The Covid-19 pandemic has severely affected the South African labour market, with the overall unemployment rate rising 2.3% in the second quarter of 2020, according to the latest Stats SA Quarterly Labour Force Survey Quarter 2: 2020 results. Several large retrenchment exercises have also made the news recently, with some companies having to lay off up to 40% of their staff.
Retrenchment may sometimes be a necessary part of securing the future of a company. Developing and employing a responsible retrenchment procedure can achieve the commercial benefits of the process, while minimizing the impact and effect of job losses.
Here are some tips to help make the transition smoother for both the employer and employee:
1. Open communication
Keep communication open. Creating a communication plan for the retrenchment exercise, will help avoid mistakes or misunderstandings. Your communication plan should include the business rationale for the retrenchment and measures taken previously to mitigate it, how the exercise will occur, and whatever information the company can share about the basis for retrenchment.
2. Face-to-face sessions
Inform those who are affected via a face-to-face meeting, rather than through a conference call or mass email. Ensure that you include HR and the employee’s manager in this meeting to address any concerns the employee may have.
3. Adequate severance packages
According to local Labour Legislation, a retrenched employee must at least be paid 1 week's pay for each completed year of ongoing service, unless the amount specified in any policy or his/her employment contract is larger.
4. Agency support
In addition to an adequate severance package, consult with the various agencies to gain access to information on government schemes and subsidies to help affected the staff during the transition process.
5. Job-seeking assistance and reskilling/upskilling
Provide affected employees with all the relevant information needed in their job search. These include referral letters, payslips, training certificates or other documents. Network within your industry to help affected employees search for new positions and/or engage career coaching or reskilling/upskilling services. Learn more about iLearn’s retrenchment reskilling/upskilling solution here - an annual subscription for each affected employee to over 700 online, microlearning courses for only R2,495.
Retrenchment affects the livelihood of employees. Handling it responsibly and sensitively can help them cope more easily with the process and move on to find alternative employment.