Turn Dreaded Retrenchments into the Next Great Step

Turn Dreaded Retrenchments into the Next Great Step


In South Africa and abroad, the world of work is changing fast. New technologies and work tools, changing demographics, and mounting economic pressures are forcing companies to rethink the way they do business. This naturally involves taking a closer look at ‘people practices’, skills requirements and employment strategies.

Locally, while small and medium sized businesses are undoubtedly impacted, it is the large and more established corporates and traditional business models that are undergoing a more fundamental makeover. Given the country’s challenging economic environment, paired with rigorous transformation policies, this ‘makeover’ is increasingly translating into higher rates of retrenchment.

While retrenchments used to be a fairly rare and drastic action among major corporates, it is becoming a far more frequent and commonplace occurrence in the local business landscape. Those who are being most severely impacted are higher level/senior and highly skilled workers, as well as more junior employees.

Related: Does Your Staff Dislike You?

Doing More Harm than Good

As recent examples have demonstrated, while retrenchments are being implemented to cut costs, streamline business operations, and make way for new skills and demographics in the workplace – many companies fail to put processes in place that take into account the needs and well-being of the outgoing/retrenched staff members.

This failure often results in severe reputational damage: retrenched staff go out into the world armed with a fiercely negative sentiment towards their former employer; media latch onto and create sensationalist stories of unfair and callous dismissals; and current employees start to fear for their own positions and question the values and principles of the company they work for.

None of the above is helped by the fact that in general, retrenchment processes are not being well managed. Often, they are simply seen as a compliance process (to Section 189 of the Labor Relations Act) in order to mitigate the risk of legal action by employees.

Empowering People

While there is clearly no way to avoid retrenchments in an increasingly cutthroat corporate world, there are strategies that can mitigate and soften the negative effects – for both the departing staff members and the company in question. One of the most powerful strategies is the implementation of a comprehensive outplacement programme, which seeks to empower individuals to view retrenchment as an exciting step forward (as opposed to a debilitating step back).

On a broad level, effective outplacement initiatives help people to understand and recognise the need to reinvent themselves in the workplace – and how to go about doing so. Particularly among more senior and highly qualified professionals, outplacement can provide an invaluable perspective on ‘where to now’.

This requires a focused and tailored combination of coaching, mentoring and providing psychological support – all of which should address the needs of both individuals and affected groups. It must be noted that there is no one-size-fits-all in outplacement – any successful programme needs to be carefully customised for each scenario.

Related: Your Office Guide to Swearing At Work

Back to Basics

The core components of a strong outplacement programme will include:

  • A formal debriefing, during which the retrenched worker is encouraged to take stock of his career in relation to his stage of life
  • A profile assessment which covers technical skills, experience and personal factors; this should provide clear insights into how the individual is perceived by the marketplace
  • A re-evaluation of goals, ambitions and dreams
  • An understanding of what drives change and new ways of working
  • A focused plan: acquiring new skills/education, personal branding, CV writing, interview and negotiation training, etc.
  • Learning Effective Career Management:
    • Doing what you want to be doing – because it inspires you
    • Doing what you should be doing – according to your inherent strengths
    • Effectively managing career stages to achieve objectives

When considering the implementation of an outplacement programme, it is useful to remember that the public and press only hear about retrenchments within a company when they have been badly managed.

Companies seldom realise that it is far more difficult to restore and repair a tarnished reputation as an employer than it is to plan ahead and protect their brand equity (and the goodwill that is vested within it). From a commercial point of view, an outplacement programme also reduces the cost of labor action through the CCMA and large out of court settlements.

Also, in an ongoing and increasingly competitive global war for talent, companies need to be more conscious of their people practices and how they are perceived as employers. Numerous studies have shown that top talent is drawn to organisations that are seen as values-driven, ethical, forward thinking and transparent.

While it should be one element of a larger strategy, effective outplacement can undoubtedly provide companies with a valuable and straightforward way in which to engender trust, spread goodwill and positively impact both former and current employees.

Related: 4 Ways to Diffuse a Toxic Workplace

Craig Spalding
Craig's personal drivers are quality, value and professionalism. It’s important for him to operate within an environment that is distinctive and sincere. Craig is energised by the success Tuesday Consulting achieves through following good business practice and principles. He believe in hard work, having fun and celebrating success.