Commentary: Tough times are no excuse for callous retrenchments
The economic fallout from COVID-19 is unprecedented. All the more reason for retrenchments to be managed with an unprecedented level of empathy and compassion, says PeopleSearch’s Jaime Lim.
SINGAPORE: The worst job numbers in a decade with more retrenchments to come – this is the reality of the COVID-19 era in Singapore.
Globally, the story isn’t much different. Experts have warned the economic fallout from the pandemic will be unprecedented and even massive stimulus may not enable a V-shaped recovery.
Considering these conditions, some employers may argue employees shouldn’t be too surprised if they are let go. It is to be expected.
However, our conversations with displaced professionals have revealed this does not soften the blow of retrenchments. In fact, since the prospect of finding new employment is slimmer today, the pain of being let go is even more acute.
While accepting that retrenchments in certain sectors are inevitable today, they expect the exercise to be conducted with dignity.
THE PROCESS MATTERS
The devil is in the details.
Retrenchment benefits are vital, but just as important are the manner in which people are notified and the type of support they receive thereafter.
Several recent examples have sparked concern and debate over the right way to lay people off.
When Uber retrenched more than 3,000 workers in a three-minute Zoom call last month, it sparked outrage.
In Singapore, the Tripartite Alliance for Fair and Progressive Employment Practices (TAFEP) recommends conducting the exercise “sensitively” and in person with HR personnel and the employer’s manager present, “instead of during a mass meeting, telephone call or through e-mail.”
Pandemic mitigation measures make remote communication inevitable, but that’s no excuse not to arrange one-on-one video calls to make such earth-shattering announcements.
In September last year, Duty Free Singapore came under scrutiny when it retrenched staff abruptly, informing them that they had to leave the premises immediately. Their severance package was also deemed inadequate. This was revised after the Ministry of Manpower and TAFEP stepped in.
More recently, when Grab retrenched 360 employees, some netizens remarked that informing affected employees they were being let go via e-mail was insensitive.
To be fair, CEO and co-founder Anthony Tan had sent out a note to employees in the morning in which he had eloquently explained the reasons for the cuts and apologised to staff.
Employees were told those being let go would receive an e-mail by 1pm that day. Some netizens noted that watching their inboxes to see if they’d get that e-mail could not have been easy.
They were informed that they would be able to speak to their Business Managers and HR representatives personally in the days after the announcement. Should Business Managers and HR personnel have stepped in much earlier to break the news individually to each affected employee?
While some question the process, Grab’s generous retrenchment package has been generally commended.
WHY YOU SHOULD DO IT RIGHT
Ideally, a dignified layoff should constitute both – sensitive communication and fair severance packages.
It is in companies’ interests to do this well.
Firstly, your remaining staff’s morale and productivity are at stake.
A 2002 study by Magnus Sverke and Johnny Hellgren of Stockholm University and Katharina Näswall of University of Canterbury showed that remaining employees experienced a 41 per cent decrease in job satisfaction. Organisational commitment fell by 36 per cent and job performance by 20 per cent.
Being seen as callous in such situations could also alienate your customers.
In the 2019 Edelman Earned Brand Study, 64 per cent of those surveyed described themselves as “belief-driven consumers.”
The study which involved eight markets in Europe, Asia and the Americas, defined belief-driven buyers as those who choose, switch, avoid or boycott a brand based on its stand on societal issues.
How retrenchments are conducted at a time like this certainly falls into the category of “societal issues.”
The reputational damage extends to your employer brand. People would think twice about working for an employer who doesn’t treat their workers with dignity.
This period has proven that just because retrenchments are commonplace today, it doesn’t mean that bad behaviour won’t be called out.
PLANNING THE PROCESS
To be fair, most employers do not relish breaking such news.
But if it has to be done, let’s do so with empathy, care and respect.
Over the years, more businesses have requested help with designing the process leading up to retrenchment announcements. Some begin planning several months before the actual day. This may not be possible if you have to make the cuts sooner, but regardless of how much lead time you have, some basics should not be ignored.
Business owners and CEOs can convey the news on a company-wide level as a start.
However, when it comes to delivering the news to affected staff, at least one member of the HR team and the employee’s immediate supervisor should do so face-to-face in one-on-one sessions. Today, since in person meetings may not be feasible, make sure you’re able to at least see each other on a video call.
HR leaders and supervisors need to be trained to communicate during this session. Let’s face it. Not all of them are natural people managers.
Some consultancies recommend you prepare a script. However, this could backfire if the manager ends up simply reading the script in an impersonal fashion.
We recommend putting yourself in the employees’ shoes. How would you feel if you lost your job during an unprecedented global economic downturn that renders getting a new job harder than ever before?
Think about the impact this would have on your ability to provide for your loved ones. Doing so will help you communicate more genuinely.
While managers need to be prepared to answer questions like, “When will I get my last pay check?”, they also have to be able to manage the individual’s emotions.
In fact, all managers should be trained to do this even if there are no current plans to retrench. The key is to be ready should you not have the luxury of several months to prepare.
Tripartite guidelines include telling employees about the impending cuts before public notice is given, explaining what other measures were taken to reduce business costs before retrenchments were deemed necessary, how exactly the exercise will be carried out and giving them a longer retrenchment notice period.
This gives them the opportunity to let the news sink in and develop their training and transition plan.
Where cuts have to be made more quickly, offering them a salary in-lieu of notice is the humane thing to do.
GETTING THEM BACK ON THEIR FEET
For decades now, experts have been recommending career advisory and outplacement services for displaced employees. Now, more than ever, such services are crucial.
This can be managed by internal HR departments or external parties.
The first step is to address the individual’s emotional state and get them ready for their next steps.
Typically, career coaching involves discussing a person’s strengths and interests. It also helps them identify skills they should acquire and job roles to explore. This is followed by help with resume writing, job interview preparation, networking and job placement assistance.
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In our experience, even if the process doesn’t immediately result in a placement, the majority of individuals feel grateful for the support and it places them in a positive space to explore opportunities.
Companies that don’t have the funds to employ outplacement consultants can tap on resources provided by agencies such as Workforce Singapore and the Employment and Employability Institute.
UNPRECEDENTED TIMES CALL FOR UNPRECEDENTED HUMANITY
Recently, we have observed more internal HR departments getting involved in the process. Several have been sending us displaced employees’ resumes to present to hiring managers elsewhere.
The number of companies helping their employees in this manner today is twice the number we saw during the global financial crisis.
The pandemic has also lent impetus to some, including our firm, to provide outplacement services to individuals on a pro-bono basis if their companies don’t.
Airbnb was commended recently for posting a talent directory comprising the names and profiles of its retrenched employees on LinkedIn in an attempt to connect them to new opportunities.
The economic impact of COVID-19 is expected to be long-lasting and deep.
Likewise, our sense of humanity needs to be deepened and sustained to treat employees with dignity during what could be the most challenging period of their lives.
Jaime Lim is Group Business Leader of PeopleSearch, an executive search firm with a presence in six cities including Singapore.