Many South Floridians recall Sumner Redstone as the feisty billionaire entertainment mogul who snapped up Fort Lauderdale’s Blockbuster Entertainment and folded it into his Viacom media/entertainment empire.
But lately, the 93-year-old Redstone has been portrayed as anything but strong and outspoken. He has lost some of the mobility in his jaw, does not walk easily, and has around-the-clock staff to help him move. Yet Redstone publicly had said that he would never retire nor make succession plans for Viacom, in which he owns a controlling stake. Meanwhile, his competency has been called into question in lawsuits that claim he lacked the mental capacity for certain recent business decisions.
While few corporate leaders like Redstone work into their 90s, more are staying on well past the traditional retirement age. In fact, more senior leaders as well as employees are working into their 70s or 80s. Indeed, the U.S. has a larger number of older workers than ever, now that the huge baby boom generation is hitting retirement age.
By 2022, the U.S. Census Bureau projects that 32 percent of people ages 65 to 74 will still be working, a big jump from the 20 percent in that same age bracket in the workforce in 2002 and 27 percent who were in the workforce in 2012. In Miami-Dade, about 20 percent of people 55 or older are in the labor force, including more than 63,000 workers over 65. In South Florida, it is not uncommon to see people in their late 60s or 70s trying law cases, auditing public companies, steering corporate strategy, showing houses and ringing up sales.
As the number of older workers increases, so do the challenges they — and their companies — face. Recent research from the Society for Human Resource Management and the Sloan Foundation, for instance, shows only about a third of organizations are preparing for a workforce that skews older. Industries with a greater-than-average chance of being hit hard by the retirement of baby boomers (those born between 1946 and 1964) include education, government, healthcare and manufacturing.
Perhaps even more sobering is the fact that boomers are the largest segment of workers today in leadership and management positions. Companies that don’t plan for the impact of the boomer generation’s retirements face a potential leadership crisis when those workers are gone, according to the Society’s research.
In South Florida and most of the nation, businesses are trying to figure out how to work through the challenges of an aging workforce. At the same time, as life expectancy rises, individuals battle pervasive stereotypes that older workers are less motivated, are a business risk, or are too costly to keep on the payroll. Businesses must juggle myriad related issues, including creating a hospitable workplace for older workers; creating pathways for smooth transition in management and leadership; and managing mandatory retirement ages, or the lack of them.
And if not handled properly, the needs of a company and those of an older worker can collide and create instability — as the case of Sumner Redstone shows — and even deeply damage an organization.
“This is all new. There is no universal approach,” Robert Preziosi, professor of organizational studies and human resources at Nova Southeastern University, said of the issues that are arising as the workforce ages. “We are seeing a potpourri of approaches driven by what individual companies think will work best for them in terms of their bottom line.”
IN THE WORKPLACE
There are skills and experiences that older workers bring to companies and corporate boards that are unique to baby boomers and should be valued, workplace experts and corporate leaders assert. For example, older workers bring historical perspective, networks developed over years in the workforce, client relationships and a greater depth of experience.
Still, even in companies that have no mandated retirement age, some older workers have reported being forced out of jobs in subtle or not-so-subtle ways — being given lesser or fewer duties and responsibilities, for instance, or even seeing pay reduced.
Employers who have been sued in South Florida for alleged age discrimination run the gamut from Pine Crest School, the upper-crust private school with campuses in Fort Lauderdale and Boca Raton, which allegedly told eight staffers from 54 to 72 years old, “You’re out of here,” to WSVN-Fox 7, which was accused of firing its healthcare reporter Marilyn Mitzel in December 2005 because top management thought she was too old to be on the air.
In other examples, older workers report that workplaces won’t hire them.
In February 2015, the U.S. Equal Employment Opportunity Commission sued Darden Restaurants, saying it discriminated against two male applicants at a restaurant in Coral Gables. The claim turned into a larger case against Seasons 52, claiming the chain has a pattern of rejecting applicants 40 and older for jobs as servers, hosts and bartenders. The company that owns and operates more than three dozen of the chain’s restaurants has denied the alle gations.
Mark Schmit, executive director of the SHRM Foundation — a professional HR membership association based in Alexandria, Virginia — said the inability of older people to learn new technology, adapt to change, or produce results relative to the rest of the workforce often is a myth. “The only place where their productivity has been proven to go down is in physically demanding jobs,” he said. “We have to train managers to get past these biases.”
But Miami-Dade Chamber President Eric Knowles said that whether it’s fair, or not, “it can be more costly for companies to employ older employees,” often because their salaries are higher and insurance more costly, he said. It is the reason why small business owners may be better able to control their retirement age, he said.
