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SINGAPORE: Restructuring and retrenchments may be common during tough times, but not all firms are conducting them properly.
A recent survey on severance practices has ranked Japan top in Asia Pacific, while companies in Singapore and India were ranked at the bottom.
Many jobs were cut in the financial services sector in the wake of the global financial crisis and human resource consultants said how a company treats staff on their way out will affect their ability to hire talent in the future.
A latest survey conducted between July and September last year showed that more companies were aware of good severance practices, with those in the United States leading the pack. 80 per cent of firms in the US have in place formal written severance policy.
In Asia Pacific, Japan was ranked top, with 90 per cent of firms having a formal severance policy, followed by Australia (86 per cent) and China (77 per cent).
But Singapore and India were ranked at the bottom of the list, with less than 30 per cent of companies establishing formal written severance guidelines.
Manpower consultancy Right Management, who conducted the survey, said this is because Singapore is still in its maturing phase where human resource practices are concerned.
Aside from that, many multinational corporations based in the city state have a global severance policy in place.
Ronnie Tan, managing director, ASEAN & Korea, Right Management, said: "What the region can learn is to look beyond what is required of the law. They have to look beyond just money benefits... by providing out-placement services, helping them transit to new career and taking care of their employees' emotional needs."
Consultants said companies must also involve workers in the restructuring process. Studies have shown that highly engaged organisations are 44 per cent more likely to generate higher revenues and retain customer loyalty.
Experts said companies may incur some costs by implementing a range of severance benefits. But the long-term gains will be felt in terms of building the company's image, attracting talent or motivating existing staff.
The survey polled over 1,500 HR practitioners and senior managers across 19 industries in 28 countries.
- CNA/so
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