Better Down Than Out

An alternative to retirement

The new U.S. law extending mandatory retirement from 65 to 70 will leave less room at the top for aspiring younger people and, some managers fear, could lead to a sclerosis in the executive ranks. Denmark has produced a partial answer to these problems. Nicknamed "decruitment," it involves recycling older middle and top managers to lower-level jobs.

The country's largest private employer, Co-Op Denmark, which runs department stores and supermarkets (sales: $1.9 billion), has started a policy of freezing promotions of top managers after age 50 and decruiting them at 60. Already more than 40 store managers have moved down and taken pay cuts of one-third to one-half: Tage Nielsen, 56, now works as an office clerk; Edmond Glud, 64, switched to the mail department; Sigvald Bangsager, 62, cuts a fine figure as a security guard. Says he: "You have to know when your time is up, when you're burned out." Adds Poul Jensen, a former director who now works in marketing liaison: "Why shouldn't a manager work as a mailman? Any kind of work deserves respect."

Co-Op Denmark is pioneering the decruitment program, and a survey of 1,285 Danish managers over 50 showed that 70% preferred downgrading to retirement. Knud Overo/, 56, the chief executive of another Danish firm, Ferrosan, which manufactures Pharmaceuticals, moved down to work half time in long-term planning. With decruitment, some people expect to work past 80. But, warns Ebbe Groes, 66, the former chief of Co-Op Denmark, who stepped aside last year and now helps represent the company in its overseas affairs, "if you give the former top executive any authority over his successor, the system will not work. I now give advice only when I am asked."

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