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Book aims to guide companies on how to retrench employees compassionately

SINGAPORE — In a retrenchment exercise during the 2008 financial crisis, one company’s human resources department set up booths at the ground floor lobby. Employees were then told that if they could not enter the building using their access cards, they had to proceed to the booths to collect their severance package.

Book aims to guide companies on how to retrench employees compassionately

Mr Adrian Choo (left) and Ms Sze-Yen Chee, co-authors of The Exit Management Handbook.

SINGAPORE — In a retrenchment exercise during the 2008 financial crisis, one company’s human resources department set up booths at the ground floor lobby. Employees were then told that if they could not enter the building using their access cards, they had to proceed to the booths to collect their severance package.

At another company, staff members reported for duty, only to be told that it would be their last day at work. Security guards followed the retrenched workers to their desks to make sure that no one took home company-issued stationery.

These are just two examples of how some firms treated their employees when retrenching them, and they are mentioned in The Exit Management Handbook, which was launched on Thursday (Oct 24) at the Institute for Human Resource Professionals.

Mr Adrian Choo, a career strategist who is one of the book's co-authors, along with career coach Sze-Yen Chee, said that the publication is meant to be a guide for companies on how they can carry out retrenchments compassionately and not run the risk of ruining its image or reputation.

On the same day, preliminary labour market data showed that 2,900 workers were retrenched in the third quarter, up from 2,320 in the previous quarter.

Mr Choo said that there are many young human resource practitioners who have not seen actual cases of retrenchment.

This leaves a knowledge gap in how to handle these cases, he said, which may result in human resource professionals trying to cut costs by haphazardly retrenching their employees.

The nature of lay-offs has also changed. Mr Choo said that years ago, these happened in “seven-year cycles”.

“But now that the market is moving so fast, companies have to respond quickly to shift their workforce. As a result, what used to be cyclical retrenchments have now become ongoing, structural retrenchments.”

With many companies having to undergo “continual restructuring”, exit management has to be one of the skills that human resource practitioners have to master, he added.

Should companies fail to retrench compassionately, they run the risk of damaging their reputation, Mr Choo warned. “The reputational damage carries on years after that,” he said, adding that companies that fall short in compensating their workers could have challenges hiring people later on.

Companies may also experience a flight of talent. “Some human resource leaders might say that it doesn't matter when you execute a retrenchment exercise in a fashion that is not respectful or dignified — since these guys are going out, what can they do to us?”

But the ones who remain — the talents a company wants to keep — could see how their colleagues have been treated and, fearing the same fate might befall them, decide to look for another job, Mr Choo said.

WHAT COMPANIES CAN DO

His co-author, Ms Chee, said that should retrenchment become inevitable, companies should think carefully about how they want to deliver the news to affected employees.

“Even down to the minute details — the meeting rooms have to be secluded, away from prying eyes, within the room there should be tissue paper and a bottle of water, because it’s an emotional (experience),” Ms Chee said. 

Timing is also important — employers cannot do much worse than unleashing retrenchment news on a worker who is on maternity leave, for instance. Festive periods or birthdays should also be avoided.

Using the right language is crucial, too, so as not to appear insensitive to an employee’s situation. Ms Chee said: “We’ve heard stories (of human resource personnel saying): ‘Oh, you’ve got money now (from the severance package)… remember the vacation you always wanted to take?”

At the same time, Ms Chee said that human resource leaders themselves have to take care of themselves while conducting retrenchment exercises.

“Every single leader I spoke to said that they never get used to (retrenching employees). It continues to be something that stresses them out,” she said.

“So you also have to look after your own mental health. Don’t go it alone — look for help, look for advice,” she said.

During a panel discussion following the book launch, one human resource professional noted that while the Ministry of Manpower provides guidelines for companies in managing retrenchments, these are not mandatory.

Ms Carmen Wee, who is a veteran HR practitioner, said: “(In many other countries), the laws are set and nobody has any (wiggle room), so it reduces any big headlines around companies trying to take any shortcuts.

“Given that Singapore has flexible guidelines rather than laws, we need to ask ourselves if this is ideal going forward.”

Related topics

labour manpower retrenchment human resource

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