How to Find Alternatives for Retrenchment in the COVID-19 Crisis?

How to Find Alternatives for Retrenchment in the COVID-19 Crisis?

The COVID-19 pandemic, in addition to taking its toll on human health, has also left a severe effect on the economy. It has made a staggering impact on the operations, supply chain and workforce. As businesses slowly try to rebuild, they find themselves with the unenviable task of retrenching employees to cut down their costs.

Though retrenchment is unavoidable in some cases, employers may look for viable alternatives. Considering other possibilities to retrenchment will help businesses in retaining long-standing and efficient employees. Here are the important alternatives to retrenchment that will retain employees as well as prevent business losses.

Explore Short Work Week to boost productivity

Shorter work weeks would mean less time on the job. It offers more flexibility to the employees and could also improve productivity. These shorter work schedules will pave the way for a better balance between work and family life. In addition to this, you may find focused employees with reduced stress and absenteeism.

As per the Ministry of Manpower (MOM), the short work week:

  • should not go beyond 3 days in a week
  • should take effect only if the business performance is drastically affected
  • should not be implemented beyond 3 months

You are required to contact the MOM if you seek to make any changes to the salary structure of your employees.

Redeploy Staff to Alternative Areas of Work

As an employer, you will be familiar with the strengths and weaknesses of the employees. You will also be well aware of their interests and hidden talents. With this understanding, you may try to redeploy them in other areas of the business.

There are various advantages to redeployment.

  • Retain and nurture the most valuable workers and improve productivity among the staff
  • Avoid the time-consuming and expensive task of hiring and training new employees
  • Show your commitment to the existing employees, build trust and enhance your company’s image
  • Reduce the payoff on retrenchment compensations
  • Minimize the risk of litigation


Consider Temporary Layoffs

This is a situation wherein you ask your employee not to come for work for a short period. However, you are required to pay half of their gross salaries and can advise them to take 50 percent of their annual leave. Note that this temporary layoff period does not exceed one month for an employee.

The temporary layoffs are considered more beneficial than retrenchments as they enable the company to retain their competent workers even if they are unable to offer work. During the temporary layoff period, employees may apply for work in another department in the same organization.

Temporary layoffs will help a business in the following ways:

  • Reallocate a significant amount of money within the company
  • Reduced employee salaries will help free-up more money for the company to tackle financial problems within
  • Create a positive image of an employer amongst the public as opposed to organizations that go for retrenchments and permanent layoffs


Enhance Employee Skills through Training

Another effective alternative to retrenchment is to train employees based on their current qualifications and help them to acquire the skills they will need to perform a new job. To conduct these training programs, you need to identify your skills’ needs and check out your training options.

Training/retraining offers many benefits:

  • Raises the qualifications of your resources
  • Offers a long-term competitive advantage to your business
  • Helps boost the employees’ morale in these challenging times

In addition to this, the MOM has come forward with the absentee payroll subsidies, SkillsFuture movement, Adapt & Grow initiative and further government grants.

Other Alternatives to Retrenchment

Further alternatives to retrenchment include:

  • Eliminating overtime pay
  • Freezing new recruitments
  • Reducing incentive trips and bonuses
  • Reducing sick pay
  • Suggesting early retirement
  • Offering work-from-home programs

The crisis of COVID-19 has cast its shadow on businesses and placed workers’ livelihoods at risk. In this situation, it is important to protect the businesses as well as the employees’ jobs with few retrenchments as possible. We, at Jaanik, will help you find alternatives for retrenchment. If you are undergoing a retrenchment crisis in your business, contact us and we will provide the right solution tailored to your requirements.