Issues
The art of letting go
Tan Jee Yee | 03 Mar 2017 00:30
There are many parties to manage during a retrenchment exercise, including the public and people you want to hire or rehire eventually
Recently, the executive director of the Malaysian Employers Federation (MEF) Datuk Shamsuddin Bardan said at a press conference that he believed more workers may be retrenched this year, as the weak economy and disruptive technology in some industries could see more bosses reviewing their workforce requirements.

He also said that in 2015, about 44,000 workers lost their jobs. Up until September last year, an additional 40,000 workers were retrenched, and seeing that complete data for 2016 has not been released by the authorities yet, Shamsuddin believes that the numbers could be higher.

His sentiments echo that of Human Resources Minister Datuk Seri Richard Riot, who said that retrenchments could last until 2017. “(Retrenchments) will spill (from oil and gas industry) to other industries such as banking,” he told reporters in Kuching last year.

Retrenchments sound easy on paper, which is why it’s usually among the first things organisations turn to when cost cutting is needed. Sometimes it’s a necessity but sometimes it isn’t. Regardless, it’s important that organisations perform their retrenchment processes right. It’s not a matter of legal concerns either – there are many things at stake during the act of letting go, and it’s vital that organisations pay heed.

Retrenchment exercises, especially on a large scale, often draw the eye of many other parties – the public, the government, other organisations, and the people still working within your organisation.

“There are a number of stakeholders and constituents and you have to try and manage all of those. I think you cannot underestimate how many parties you need to take care of,” Shahryn Azmi, CEO of Corporate Development Centre (CDC) Malaysia, says. In this case, managing the retrenchment process becomes important because the organisation’s reputation may be at stake.

“If you care about your reputation, doing it well (retrenchment) has value in many areas for a company,” he says.

Each company has different stakeholders and the respective checklists to tick. The challenge for organisations is to ensure that communicating the retrenchment process to all parties is consistent.

“For clients, business partners and customers, you want them to know that the quality of the product or service will remain the same,” says Shahryn.

“That’s different from talking with people who could join you in the future, and it’s different for the people you’re letting go, and their families.

That’s hard because you have several groups that you might think should be told different stories; but not really – the story needs to be the same except crafted a bit differently.”

Turn to pages 01-02 for the full story in the latest issue of Focusweek.