There are also other facts the come into play as workers decide when and how to retire. Older workers far down the food chain in larger companies often don’t have the luxury of deciding when they’ll leave, due to factors such as mergers, downsizing and other cost-cutting measures. These actions also have implications for small businesses.
Also, people who have higher education levels often choose to work longer, said Alicia Munnell, the director of the Center for Retirement Research at Boston College. “They have nicer jobs that are more interesting and less physically demanding,” she told The New York Times in August.
Can businesses force employees to retire? The law is clear that only a narrow category of workers legally can be required to do so.
One indication that the workplace is often difficult for older workers is the explosion of age discrimination suits. According to the U.S. Equal Employment Opportunity Commission, the number of age-related complaints in recent years has skyrocketed. The EEOC, the federal agency that handles such matters, said it receives between 23,000 and 25,000 age discrimination complaints annually. The odds of an employee prevailing, though, are slim: In 2015, only about 17 percent were resolved with merit.
In 2015, there were 450 age-related discrimination charges filed with the
EEOC in Miami-Dade and Broward counties.
In Florida, the state’s demographics may affect the transformation of workplaces into more senior-friendly environments, said Jeff Johnson, state director of AARP Florida. “When the customers are older, they want a workforce that relates to them,” he said. “I think you see more acceptance of older workers in Florida than in a state that is not as age-focused as ours.”
Schmit, of the Society of Human Resource Management, suggested employers create mixed-age teams, provide training for older workers to keep skills current, offer phased retirement options and flexible schedules, and address manager bias.
“I don’t think we’re going to see significant changes in workplace receptivity [for older workers] on a grand scale for years to come,” said Dr. Phillip Pizzo, former dean of the Stanford University School of Medicine and founding director of the Stanford Distinguished Careers Institute, which helps seniors transform themselves for roles with social impact. “We’re just at the beginning of transformation in which workplaces create paths for older workers to stay employed, engaged and help provide counsel and oversight.”
Some professions may be more difficult than others in which to age gracefully.
Ronald Seiderman, a 67-year-old Plantation hairdresser, said he is the ideal example of an older worker who wants to stay in his job, but now finds the workplace less hospitable. Some of his clients have died or live in senior centers. The young customers who come into his shop want young stylists who they perceive will give them more fashionable cuts.
“Of course, no one said that about Vidal Sassoon,” he pointed out. Seiderman said his profession is physically demanding, requiring him to stand on his feet all day. However, he likes his job, has no 401 (k), and has a wife who urges him to continue working, which is what he hopes to be able to do for years to come.
LEADERSHIP IN TRANSITION
In South Florida, public companies such as Carnival Cruise Line, Lennar and MasTec have worked through their succession plans, with senior founders training and mentoring the next generation to ensure a smooth transfer of power and knowledge.
But transition, and the plans for it, can become a delicate matter in a company led by an aging, powerful — and reluctant — leader, as Sumner Redstone has shown. That is especially true when the leader is a founder or an owner of the company.
At Perry Ellis International, George Feldenkreis, 80, continues to drive the company vision and says he’s not ready to step aside into retirement. His delay in implementing a succession plan was among the reasons activist investors pressed for changes last year. Earlier this year, Feldenkreis named his son Oscar, 56, as CEO. His daughter, Fanny Hanano, 55, is chief administrative officer.
“Having my son and daughter in the business with me gives me a feeling of continuity,” said Feldenkreis, chairman and founder of the Doral-based designer, distributor and licenser of men’s and women’s apparel, accessories and fragrances. “I don’t believe in retirement. I have not seen good results.”
With the bulk of his net worth tied to company share price, Feldenkreis said, “that’s a lot of incentive for me to stay involved.”
As chairman, Feldenkreis said his mind is sharp and he works hard, but someday, he’d like to cut back to 30 hours a week. “That will allow me more time to travel and get ideas and focus on the long term,” he said.
In recent months, South Florida has seen some prominent leaders step down well after they were eligible for retirement benefits.
After more than a quarter-century of service, for instance, United Way of Miami-Dade president and CEO Harve A. Mogul, 73, announced that he will retire and focus on building the organization’s endowment. “You have a responsibility as a professional to seeing about the long-term flourishing of the organization you are working with. I always had that in mind,” Mogul told the Miami Herald.
In the banking community, last month John Kanas, the 69-year-old chairman, president and CEO of Miami Lakes-based BankUnited, announced he will retire. He had come to Florida in his early 60s after a previous career as a successful banker in New York. However, Kanas will remain with BankUnited as chairman of the board of directors and COO Rajinder Singh, 45, will take over the helm.
