (in France, a company cannot force an employee into retirement if he/she does not wish so).
After some thinking, the selected approach implies to favor talks with n+1. This is deliberate as n+1 is emotional and will be rather flattered that Robert puts him at the center of their discussions. Also, this will encourage n+1 to mobilize some energy into avoiding the negative consequences of maintaining Robert in post on the long run.
Robert generates a meeting with n+1 and say more or less this:
“I have been working in this company for more than 30 years now et several years together. We know each other quite well and I have always been very loyal to you and to my fellow colleagues. So, I am coming to you today with that trust in mind knowing that I may take a risk by doing so.
While I have not been promoted Director despite several request and that I have hit my targets and got 100% of my bonuses, I no longer see clearly what I can get out this company. I have to say that I have been very dissatisfied that this Directorship be denied to me. I don’t want to pretend.
So, either I stay in the comfort of my current job until I am 70 but I may no longer be the right person for the job. Or, there is another way which would allow me to leave with the benefit of my seniority and, may be, engage into some personal project? This, by the way, would also send a positive note to the other senior managers who will see it as the sign that the company recognizes their efforts and loyalty.
I know that I am taking a certain risk, may be of being sidelined, in saying all this but I trust you”.
Before this, it has been decided that Robert would take certain precautions:
- Avoid to mention too directly and clearly the creation of his own business but just “a personal project”, without any details and, in any case, only at the thinking stage. This will avoid that the company would just wait for Robert to create his own company and, then, be forced to resign;
- Mention that the Senior Employment Plan is not made for him by pointing out that it is made for employees wishing to stop working which is not Robert’s case;
- Make the point that he cannot afford to have diminished revenues mostly for family reasons.
The players game
N+1’s initial reaction is rather positive. He does not try to retain Robert, probably because Robert’s argument to work until 70 has clearly produced its effects. Also, n+1 suggests a meeting with HRDir and even provides Robert with some advice as to how to handle him, HRDir being described as very political.
During this meeting, HRDir is his expected role by minimizing Robert’s frustrations and suggesting that it is not the company’s interest to pay to let a much-appreciated employee go. Nevertheless, he commits to draft a proposal but remains silent for several weeks.
Robert then has to call on n+1 to force the situation back into motion, particularly by reminding him that the NI contributions will grow after December 31.
When HRDir produces a proposal, it is far from what Robert expected.
This is the chosen time to present HRDir the gross estimate of what Robert would lose (if he were to resign). In total 36 months of salary plus a 6-month notice to ensure transition.
Nevertheless, HRDir has calculated Robert’s compensation if he were to leave. In total, 26 months. He states that “the company would never pay such a sum” and quite brutally offers Robert with a “half-time until retirement”, also mentioning that this proposal in fact comes from n+1. Robert then initiates a meeting with n+1 and more or less says:
“if I were to accept this half-time this would necessarily induce a heavy disorganization in the department and you would be the first to suffer from it. Also, and for financial reasons, I can’t accept this proposal.
I can’t believe this comes from you but, as it seems to be the case and also as I got the feeling that HRDir did not fully study my case, I don’t want to talk to him from now on.
Since that there seems to be no solution, you’ll have to keep me until I’m 70. If I am to be sidelined, I will fight to enforce the terms of my working contract by seeking its legal termination which will lead to grant me not only the contractual indemnities but also liquidated damages.
I will not hesitate to go and see n+2 to explain how casually my case has been handled.
I do not also exclude to activate the unions to encourage them to pay attention to other people’s interests if they were to suffer from HRDir’s contempt.
I will also inform my team that I intent to stay 10 more years and they’ll have to wait a little for promotion.
Conclusion regarding this case
Quickly HRDir presents Robert with a Mutually Agreed Contract Break-up with a specific indemnity equal to what’s contractual, 380 000 € gross as well as an exemption to execution his 6-month notice.
Leaving your company in good financial conditions might precisely help you to dare a new start. This could also be partial time to take care of some other projects such as create or buy a business or even combine work and pension. To do this, it is key to create the favorable conditions under which your current employer might consider letting you go with a decent package.