Things to consider before you retrench

Whenever a worker is retrenched, it’s not just one person losing an income.

Whenever a worker’s retrenched in SA, it’s not just one person losing an income. Employees have a high number of dependents. So, before choosing retrenchment, do your best to find another way.

Alternatives

Reduction in work Employees may be open to working shorter weeks, fewer hours, or shorter shifts. They’ll have some income and are free to look for a second job or another position, hopefully making retrenchment unnecessary.

Reduced pay A small pay reduction across the entire workforce won’t be as hard felt. Conversely, freeze increases until the firm recovers.

Voluntary retrenchment Some workers are more desperate to keep their jobs than others, who may want a reason to move on. Those not aligned with the company’s mission or values are more likely to leave.

Reduced benefits Some benefits are required by law; others can become bloated. Reducing benefits gives a business the chance to rationalise expenditure.

Redeployment Move willing employees to other departments where their abilities are needed, or train them to take on new duties.

Eliminate overtime Having to work overtime should drop with an ebb in business and companies can safely cancel overtime. However, employment contracts usually require staff to work after hours sometimes without pay, so extra hours could fall under this clause.

Freeze new hires Organisations can stop hiring. However, new skills may be required for new systems and processes. Try to upskill current staff.

Increased duties If a business has enough work but can’t fund the required workforce, extra duties could be shared by current employees. Tell them this is a retrenchment alternative and their efforts are appreciated.

Placement assistance Companies should help place employees in new jobs. They have large databases and strong business networks. Even a bulk e-mail or LinkedIn post could exponentially increase each retrenched worker’s opportunities.

For employees

New technologies and improved business processes can also lead to positions being made redundant. Skills common five or 10 years ago may no longer be needed. Avoid retrenchment by retraining for jobs currently in demand.

Remember, changes in terms of service require employee consent.

Cathie Webb is director of South African Payroll Association