The Society for Human Resources Management forecasts continued changes at the top of organizations as more companies recognize the graying of their senior leaders and begin to develop succession plans.
LESSONS FROM THE LEGAL LANDSCAPE
Some industries in Florida may be particularly hard-hit by the aging workforce. In Florida, 40 percent of Florida’s 103,000 lawyers are over the age of 60, and 64 percent are over the age of 55. That makes it a good place to look at the intertwined issues of aging workers and their impact on consumers as well as the workplace, retirement policies and succession planning.
Facing what it has called a “tsunami” of aging lawyers, The Florida Bar has stepped up to protect the public from lawyers who are no longer able to provide competent representation while striving to protect attorneys who have given so much to the legal profession.
As John T. Berry, director of the Bar’s Legal Division has noted: “It’s a very emotional issue. For many lawyers, our professional identity is wrapped around our personal identity. It goes to the heart of who we are as people,” he said. “We have to be careful to be sensitive to that.
“But some of the mistakes we have seen nationally are leaning over backwards to not hurt people … to let them practice too long, instead of helping them transition into retirement or something else they can do in their legal careers,” Berry said.
Fort Lauderdale attorney Linda Ann McCullough chairs the Florida Bar’s Senior Lawyers Committee formed three years ago to support the needs of lawyers working past standard retirement and help them share their knowledge with younger lawyers. McCullough says her committee has hosted workshops on Medicare, mentoring and succession planning.
She says that when senior lawyers stay at firms, younger lawyers start to believe there is less opportunity and often go out on their own without much experience. “We are looking at how to utilize the experience and knowledge our senior members have to mentor younger lawyers,” McCullough said.
The Senior Lawyers Committee also works closely with Michael Cohen, executive director of Florida Lawyers Assistance, which offers education programs to Florida law firms about how to spot, and respond to, problems with aging lawyers before issues become liabilities.
“What you see mostly at first is docketing and calendar-ing problems,” Cohen said, referring to the way court cases are scheduled. “The lawyers will fail to appear at depositions or hearings. Documents and pleadings don’t get filed on time. Rarely does it start with abandonment of practice,” Cohen said.
He has seen it become problematic for firms: “If you are dealing with aging issues, chances are good the lawyer has been with the firm for a long time. It’s likely he is a senior member or partner and there is a reluctance to confront someone with power in the firm.”
As of early 2016, roughly half of the country’s largest 200 firms still have some mandatory retirement policy, according to Lateral Link, an international attorney recruiting firm headquartered in Los Angeles.
Mandatory retirement ages range roughly from 63 to 68, with different requirements: Some firms will transition partners from equity owners to salaried counsel positions, and others broach the topic of the impending retirement a year or two in advance to ease the partner’s transition out of the law firm. Some lawyers claim mandatory retirement is supported by scientific studies that link cognitive decline with advancing age and is a way of keeping older partners from hanging onto clients for too long and becoming a drain on firm finances. Some firms argue mandatory retirement is the only way for younger lawyers to step into roles that allow for firm continuity.
In South Florida, where firms were founded decades ago by partners who still work there, a good number now are in their late 60s and early 70s and continue to be business generators. One of those is Alan Kluger, the 66-year-old founding partner of Miami’s Kluger Kaplan law firm.
Kluger said he can’t imagine retiring anytime soon and envisions at least another decade of litigating cases: “I’m at the top of my game. From my standpoint, it’s not about age. I’m as good and productive a lawyer now as I thought I was when I was 20,” he said.
Still, Kluger said he has begun planning ahead to keep his firm prosperous for future generations, handing off management responsibilities to next-generation partners. He said he recently he told his daughter, also an attorney at the firm, “If I’m not at the top of my game, you need to tell me.”
Most of the big Florida firms such as Holland & Knight and Greenberg Traurig, and smaller local firms such as Podhurst Orseck, take a different path than the out-of-state firms and eschew the mandatory retirement requirement to emphasize productivity rather than age. However, with senior management now graying, and a legal market battered by changes in technology and client demands, the firm leaders are planning for succession, finding ways for junior partners to step in and senior partners to stay engaged.
David Levine, 66, founding partner of Levine Kellogg Lehman Schneider + Grossman in downtown Miami, agrees that succession is a big issue at law firms where boomers control a sizable percentage of the business: “We knew from previous experiences that unless we built our firm with a succession plan, in five or 10 years we would not survive. We wanted a firm that would survive the retirement of all five of the founding partners.”
Levine said one of the big issues that causes friction with senior lawyers is compensation: “You have to step back and be reasonable on compensation. You have to feel comfortable opening your client contacts to younger lawyers. If you hoard the clients to keep up your own numbers, that is not best for the firm.”
