- Parent Category: Human Resources
- Published Date
Cost cutting in an economic downturn is often necessary to ensure a company’s profitability and competitiveness. With the salaries’ bill often being a company’s single biggest expense, people are a prime target for cost reduction which has led to a global trend of downsizing.
There is no easy way to conduct this retrenchment and as an employee there is no way to control it.
However, as Sutton (2009) highlighted, it is often not what is done but how it is done that can make all the difference in terms of how the individual copes with retrenchment.
Being retrenched is traumatic. Not only does one have to deal with the embarrassment and panic of losing one’s job but also with the harsh reality of a future loss of income.
Through the experience of counselling retrenched individuals and research on the topic, it has become evident to me that there is a typical cycle that retrenched individuals move through. It is not a single event that just happens.
The first phase is obviously the emotional reaction to being retrenched. Emotions experienced are diverse and include anger, embarrassment, self-blame, panic, depression etc.
These are very normal reactions and affected individuals will experience all or some of these emotions, and sometimes re-experience them. They need to express their feelings, not bottle them up, and often this is difficult to do at home as their families are also affected by the retrenchment.
The retrenched individuals may feel they cannot talk to their family members whom they feel may already be burdened by the retrenchment. The emotional experience of being retrenched has often been likened to the Elizabeth Kubler-Ross’ stages of mourning which include the phases of denial, anger, bargaining, depression and acceptance.
In a normal grief reaction individuals will pass through these phases in their own time. Similarly, retrenched individuals will pass through these emotional stages as they mourn the loss of their job.
Once emotions have been adequately dealt with, individuals enter the phase of acceptance which leads to future planning which is critical in the reintegration process.
The danger, however, lies when individuals get stuck in the emotional phase. Being overwhelmed by emotion can immobilise the individual from thinking rationally and planning for the future.
Positive actions such as compiling a CV or strategizing how to market oneself can seem an impossible task.
For the decision makers in a company, the idea of retrenching staff is extremely stressful and the management will also experience an array of emotions from anger, then depression and by the time they present to the staff, they have passed through this emotion as they have grown accustomed to the idea of the retrenchment.
For some managers, compassion to the employee, which is so critical at this time, is then sometimes extremely difficult to display. Their role is to execute a retrenchment and to do this they need to curb their emotion.
As a result, managers are often not able to provide the emotional support required by the affected individuals in order for them to progress to the phase of acceptance.
In my experience through conducting retrenchments as well as facilitating retrenchment counselling, whilst the legal requirements in a S189 Operational Requirements Consultation do not prohibit the employer from discussing the retrenchment with employees individually, it can be impractical due to the number of staff who could potentially be involved.
For the staff member, a common reaction is fear, disbelief and sometimes a feeling of betrayal that their manager, with whom they have a close relationship, did not have the decency or sensitivity to warn them or discuss with them this life altering event on an individual basis.
This can create an initial impression of the company ‘handling the retrenchment badly’. Little does the staff member know that whilst S189 doesn’t prevent a softer, more humane approach, managers are so afraid of failing to follow the legislated steps of the process that they often do nothing other than follow those steps to the letter of the law and no more.
Their desire to be found to be fair at the CCMA overwhelms their wish to be empathetic and caring to their soon-to-be-ex-staff members, especially given the potentially huge financial price of such a failure.
Given that it is extremely difficult for the internal staff involved in the retrenchment process to provide adequate support required by affected staff during a retrenchment process, an objective external provider can often assist companies through the provision of focused retrenchment counselling.
The core purpose of retrenchment counselling is to help the individual cope with the emotional reactions and then to become energised and motivated so that they are able to start planning for the future. Guidance on CV preparation, sourcing and responding effectively to job advertisements forms part of the retrenchment counselling process.
This approach to retrenchment counselling is structured and can be conducted in two sessions on site to prevent too much disruption at work. Where more complicated reactions are encountered, these individuals may be referred to external psychologists for further assistance.
Companies can, and do, say it is the responsibility of the affected individuals to arrange their own counselling if they feel they need it and technically, they may well be found to be correct and adhering to the letter of the law.
However, the spirit and intent of the law might be better served if, instead of abdicating their responsibility in the emotional side of retrenchment process, they accept that responsibility and use counselling as a way to mitigate the adverse effects of the dismissal as stated in S189(2)(iv).
When an individual has been retrenched, the last thing they are likely to spend their savings on is counselling for themselves. There is pressure to remain ‘tough’ in these times and the individual is left to cope on his or her own.
Investment in counselling by the company for retrenched staff is minimal compared to the return on the investment which will be experienced by the individual, as well as the perception it creates with remaining staff at the company.
There is an enormous emotional backlash in companies where downsizing has taken place. Colleagues who are fortunate enough to have retained their jobs in a company that is carrying out retrenchments are also affected by the retrenchment of colleagues.
Some may feel relieved and some guilty that their jobs were spared. Some start living with the fear that they might be the next to go. “The way many companies conduct large-scale downsizing decreases efficiency, morale, and motivation on the part of remaining employees.
"It also increases voluntary turnover among high performers and compromises a company’s ability to attract strong talent in the future, as potential employees wonder how risky it is to take a job there." (Guthridge, McPherson, Wolf, 2008).
Reducing staff can have major implications on the internal culture as well as the external reputation of the company and it is not easy to rebuild that reputation once the culture has been damaged.
Steps such as offering retrenchment counselling can help protect a company’s brand by highlighting its commitment to their employees who remain as well as making retrenched employees feel nurtured throughout the process.
Furthermore, I believe that organisations with a conscience have a responsibility to ensure that retrenched employees do not ‘get stuck’ in the emotional reaction phase of the process.
Through offering retrenchment counselling to staff, this can be avoided and they can ensure that their staff are well positioned to take up new career opportunities and move forward in their life.
All parties win from investing in retrenched employees, so companies should take responsibility: through an investment in retrenchment counselling, what could be the lowest point in an employee’s life could be turned into an opportunity to facilitate the employee’s transition to a new job, and demonstrate the values of the organization in the process.
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