HOW INHUMANE COMPANIES RETRENCH BADLY

Another week, another retrenchment.

Resorts World Singapore laid off about 375 employees following what the integrated resort said was a review of “its operational resources” amid falling profits in the gaming industry.

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RWS

CIMB laid off a dozen staff from its broking business in Singapore. The move came amid a dull period for the Singapore equity market.

One silver lining came when Jurong Country Club recently announced their staff would get retrenchment benefits (after the Attractions, Resorts and Entertainment Union intervened).

Yet, even though Ministry of Manpower came out with an updated version of the Tripartite Guidelines on Managing Excess Manpower and Responsible Retrenchment, they are still what they are – guidelines.

Rising Retrenchments in Singapore
Rising Retrenchments in Singapore

Reality often paints a difference picture from what we expect it to be.

How did two companies badly manage mangle their retrenchment exercises?

Case Study #1: PURPOSELY GIVING  EMPLOYEES BAD GRADES

Look at what happened to Peter (name changed to protect individual identity).

He was working in a Japanese company that specializes in construction, engineering, procurement, oil & gas.

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Decline in Oil & Gas industry

Given the economic conditions, that industry isn’t doing well. The company started their retrenchment exercise late 2015.

According to Peter, the way the company chose who to retrench wasn’t carried out professionally.

The HR department started by opening up everyone’s performance appraisals of respective staffs and requested managers to “moderate” the scores.

By doing so, an employee who was once an B will get dropped to a C for example, and then retrenched, without justifications made to the affected staff.

The whole experience was made worst with poor overall HR practices and a huge lack of compassion.

Case Study #2: NO CLEAR COMMUNICATION TO STAFF

One would think bad HR practices are isolated cases, but they are keep popping up instance after instance.

Mary (name changed to protect individual identity) was part of her company’s recent retrenchment exercise.

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Retrenchments are painful for staff

While she had noticed all the early retrenchment warning signs up, there was never any proper address nor any statement from the senior management when the retrenchment took place.

The staff was called in individually to the Director’s office where each staff was told that the company has to retrench due to a major reorganization, and the future of the company will continue to be uncertain for a while thereafter.

During that time, only two staff members were kept in the loop (at least for the next couple of months), and nothing was shared with the rest.

The whole process obviously could be handled with more transparency. Granted it is not a pleasant exercise to undertake, it can only be made worse with a veil of secrecy over it.

Mary and her colleagues were given some retrenchment benefits but the way the whole exercise was handled could only point to sloppiness.

One could allude to the fact that the company doesn’t really have an HR department. But then the directors are all supposed to be well-experienced people who possess decades of corporate experience.

DON’T BE THAT INHUMANE COMPANY

There are many of such badly-handled retrenchment cases which are probably going on but left unspoken of.

But they all come with a consistent theme.

The company doesn’t do well in a bad market, shows signs of struggle, and eventually takes the most heartless, unprofessional and opaque approach to conducting their layoffs.

Is Swiber a sinking ship?
Is Swiber a sinking ship?

Just check out how Swiber changed its mind from sudden liquidation to judicial management in the past week. Imagine how sea-sick its employees feel.

If a retrenchment really has to be carried out, the whole affair should be handled in the most compassionate and sensitive manner.

It is the last time your company has to speak with the affected staff so make it count.

Unless you (as the CEO or HR director) have a total disregard for the future of your company reputation, what you do now will turn around and bite you in the future.

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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