At the same time, Levine said firms benefit from older lawyers who have the expertise and good judgment that is critical in law. “We need to become the client counselor or mentor to young people,” he said.
Levine’s firm was formed in 2010 and gave two 40-something lawyers an equity stake earlier this year. “That has been a real recruiting tool for us,” Levine said. “Unless you have business producers at all levels ready to take the reins, the firm won’t survive.”
Law firms are discovering what public relations firms and ad agencies and other service providers are realizing: They need to create mixed-age teams. “Clients want young and creative, but they also want older, wiser and experienced,” said Larry Carrino, president of Miami’s Brustman Carrino Public Relations.
At Greenberg Traurig, with more than 2,000 lawyers, the firm has been on a steady course to draw young talent and plan for succession by expanding its senior management ranks, which already included four partners in their 60s or 70s. Brian Duffy, the firm’s CEO, is 50, and a few weeks ago, the firm named Patricia Menéndez-Cambó, Paul Maher and Richard Edlin (all in their 50s) as vice chairs. The firm has never had a mandatory retirement age.
“We are always thinking about being ready for the future,” said Richard Rosenbaum, 62, Greenberg Traurig’s executive chairman. However, he added that the firm still has a good number of lawyers in their 70s who are strong contributors. “They are still working hard, coming in early, going home late, bringing in clients.”
In firms where partners are compensated for hours they bill clients, some senior partners show reluctance to transition a relationship to younger partners. (One senior partner said he flat out resents young lawyers who believe they are entitled.) Rosenbaum said his firm is trying to work through that.
In Florida, the aging workforce is an issue in the judiciary, too. The mandatory retirement age for judges and justices is 70, although they may finish the final term if more than one-half has been served at age 70. In recent years, there have been bids in the Legislature to try to increase the retirement age of Florida’s judges and justices from 70 to 75, but so far, that hasn’t happened.
Last month, longtime judge Stanford Blake retired at age 67 after 22 years on the bench. Blake survived a bout with oral cancer that left his voice scratchy, but intends to move on to another career doing legal mediation, where he hopes to earn more and have flexibility to travel with his girlfriend. “I’m going into my next adventure,” Blake said. “I hope to have enough business to work as much as I want … I want to be busy.”
Few topics today are more fiercely debated at local accounting firms than mandatory retirement and succession. With baby boomers retiring at an accelerated rate, firms are coping (or not) with transition issues surrounding those exits. The nation’s largest accounting firms, known as the Big Four, still have mandatory retirement of 60 to 62 and argue that mandatory retirement assures the firm of seamless succession planning, attracts and retains younger talent and results in a more diverse partner group.
Yet, small and mid-size firms are struggling to find ways to replace soon-to-retire partners, according to a new national survey by the American Institute of Certified Public Accountants. The survey found small, multi-owner firms made little progress implementing succession plans in the past four years and that many solo owners admitted they don’t have plans for what will happen once they leave; many also plan to delay retirement past 70, according to the AICPA survey.
In South Florida, many smaller accounting firms managed by older partners are dealing with succession through mergers or buyouts from bigger firms. “For both firms, it’s a win-win, especially when the partners nearing retirement are staying on to mentor younger partners and helping them build stronger relationships with clients,” said Mike Balter, managing partner of the Southeast Region of Marcum, a national accounting firm. “As long as someone is adding value, there’s no reason for a retirement age.”
Meanwhile, the Florida Institute of Certified Public Accountants, the state’s professional membership organization in existence for 100 years, is making a concerted effort to lure younger members, recognizing that its membership has become dangerously skewed to the older population.
In medicine, the aging workforce poses challenges, too. In June, the American Medical Association agreed to develop guidelines to assess the physical and mental health of older physicians and review their treatment of patients. One-fourth of U.S. doctors are now older than 65, according to the AMA. In Florida, the Florida Medical Association said it hasn’t yet looked into developing further guidelines to assess the physical and mental health of older practitioners, according to Jeff Scott, general counsel for the FMA.
Meanwhile, Knowles, of the Miami-Dade Chamber of Commerce, said that no matter the profession or business, mature workers and younger staffers alike benefit when they embrace what the other generation has to offer.
“We need to ask, ‘How do we work together?’ because both parties bring a lot of insight from different perspectives,” Knowles said. “We should be sharing wisdom and looking at how the two can come together, not how one is pushing the other out.”
This story was changed to correct the spelling of a name.
Cindy Krischer Goodman writes about work/life balance and other related issues. Connect with her at email@example.com.