Why Do We Need Tripartite Guidelines on Managing Excess Manpower?

I had the opportunity to be involved in an outplacement exercise recently.

The company in the financial sector had to downsize their operational staffs and about a dozen staff were affected.

One of them had been with the company for more than 10 years; another one (let’s call him Peter*) was very close to reaching his 25-year anniversary.

Unfortunately, that didn’t happen as he and his colleagues were recently retrenched.

Retrenchment
Retrenchment

Lack of career advisory before 2000s

If you look back at the history of career advisory in Singapore, career advisories only came along in the early 2000s.

WDA was formed in Sep 2003 and e2i only in 2008.

The generation of professionals that were already out in the workforce at that time has little, if not none, career planning.

And given the prevalence of lifelong employment by the organizations then, professionals naturally didn’t have the desire or motivation to skill up.

When the downsizing occurred, most were not prepared especially in the face of skills obsolescence and irreversible macroeconomic changes.

Increasing number of retrenchments in Singapore

The recent spate of retrenchments is increasing by the day. And the situation causing these retrenchments appears to be different from the ones we have seen before.

Rising Retrenchments in Singapore
Rising Retrenchments in Singapore

In the various cyclical unemployment periods we had before, we faced a sudden dip in demand for goods and services. Companies possessed too many goods or overcapacity to produce, but couldn’t find enough buyers.

After taking a tighter control on expenses temporarily to balance the books, things would go back to normal once the dust has settled.

If you look deeper into the reasons for unemployment we are having now, they are very structural in nature.

Types of Unemployment
Types of Unemployment

Job losses in the various industries are gone and won’t be coming back

With better connectivity across the globe, outsourcing non-core functions to neighbouring countries are becoming very tempting. A call center professional in Philippines would cost a fraction of one in Singapore.

Asia salaries
Per Capita Income in Asia

For Peter, his role was in managing banking systems. Most of the systems are legacy in nature and most banks have already outsourced such functions to vendors such as HP and IBM.

These vendors in turn service these banks with employees based out of India.

With close to 25 years of experience handling banking systems that are in declining demand and facing stiff competition from abroad, getting into another role that values his specialized skill sets is tough.

And it takes time to figure out what those roles are and work his way back to what he was used to earning, if he can even find a willing employer.

unemployment-cartoon

Why the need for Revised Tripartite Guidelines on Managing Excess Manpower?

Hence it was really timely for the introduction of revised tripartite guidelines on managing excess manpower.

Labour MP Mr. Patrick Tay posted key guidelines on his Facebook page:

  • Retrenchment, though an employer’s prerogative should be executed as a last resort when managing excess manpower;

  • There are many other interventions such as shorter work-week, re-deployment, flexible wage system and re-training/upgrading etc. without the need for retrenchment;

  • If retrenchment is to be done, it should be carried out fairly, responsibly and sensitively;

  • There must not be discrimination/victimization in the choice of those being retrenched;

  • Early Notice – Do provide early and sufficient notice to affected employees. Be sensitive, avoid retrenching/serving notice just before festive season like Chinese New Year and Hari Raya etc.;

  • Communicate- Do give open and transparent information about the rationale and reasons for retrenchment to circumvent second-guessing;

  • Do pay retrenchment benefits as majority of employers pay it even when not provided by the employment contract nor prescribed by law;

  • When paying retrenchment benefits, do note the industry practice and packages paid out;

  • Employment facilitation – Do provide outplacement services and counselling or work with organizations like NTUC which offer such at no cost.

  • Employability – Employers to support and ensure their workers stay employable…through skills upgrading and second-skilling to stay ready, relevant and resilient.

If you think about it, these are really all common sense.

Would you like to be laid off prior to festive seasons?

Retrenchment during Christmas New Year festive season
Retrenchment during Christmas New Year festive season

As if the trauma of losing a job isn’t bad enough, you probably will hide the facts from your family members while putting up a smiley face.

If you’re the one handling retrenchments, what should you do?

It is really not doing unto others what you don’t want others to do unto you.

Breaking a bad news is hard but handling it badly is even worse. You won’t appreciate your partner sending a WhatsApp to initiate a breakup.

Start with these ten guidelines if your organizations are looking at the same predicament.

At the end of the day, these are fellow workers we are talking about.

About the author

Adrian Tan

Adrian Tan is CEO of The Resource Group, a boutique HR Consultancy that focuses on helping SMEs. Before this, he was the MD of RecruitPlus which he co-founded in 2004 and led to two HR Vendor of the Year award. He was named the HR Entrepreneur of the Year by SHRI in 2013. He blogs regularly on #Entrepreneurship and #HRTech on adriantan.com.sg.

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