Category: Career, Finance & Product

Let’s talk about retrenchment as it is a very timely topic.

Left and right, we hear about companies letting go of their people. The tourism industry was greatly affected and so companies in the aviation business started laying-off their people as early as March. Tourist destinations were closed and the usually crowded places like Baguio imposed a very strict lockdown protocol that even their locally stranded individuals (LSI) had a hard time returning home. And just when we were getting used to the Airbnb services, these too were directly hit by the pandemic.

What could be one of any organization’s challenging decisions than letting go of their GOOD employees?Certainly, we’re talking about those employees who are performers; those who would walk an extra mile just to get the job done; those employees whose reliability cannot be questioned; those who would sacrifice a little comfort just to deliver; those who are respectful and team-players; those who are smart and do not need much supervision; those who have no attendance or tardiness problem because they respect everyone’s time. In short, who in their right minds and fair hearts would let go of such employees?

We all want to have good employees on our team. And the worst part of this Covid-19 crisis is the decision to let go of the good ones. Thus, it is forgivable if some companies find it hard to tell the employment status of their good employees. Maybe they’re avoiding the drama. Perhaps they’re thinking more than thrice if they can still reverse the management’s decision. Possibly, they just want their good employees to take the cue and leave.

But, should management keep silent on their manpower plans and just wait for the right time to announce the lay-off? Surprisingly, the answer must be YES.

Yes, the management should avoid any pre-mature press release until the following are final: 

1. retrenchment package
2. reorganization
3. turnover plan

Under Article 298 of the Labor Code, companies are allowed to scale down its operations in order to save themselves from further losses. Retrenched employees are given either a full-month salary or a half-month salary x 15 days x years in service—whichever is higher. Please take note that this is just a basic computation as packages differ from company to company.

The company must ready the reorganization plan because letting go of people means the transfer of tasks to the employees that will be left behind. On the other hand, some companies assess their workforce and redesign the table of organization to simplify the roles and tasks. The challenging part of the reorganization is assigning leaders who are capable of unifying their members to achieve the company’s new goals. Don’t forget to consider the concerns of those employees who would be left behind because there could be undocumented tasks that they are doing that could add to their workload. In short, re-organized tasks must be written because new KPIs and deliverables are expected to emerge from these changes.

Once the reorganization plan is done, it’s now time to talk to the employees that would be retrenched to prepare them for the turnover activity. Retrenchment letter must be sent to the concerned employees by mail or through e-mail. Definitely, it pays to be transparent and empathetic, too by informing them ahead of these notifications about their employment status. Effective communication and honesty are important when telling people about their work termination because if not, the turnover plan will not be successful.

Bosses can also offer to recommend the retrenched employees to other companies who might need their services. It is called an outplacement program. It creates a friendly exit between the bosses and the employees instead of bad memories. Who knows, you’ll end up working in the same company someday. Even luckier, what if your former staff becomes your boss or CEO years later? Nothing is impossible, right?

When it seems that there is no hope, remember that good employees never run out of jobs; whenever, wherever.

We are not just talking about employment opportunities here but other activities that are income-generators, as well. There’s a story about a flight attendant who used her cooking and baking skills to sell foods while on lockdown. I personally know of retrenched employees who put up a sari-sari store, a motor shop and also those who turned turned pottery and plant hobbies into business. The shift to homebased jobs or online jobs through the freelancing sites also give people an opportunity to earn while taking care of the household. It takes a lot of courage to start over again in these difficult times. I call it a leap of faith.