Downsizing & Retrenchment : A More Dignified Exit for Employees

The plain truth is that many organizations in Malaysia are shedding their work-force as one of the strategies to weather the current cycle of economic down turn. The reality is also that not many seem to be doing it the right way.

In industry parlance, this is called transiting employees out of the organization. It is rare that an employee does not suspect that he or she is next on the chopping block. They would have heard through company grapevine and from hints dropped at team meetings that some form of workforce reduction will take place. Yet, when the news is finally delivered officially, many employees still go into a state of shock. I suppose there is a difference in actually hearing it from one’s manager. One can only imagine the fear and desperation setting in when the whole inevitability of the matter sinks in. Denial turns into fear which turns into anger than to self-blame and finally to despair. An unfortunate and entirely avoidable situation really, if only organizations take a little bit of effort to manage this more humanely.

Unfortunately many organizations, big and small, do not prepare their managers and supervisors to manage employee transitions well. Affected employees are often notified in a manner that is either overly business like or too apologetic. Both will not do any good for the organization and for the affected employees . Being overly business like may give the wrong impression that the organization is not emphatic while being too apologetic gives out the message that the organization feels guilty for doing something that is ‘wrong’; which in actual fact is not. Reducing head-count is well within the prerogative of the employer especially when it is justified. An uncertain economic climate, recession in our key export markets, impending recession in our secondary markets and a topsy-turvy raw materials cost are all very well justified causes for why any organization would need to keep its costs low and manageable. However, as much as it is well within the prerogative of an organization to hire and fire, I believe that in the long run Malaysian organizations will reap far more benefits, both tangible and non-tangible, if they conduct their employee transition exercises in a more enlightened way.

I suspect that many organizations don't see the need to invest the time and resources to do employee transition in the right manner because they feel it is a wasted investment. After all the employee is leaving the organization. Herein lies the shortsightedness of many. Ensuring an employee is properly transited out of the organization not only benefits the departing employee but also the organization in the long run vis a vis the feel good factor created for those who are still in the organization. How would an employee who is not affected in the work-force reduction view the organization when he sees his colleague being unceremoniously dumped out of the organization? How motivated will he be to stay on with the organization? Or, will he spend his days thinking about his own uncertain future? On the other hand, how about the hundreds of people the affected employee is going to come into contact post-termination? How will he portray his previous employer? What kind of stories and images will his family and friends make up about this organization?

It is not enough for organizations to extol the value of their ‘people asset’ during the good times. It is far more important that they show that same appreciation to their employees during difficult times. If you want to attract the best talents in the future (recession doesn’t last forever!) you need to create an image of your self as a caring and humane employer.

Having said that, managers and supervisors should not be expected to automatically be able to conduct employee transitions more effectively. This is a skill set, mind set and tool set that needs to be acquired. It is learnable. All it needs is the will to do the right thing.

I pray that Malaysian organizations treat Malaysian workers with a little bit more respect and dignity in these trying times. I hope they will do what is right rather than only what is expedient.