For most people today it may be impossible to avoid retrenchment entirely. Your choice of career does not do it, nor does your education level. Even Raymond Ackerman was retrenched back in the 1960s, but he went on to build a company bigger than the one that got rid of him. If you’re fortunate enough to never be hit with the retrenchment axe, chances are you will have to wield the axe yourself or have to offer advice or motivation for former staff members, family or friends who have been struck down, sometimes in the prime of their careers.
As a child in a white, working-class neighbourhood, the writer of this article was repeatedly told by adult men, “Learn a trade, my boy. That way you’ll always have a job.”
It didn’t work out that way. Many of those trades (instrument makers, hot metal type setters, litho strippers and many others) no longer exist. Many of the companies that once employed squads of artisans also no longer exist. The only solution to retrenchment is not to try to avoid it, but be ready to meet it when the day comes.
Naturally, we all sympathise with the person being retrenched. Perhaps at the back of our minds is the thought, “There but for the grace of God go I.” Those conducting the retrenchment at least still have their jobs, but it is not a joyous occasion for them either.
Being retrenched is not the same as being fired for poor performance. Although businesses have been known to use retrenchment to get rid of poor staff members, it is almost always brought about by the company’s need to cut costs.
For the company, retrenchment is always a procedural nightmare. In the case of a small or medium-sized business, while management is doing it to cut costs, one wrong step can be very expensive. The CCMA commissioners are rarely interested in the rights and wrongs of the matter, only in what procedure was followed.
Sitting in a meeting at which people are being told of their impending retrenchment is a depressing experience for everyone. The initial response is one of shock.
That the retrenched people are going to lose their income is devastating, but equally brutal is the realisation that the company is saying that all the other people are needed but you are not. Some try to fight it, appealing to the CCMA, usually without success, while others accept and try to move on.
Laurence Stybel and Maryanne Peabody of Boston, USA, have identified three traps that higher-level retrenchees fall into. The first is lost identity.
This applies to people who are so identified with their jobs and companies that they cannot imagine going on without them. The second is lost family. They see their co-workers as close friends, even family members. Losing them is the biggest shock that retrenchment brings.
And, finally, there is lost ego. Executives especially fall into the latter trap. For them, the shock that the company does not want them is most intense. They thought they were an indispensable part of the company machinery.
Even highly skilled people are at risk. An outstanding woman was hired by a media body as an internet marketer and let go a month after being appointed. The company decided that her knowledge of current affairs, right down to knowing the names of all the MECs in the province, was not good enough.
Middle-aged, white managers are fair game. Under pressure from government, companies search for younger, darker and, increasingly, female replacements. Their performance may have been good, but new management sees them as part of the old regime and, because of the prescriptions of affirmative action, they have no latitude for movement in the corporate sphere. A man who has recently received his retrenchment notice is in his second marriage and has two children at school. He told the writer that he knows he will not be able to replace his present job. So far, he has no idea what he will do.
The effect on families is devastating. According to a leading firm of divorce lawyers, finance is one of the 10 most common reasons for divorce. Stats SA calculates that 24% of all people getting divorced are not economically active.
At the lower levels of employment, ego does not come into the matter. A single woman in early middle age, the mother of three children, who had searched for a job for years is typical. Implications for her family were vast. For her the issue was survival as a family, not ego. The initial panic soon settled into deep depression. She had the presence of mind to return to the company though and beg for an alternative. They were able to give her three day’s work a week, but some months later even that disappeared. Unable to find other work, she has become reliant on welfare organisations.
According to the law governing this sort of thing, the procedure that has to be followed includes notification, consultation, and reviewing possible retrenchee suggestions before a final decision is made. But the decision that retrenchments are needed has been made before all of this takes place. In reality, the process is simply a cruel egg dance that just prolongs the pain.
The first step many retrenched people take is to look for the pay-out from the Unemployment Insurance Fund (UIF). After waiting for hours in a long queue of others with the same problem, many, at more than one Department of Labour office, have been told that the computer was down and they should come back on another day.
An acquaintance who chose to stay has related to the writer that he was assisted shortly after the others had dispersed. As soon as the people needing help were gone the computer miraculously came back on line. Subsequently, it was confirmed by three other people (who were all waiting in queues in other areas) that this is not unusual. With one of them it happened twice on different days. If you are in a UIF queue and they give you the story that the system is down, tell them politely that you will wait till it comes back—and hang in there.
