Our company is losing money due to poor market conditions. We’re thinking of implementing a compulsory redundancy program to cut our manpower costs. Before we finalize everything, please give me your thoughts on other options that we could take before we implement such plan of cutting our manpower size. We’d like to find out if we missed on other worker-friendly alternatives. — First Samurai.
A group of teenagers, obviously without money for admission tickets, milled around near one of the entrances of a basketball stadium. A wealthy-looking gentleman passing by said to the ticket taker in a voice resonant with authority: “Let these kids in and tell me how many there are.” The boys filed in and scampered delightedly inside the stadium.
As the last one entered the gate, the ticket-taker said to the man: “Thirty-four in all!” The man nodded. “Right you are,” he said, as he walked backed and lost himself outside the gate to blend with the crowd.
Having to count and cope with the losses isn’t an easy thing to do. It’s made even more difficult if the workers being targeted for dismissal have worked for the organization over a long period. And you don’t even know whom to blame — is it poor management or inefficient workers?
This is one of the major reasons why redundancy or retrenchment is often difficult to implement even if you follow the legal process. It’s emotionally draining if the people involved have positive work relationships with the workers and the bosses are reluctant to terminate.
Sometimes, even if you comply with the legal process, the result is often not healthy to the survivors’ morale. Therefore, before you turn to the last resort of dismissing people, explore the following common-sense options to help you eliminate, if not minimize possible difficulties that could happen before you even think of retrenchment:
One, stop hiring new employees right away. Sometimes, managers will ask for an exemption to a hiring freeze as soon as they discovered a hot talent from outside the organization. If this happens, be firm.
Two, remove all manpower agency workers. Include part-timers and contractual workers on the list of those who will be dismissed. It would be difficult for management to justify maintaining these people in the face of redundancy of regular workers who may have the right to be retained.
Three, stop all workers from doing overtime work. If there’s no work to do during regular working hours, then how can you justify overtime work? Corollary to this, management must ensure that everyone performs their assigned tasks with actual, tangible results.
Four, allow people to exhaust all their paid leaves. In excess of their paid leaves, allow them to consider taking their sabbatical leave without pay so they can explore working for other organizations here and abroad, pursue graduate studies or consider a business opportunity.
Five, explore a secondment agreement with affiliates. These include the company’s suppliers, customers, subcontractors and other service providers accepting your workers to be assigned to them for a limited period while paying for their salaries.
Six, ask workers and managers to volunteer for a pay cut. Do this for a limited period and reverse it when the company has recovered. Included in the pay cut are bonuses and other gratuities that are often given when the company is earning money.
Last, offer programs to retrain people. Focus on problem-solving activities designed to help eliminate, if not reduce the amount of excessive expenses in the organization. Assign people to work in innovation centers, quality circles or any kaizen team.
The groundwork for minimizing the emotional atmosphere that surrounds an impending retrenchment program should be in place long before any changes are done. This can only happen if management conducts continuing two-way communication with employees. If the people are aware of the situation and of any forthcoming changes, it will help build a strong relationship with management.
Failure to communicate with employees in difficult situations, like in the case of retrenchment, will only fuel nasty rumors that may be disastrous in the short term. Therefore, as much as possible, always try to explain why retrenchment has become necessary, the reasons for it and the potential impact it will have on people, including those who have chosen to stay with the company for reduced pay and perks.
ELBONOMICS: It’s difficult to decide between walking away and working hard.