The harsh reality of retrenchment

This figure is rife and growing on a daily basis. There are various reasons for these cutbacks - some ethical, others not, but at the end of the day - it is still a bitter pill to swallow for all concerned.

Of the 5.25 million unemployed people, about 59% have never worked; of the people between the ages of 15 and 30, approximately 75% have never been employed; and around 26% have been job hunting for one to three years - 41% for more than three years. This equates to an unemployment rate of a staggering 31.2%.

The high unemployment rate among qualified tertiary graduates has been attributed to a mismatch between the kinds of skills and training people receive in the tertiary education sector, as apposed to what is needed in the labour market.

Previously, South African companies have been 'fat' in their employment mechanisms, and the more insight they gain into their operations, the faster they are going on 'diet'. Company cutbacks include retrenchments to prolong their revenue stream; progressive automation and technology allows for fewer employees; people are retrenched instead of going through constructive dismissals; company mergers result in an overlap of skills; and the consequence of disinvestment in our country marks discontinuation of trade.

Fallout

Emotionally, retrenchment affects the whole organisation and is equivalent to a divorce in the family. This ultimately causes unhappiness, fighting, insecurity and unproductivity. The survivors experience a vast amount of guilt, often wondering why they were privileged enough to keep their jobs and question their departure date.

Many companies do not handle this process sensitively or with compassion, and the instability, uncertainty and ineffectiveness caused can more often than not create undue turmoil. This is due to management not been given the correct training or support and is therefore not able to deal with the situation correctly.

If a company implements best practice from inception, their performance will be enhanced in the long run. After following this procedure, GlaxoSmithKline Midrand, for example, boasted a more productive workforce and turnaround after a number of retrenchments they initiated.

It is a recognised fact that people recover from the death of a spouse or child and bankruptcy faster than from retrenchment. This is due to ill preparation, as well as the vicarious living people do through their job, ie, tying it to power, identity, financial security and self worth.

This inevitably results with workers of more advanced age experiencing difficulty with competing in the labour market or finding alternative employment. Uncontrolled use of retrenchment benefits result in loss, both of assets and income, by people who are frequently not in a position to recover from their situation.

For many people, they feel like they have fallen off the edge of their world. These are the stages of shock and loss. While many will actively seek new employment, others will carry on with their daily lives, placing their impending unemployment at the back of their minds.

Dignity

People need to be treated with dignity and privacy. Feeling "done-in" is completely normal. The reaction can be determined and is proportionate to how the news is delivered and the person's state of mind. As many companies haven't performed retrenchments in the past, they tend to cause disorder and chaos within the organisation.

Another issue companies omit when performing cutbacks is the work overload on the remaining people. This occurs when management layers are curtailed or divisions are reduced to the minimum. Businesses prunes off skills they have nurtured and do not think of the impact this will have on the organisation.

There is however an upside to retrenchment... Many people confirm that once they've been through the process, they have been assisted with career enhancement as well as on a spiritual and personal development level. While many people have only dreamt of becoming entrepreneurs, they are forced to leave their comfort zone and are able to fulfil their dreams. These people don't realise that the company is the messenger of their destination - even though it may not seem like it at the time. While change is inevitable, most people will make four career moves in their lives. Knowing this was not their chosen path, people despise this when they are forced to re-evaluate their lives.

What is best practice?
-- Companies need transparency and honesty.
-- Employees can offer solutions, with everyone having an opportunity to save the company and their jobs.
-- Should an organisation need to institute retrenchments, they must obtain expert advice to facilitate the process as the cycle of loss and change needs to get addressed.
-- It is essential for companies to reskill their staff on an ongoing basis. Should this not take place, it can result in people being less employable in the future.
-- A communication plan needs to be set in place. Often over-communication is necessary. It is essential for the survivors to be able to trust their employers again.
-- It is crucial to assist all retrenched staff and ascertain their strengths and weaknesses for the sourcing of new employment.
-- Entrepreneurial support is essential for those who want to start their own businesses, but do not have the correct skills.

Check list for employees:
1. Read the writing on the wall - if it looks like you are going to be retrenched, actively source new employment.
2. Trust your instincts.
3. One is far more employable from an existing job than from being retrenched.