The Axe Is Never Far Away, Are You Prepared For Retrenchment?

The word ‘retrenchment’ never fails to send shudders down the spines of employees. With rapid globalisation, the axe is never too far away. It is therefore critical for Singaporeans to understand their employment rights, be adequately prepared and armed themselves with the know how to find another job to protect themselves from the sudden loss of income.

The Axe Is Never Too Far Away, Are You Adequately Prepared?
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Recent Retrenchment In Singapore

While the majority of Singaporeans were enjoying their well deserved year end break, about 500 staff at HGST Singapore, a Western Digital company received grim news on 27 December that they will be retrenched on the very same day. The company was following plans to enhance its competitiveness and reduce its workforce.

For those who have not been retrenched before, have you prepared yourself for such a career-changing event? In some best case scenarios, you can get another job on short notice, fall back on another skill as a freelancer or have saved enough money to pursue your passion. But for those who have commitments to uphold, what should you prepare for in advance?

Be Prepared For Retrenchment

If you are still a staunch believer that performing well at your job will save you from future retrenchment, you better think again. Gone are the days when companies place their employees’ livelihood as a key consideration for business decisions.

To improve performance or productivity, companies periodically review and adjust their business plans and processes. The emergence of new capital, changes in ownership, or changing economic circumstances can often lead to reorganisation and restructuring within a company. It is not uncommon for job losses to result, and in some cases it may be the only way for a company to move forward and thrive.

Mid-life is the most vulnerable time to be selected for redeployment or retrenchment. Do your planning early so you won’t be angry or upset when this happens to you.

1.   Work Your Finances

It is a good practise to conduct regular reviews of your monthly income and expenses. Evaluate and cut away unnecessary recurring costs in your lifestyle and make an effort to save regularly for rainy days.

Divide your monthly recurring expenses by your savings to work how long you can last without a job. Your savings should last at least 6 months for a comfortable job search.

2.   Understand your employment and contractual rights

Currently under the Employment Act, an employee who has been employed in a company for at least three years can request for retrenchment benefits if he/she is retrenched.

However, as the law does not stipulate the quantum to be paid, the amount is subject to negotiation between the employee and employer and depends on the company’s financial position.

This means that getting your retrenchment benefits is not a given especially if you are an executive or manager, and the amount given may not be what you expected.

Check your contract to see if retrenchment and corresponding benefits are stated clearly, if not then you may have to prepare yourself to negotiate for your retrenchment benefits should the situation arise,

3.   Look for workplace protection

If you are a union member, the union can assist you in negotiations for retrenchment benefits, breach of employment contracts, appeals against wrongful dismissal, and victimization, on top of assisting in your job search.

For the retrenched HGST workers, their union UWEEI has been negotiating with HGST to ensure fair compensation and treatment for them. Union officials were present at the company during the retrenchment exercise to provide counseling for affected employees.

UWEEI and the Employment and Employability Institute (e2i) have also organised a targeted job fair on 16 January 2014 with 500 job vacancies available for the retrenched workers to look for a new job, and also arranged for these workers to attend employability camps and executive workshops to prepare them for the job fair.

If you are terminated for some other reason than retrenchment, here are some tips on how to make the best out of this situation.

4.   Consistently Enhance Your Employability

Keep a close lookout on the most sought after skills in your area of work or industry and read books or attend courses to update your knowledge in these fields.

Continuous training and re-education show potential employers that you take your professional life seriously and give you an edge over the average worker in the job market.

5. Learn & Develop Your 2nd Skill

Take every opportunity to learn and develop your 2nd skill (during non-working hours) while you are employed. This additional skill or hobby can double up as a source of income when you are faced with unforeseen circumstances such as retrenchment and unemployment.

In Singapore, there are a number of full time professionals who enjoy passive income from their personal 2nd skills or hobbies which ranges from cake-baking, fish-rearing, recreational singing to managing online blogs and blog shops.

At least, you will be able to last longer without a job and have the option of going freelance or set up your own business.

To be adequately prepared or react only when the axe drops, you have a choice, what say you?

2 Comments on this Post

  1. What protection are you talking about? Unionised workers also get retrenched in the end.

  2. If you put your heart into performing your job well, why will you get retrenched? Just focus on being one of the top performers in your company.


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