By Erastus Elia
IT remains the responsibility of company leaders and, to a certain extent, stakeholders involved to periodically review and adjust their business plans and processes. The injection of new capital, changes in leadership, or changing economic circumstances can often lead to reorganisation and restructuring within a company and affecting employees. My view is gauged around the current state of affairs in the country in terms of retrenchments (redundancy, downsizing or lay-off). Our country’s economic outlook or government plans do not favour such plans.
When retrenching employees, the board of directors has a fiduciary duty to ensure that all alternatives have been exhausted to avoid many job losses or any at all. One option that comes to mind for the board, firstly, is to have a checklist of who the current subcontractors, consultants, fixed term employees are to the institution and how best they can minimise their expenses. Other options to consider include a freeze on new hiring, increase in hours of work but with limited salary, reduction in salaries, active performance management, and staff involvement to find productivity gains. It is important to consider whether any of these alternatives is viable in the circumstances of each retrenchment exercise. Secondly, have a firm retrenchment plan focusing on the process and ensure stakeholders such as the employees and union, labour commissioner and or government (in some cases – if it is a parastatal) are constantly communicated to due to its nature of sensitivity.
The retrenchment plan should focus around but not limited to method of selection, voluntary separation, LIFO and FIFO, early retirement, length of service, performance records, disciplinary records, skills, knowledge (qualifications), counselling, and re-call register for possible re-employment. It is not uncommon for job losses to result, and in some cases it may be the only way for a company to move forward and thrive. It is my view that an organisation employing more than 1 000 employees must always conduct such an exercise in phases of say 200 or 300 people per year or so if the leadership is monitoring all activities of the organisation closely, else to pay out severance packages to a large number of retrenched employees will also become a burden to the employer. The selection criterion is so crucial that even your grievance process could be challenged if employees are not clearly communicated to.
One case in mind, for example, you cannot retrench a husband and wife from the same household. In addition, such a procedure, often encapsulated in a retrenchment plan, should be founded on widespread consultation (particularly with workers and their representatives) and should seek to ensure that the selection of workers for retrenchment is based on principles that are fair and transparent and do not discriminate against particular groups. Once all this is in order, prepare the tools and procedures to effect the retrenchment.
In my view, no consultant should be brought in to manage the process but the Human Resource team to be the custodian, assist with the entire process and guide various departments. Two or three committees must be formed for employees to query on possible pay outs if s/he is to volunteer or if terminated, briefing committee on information (your communications department), your wellness department to focus on counselling, etc. Carry out assistance programmes like NamDeb did in 2004/5 for entrepreneurship.
It is my plea that retrenchment disagreements between stakeholders is not something to be publicised as it is a serious and sensitive matter that carries a huge emotional and psychological effect to those affected. It is my wish and hope that stakeholders keep an internal communication more active. The economic performance of our country does not allow us to retrench on a large scale but in phases with agreed performance indicators on organisational renewal.
The latest statistics during the last quarter of 2104 shows that 51 percent of all households derive their income through salaries and wages, hence my view on how we should look at retrenchments in the Land of the Brave. I invite your views.
*Erastus Elia is an HR practitioner with more than 17 years’ experience.