Last week in this section we examined the effects that retrenchment can have on employees and employers; the second installment of this article looks at some practical suggestions on how all parties involved can handle this very difficult experience.

What’s needed is something much deeper and more sustainable. Ghoshal and Bartlett advocate a ‘new moral contract’, where employees undertake to engage in a continuous process of learning that is necessary to sustain star performance amidst constant change. In return, companies undertake to ensure ‘not the dependence of employment security but the freedom of each individual’s employability.’ They do so by providing employees with the opportunity for continuous skill updating so as to ‘protect and enhance their job flexibility.’

This holistic approach is much more than a fresh spin on a company’s old human resource policies to legitimise layoffs. Ghoshal and Bartlett describe it as a fundamental change in management philosophy. ‘No longer are people seen as a corporate asset from which to appropriate value. Under the new contract, they are a responsibility and a resource to which to add value. Its adoption implies a rejection of the paternalism, even arrogance, which underlies lifelong employment contracts. It recognises that only the market can guarantee employment and that market performance flows not from the omnipotent wisdom of top management but from the initiative, creativity and skills of all employees.’

Importantly, this new moral contract also demands much from employees. ‘It requires that they have the courage and confidence to abandon the stability of lifelong employment and embrace the invigorating force of continuous learning and personal development. They must accept that the security that comes from performance in the market is ultimately both more durable and more satisfying than the security offered by a paternalistic management.’

In my work counselling retrenched employees, this mindset shift plays a much more fundamental role than any retraining program. I’ve found that a retrenched person, more often than not, does not require more skills; but rather a way to re-focus the skills they already have.

Take two candidates who were recently retrenched from senior managerial positions at a bank. During their many years of service, they have developed skills and experience that could easily be channelled into successful consulting careers. Their packages also afford them considerable financial security. However, both are paralysed by fear and a sense of rejection.

The fears that arise out of retrenchment render many incapable of making decisions. In the case of two candidates I am currently counselling, there is total terror that, at their age, they will never again be able to accumulate the amount of money they have been paid out. Their perspective is so skewed that they are unable to maintain a realistic perspective or start planning for a future. They are obsessed with the possibility of being destitute.

Nothing has prepared this man and woman for this moment. Their minds are still focused on security – the fact that they joined a well-known bank straight after school, that they worked their way up to senior manager level over 30-odd years, and that they expected to remain there until retirement. That is all they know. They are unaware of how the market has shifted. They are unaware of their own soft and hard skills and how they can apply these in a changing world.

Isn’t it ironic that these are people who have spent years advising people on how to finance their businesses and plan for the future?

One would expect them, with their considerable skills, to be highly resilient, to create new opportunities, change direction and take all this in their stride, excited by the prospect of having another chance to carve a place for themselves and conquer new territory. Yet present ‘company think’ does little to encourage employees to expect, let alone prepare for, change. Even when companies are proactive and train staff in change management, the nature of the organisation and its culture subconsciously trains the staff member to mask those possibilities of change which could result in the staff member having to be retrenched.

When that change comes in the form of retrenchment, I believe that too little is being done to deal with the emotional impact on the whole person, and on the remaining staff. Companies should view all staff members as victims of retrenchment and make sure all staff undergo counselling. It’s also important to understand that the more painless the process is made for those who are retrenched, the more painless it will be for those who remain, since the burden of guilt would be lessened.

Emphasis should be placed on assisting retrenched employees to find a new role in society. Especially where an employee has been with the company for many years, but is not yet of retirement age, the feelings of rejection and abandonment remain with the person for a long time. This is exacerbated when the person is unable to find another job easily or unable to come up with new ideas for ventures they may want to explore or even when they are uncertain of their skills offering.

Companies need to address the following issues with affected staff members:

- What skills do these employees have?
- What are the criteria for choosing individuals for retrenchment?
- What options are these employees aware of to do after?
- Don’t give the person money to ‘buy’ their own retraining, employees don’t always know what they want to do.
- Send the employees for counselling to ensure that they are in the right frame of mind and make suggestions based on aptitude.
- Workshop various options with staff – you don’t become an entrepreneur by default after being an employee for many years.

Where we have worked with companies in preparing staff mentally and spiritually for retrenchment, we’ve found that the people involved began to think more strategically about their own value and strengths, the opportunities outside of the company and the competitive edge which they have to market both as an employee to a new company or as a consultant in advising others.

Where a person doesn’t see any choice, they withdraw into a fatalistic view and often blame others or are shamed by what they see as their ‘defectiveness’. They see themselves as useless because if they were not, the company would not be ‘getting rid’ of them.

For those left behind, fear of meeting the same fate means that retrenchment becomes a dark cloud looming on the horizon. There is an expectation that the ‘axe will fall again’.

When people facing retrenchment are helped to understand that they have choices, they tend to have more confidence in themselves and are more open to exploring various opportunities without fear of failure. Their sense of hope is heightened and they are more positive in their outlook. This has a profound effect on their expectation that life will turn out alright and that life, does indeed, go on.

For remaining staff, especially those implementing retrenchment decisions, this constructive approach to a destructive event comes as a great relief. It can also serve as a gentle nudge towards a new, more realistic and independent approach to career planning for everyone concerned. It contributes toward an employee taking the larger view of what is possible, and while it will not eliminate fear altogether, it certainly assists the person in seeing the pros and cons of having been in that particular job. As the job market flexes and changes in light of the global economic climate, a more flexible approach is needed both by the corporate and the people it employs.

As Intel’s Andy Grove says: ‘No matter where you work, you are not an employee. You are in a business with one employee – yourself – in competition with millions of similar businesses worldwide… Nobody owes you a career – you own it as a sole proprietor. And the key to survival is to learn to add more value every day.’

In counterbalance, Ghoshal and Bartlett challenge companies to pledge their reciprocal commitment to add value to people. ‘The need for significant investments in training and development is only part of it,’ they note in their book The Individualized Corporation. ‘These investments must be made to protect and enhance employability of individuals as much as to increase the productivity and efficiency of the company; to support their broader general education and not just to enhance job specific skills. As Anita Roddick of The Body Shop said, ‘You can train dogs; we educate people’. Perhaps that education should include preparing staff for retrenchment. Or, ideally, educating them to move beyond the outdated notion of job security into a mindset of freedom and self-determination.

About the author: Vanessa Paige is a breakthrough trainer based in Cape Town. Through her company, Mind Magic and Talisman Workshops, she advises companies on sustainable ways to increase the value of human capital. When retrenchment is the only option, she helps companies to prepare employees for the experience. She can be contacted on 082-427-8505 or (021) 981-8210.

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