6 Steps to Implement Retrenchment in a “Responsible & Sensitive Manner”

“Retrenchment”…  one of the hottest topics of 2016 where it was inevitable even for large organizations like Microsoft, Maersk Line, Yahoo, Ensogo, Standard Chartered, RBS, Barclay and RWS.

Based on MOM’s Labour Report 2016 released in September 2016, the total retrenchment numbers for 2016 are expected to be steeper than the total figure recorded in 2015. With such mounting numbers, the Singapore Government has placed a strong emphasis on responsible retrenchment to ensure fairness in their various communication to the public and even in the MOM website.

During bad times, when organizations are struggling to remain solvent and cannot find other ways to cut costs, downsizing becomes a natural next step and tough decisions have to be made to let people go. The period of time that an organisation goes through restructuring is never an easy time for all parties involved, and any legal liabilities, negative rumours, gossips and assumptions will only make the already difficult situation worse. To avoid such situations, organisations should consider the following simple tips to ensure that the retrenchment exercise is done sensitively and professionally.

6 Steps To Responsible Retrenchment

Selection Criteria. Be fair when determining who to layoff. Ensure that the selection process is transparent and based on a measurable and objective criteria. The selection should be based on the employees’ productivity and reviews to cancel out any favouritism. Employers should avoid keeping their favourites instead of their most productive employees.

Choose an Appropriate Timing. Employers should be quick in handling situations when there is a hint of trouble before it gets out of control. The recommended time to announce the news is the early part of the week such as Tuesday. This allows employers to deal with any reactions or situations that arise after the announcement is made. It also allows employees to engage with any support services that may have been provided to them in this difficult time. If the news is announced on a Friday, employers will lose the opportunity to quickly deal with any situations that will arise over the weekend.

Do It Face-to-Face. It is important to ensure that all affected employees hear the news personally. Nothing is worse than having to know the retrenchment news through other means. Doing it face-to-face also allows for an open discussion between the employer and employee for the information being received and any concerns. Effective communication is extremely important during any retrenchment exercise. Miscommunication will only add on to the already difficult situation, making it worse.

Embrace All Outcomes. Be compassionate with the emotional turmoil! If someone becomes upset, angry or accusatory, do not respond to the content of their anger. Instead, be considerate and embrace all outcomes. During retrenchment, every move and action by the organization is observed and followed closely by everyone. The way in which the organization treats their affected employees are viewed vicariously by others on how it may eventually treat those who remain.. or even those who may join in the future.

Provide Accurate Facts & Figures. Bad news should be conveyed in a way that is factual, truthful and in unvarnished terms. It is also important to prepare a letter to clarify what the next steps are moving forward. This letter should indicate important information such as their last day, the amount of severance they will be paid, how it will be paid, all career transition assistance to be provided and any other vital information.

Career Coaching. One of the great ways to soften the blow of a layoff is to provide the best support to those who are leaving to help increase their chances of finding a new job. Offering career coaching to affected employees during this difficult time not only allows them to be quicker and more effective in achieving a successful career transition, it also creates an opportunity for positive relationships to be forged between the employees and the organization even after they are no longer employed under the organization.

Apart from the above 6 steps, employers could also offer severance packages and outplacement assistance programs to affected employees.

 Employer top reasons for offering severance package

What are the benefits of offering outplacement services to exiting employees?

  • Protect Employer Brand & Take Care of Employees. Providing the necessary support during downsizing will send a positive message to every employee that they strongly value them. This protects and improves their overall employer branding and positively impacts the organisation’s ability to attract and retain future talent.
  • Maintain Productivity & Morale. Those that remain are often clouded with a sense of uncertainty of what the future holds. A poorly executed retrenchment exercise can lead to loss of productivity and morale of those who remain.
  • Limit Liability. A fair and well-managed retrenchment exercise limits any legal liability or negative backlash from arising. If not managed properly, misunderstanding and miscommunication are bound to happen. With the increasing popularity and use of social media, any unhappiness or bottled up feelings can easily be publicised on various social media platforms that are accessible to public.

Though some organizations are cautious about incurring extra cost during bad times, many consider outplacement and career transition services as an investment into retaining and recruiting talent in the long run.

With Calent3’s Outplacement & Career Transition Services, employees (retrenched or remaining) are equipped with the necessary skills and knowledge to achieve a smooth transition and retrenchment initiatives are conducted with a high level of professionalism, sensitivity and in a fair and responsible manner.

Click here to find out more or contact us for a non-obligation and confidential discussion today!