5 ways to manage manpower without retrenchment during a slowdown

(PHOTO: Reuters)

By Durrah Hamdan

As the Singapore economy continues to experience a slowdown and undergoes restructuring, a number of companies have announced job cuts or hiring freezes to manage their costs.

The latest to join the ranks was Singapore Press Holdings, which plans to cut up to 10 per cent of its workforce and merge its tabloid publications The New Paper and My Paper.

Is retrenchment the only cost-cutting option available to companies in a slowdown?

According to the Tripartite Guidelines for Managing Excess Manpower, companies should consider ways other than retrenchment before cutting jobs.

In Singapore, these five companies carried out measures other than restructuring to cut costs and save jobs:

1. Redeployment

Pepperl+Fuchs was forced to reduce operating capacity due to a sharp drop in orders.

Initially, the company wanted to retrench 30 workers but after negotiations with the union, it redeployed its excess manpower and cancelled its retrenchment plans.

The company also cut back on other costs such as traveling, electricity and water expenses.

2. Fewer work days

In 2009, Panasonic Refrigeration Devices Singapore held talks with the union to implement cost-cutting measures such as overtime restrictions, a 12-day plant shutdown and voluntary leave clearance.

These measures helped the company to avoid laying off permanent staff.

3. Flexible work schedule and wage system

During the global financial crisis, Energizer saw a 50 per cent drop in production volume over a few months. After discussion with the union, the company reorganised its employees’ work schedule from a five-day work week to a four-day work week.

For lull periods with fewer orders, staff went home earlier and were paid less. Permanent workers managed to retain their jobs.

4. Send staff for training during downtime

Hoya Magnetics Singapore had to shut down for three months in 2009, which affected 550 employees.

The company partnered with the union and e2i to plan a series of courses to send the staff for training almost every day during the shutdown.

It also provided transport allowance for staff and the government’s SPUR initiative covered absentee payroll costs for Singaporeans.
 
5. Top management taking a pay cut

In 2008, CapitaLand Group CEO Liew Mun Leong took a 20 per cent pay cut in a company-wide exercise that saw pay cuts of between 3 per cent and 20 per cent, with mainly top executives and managers affected.

It was not the first time CapitaLand has cut costs to save jobs this way – the company also cut the pay of their management during the past recessions in 1997 and 2001. No one was laid off then.

Liew said then that retrenchments carry a cost in loyalty dividends and erode management’s moral standing. “You cannot treat people as dispensable items – in good times we want you; in bad times, we don’t want you,” he said.

Durrah Hamdan is a workforce analytics consultant with Drake International and is a council member at the Singapore Human Resource Institute.