Other problems unrelated to government machinery can affect UIF payments. A driver who was earning R6 000 a month informed his insurance company the moment he was retrenched and asked them to halt deductions until he was re-employed, only to find that his first payment of R1 600 was seized by the insurance company without any of it reaching him.
The next step is usually to search for a job. In today’s market this is a daunting task. For managers it is very difficult, for lower-level workers it can be near to impossible.
Very often, how people cope with retrenchment depends on what they did before being retrenched, not what they are doing at the time. Two mid-level employees that the writer knows well took out retrenchment insurance as soon as they saw that the company they were working for was in trouble. The result was an income for some time in addition to their retrenchment packages, making the transition to something new much easier.
Having good networks can be a great help, and this applies to people on every level. The more friends you have in business, the more people will be looking out for an opportunity for you.
However, you cannot leave building a network until the day you are retrenched. You need to be building friendships long before you want to ask them to help. Keeping your network of professional acquaintances intact takes work. Start working on it before you need it for retrenchment. Besides, for personal and business growth you need strong networks, so you should never neglect the power of people.
Earlier in this article I covered the disappearance of the trades many relied on and the corporate jobs many called home. Today, jobs that once seemed more secure than having your own business, no longer look as good a bet. The advantage the entrepreneur has when things go bad, is that he or she is accustomed to generating the family income. When things go bad they are far readier to adjust than is the case of the corporate employee.
Very often, how people cope with retrenchment depends on what they did before being retrenched
When you’ve been retrenched you should also contact your bank and all your creditors of companies you have accounts with. Be open with them about what has happened, be positive about how you are going to find replacement income in the next few months and there is a good chance they might offer you either a payment holiday or some period of growth. One security company, for instance, has been willing to offers retrenched clients up to six months grace to assist them to get back on their feet. Especially if you’ve proven yourself to be a loyal customer, companies are eager to retain your business, so you might be surprised about what they might be willing to offer you.
Faced with the problem of what to do, people with a spare bedroom sometimes use it as a bed and breakfast. Men who are used to better things find themselves driving Uber cabs. Occasionally, someone is able to turn a beloved hobby into a money spinner. Part time dress-making, pickle bottling, furniture or hammock making, even brewing beer.
Sadly, drinking beer is not a skill which can earn you a living (unless you’re extremely lucky), but these other skills that you might have developed over the years could prove to be a life-saver for you when times are tough. All you need is some insight or inspiration in terms of how to monetise them, as well as a willingness to engage positively with your clients and customers, at which skills have been developed, can become a life-saver.
Most of all though, as in life generally, attitude is everything. Faced with retrenchment, you have the choice of fight or flight. This is one occasion when fighting is pointless. Rather flee from the old job into something new, perhaps a completely new career, even a new life.
If you’ve been retrenched then the choice to go back is not yours. What you can choose it to be positive about going forward, taking those awkward first steps and then taking the leap of faith that you have what it takes to survive in the world. Why not? After all, millions of other people do around the world and, on the plus side, if you’re self-employed there is no way that you’ll be retrenched again!
Four ways to rebound from retrenchment
Like falling off a bike, when you lose your job you have to get back in the saddle and keep peddling. Here are some ideas for how to get back on the bike, as well as for how employers and business owners can play a role in helping without hiring.
Keep your hand in
Offer to consult for free to your previous employer or for other companies–for a short period of time. This allows you to build a new network and your confidence. Start a joint venture with a company or individuals who can’t afford your expertise but who need the value you can add as a partner. Startups working on mobile apps are a great place to start.
Pay if forward
Allocate some of your free time to mentor someone who can benefit from your expertise. This builds your confidence and can open your eyes to new opportunities. It also builds your cred in the eyes of business owners if you get glowing reviews as a mentor.
Remember your value
Don’t lock yourself into a low-paying gig in desperation. Keep searching for those opportunities to earn big money, because otherwise you will sink into a mire of debt… but you must balance this strategy with caution. You need to have some big-time irons in the fire but, at the same time, don’t turn down work while waiting for your ship to return to the harbour. Knuckle down and bring in whatever money you can just to keep food on the table and perhaps cover some of the rent or bond. Uber tourists around, flip burgers, do whatever it takes – but make sure you also have those big ticket items on the go, whether it’s for the next big thing or simply offering free consultancy services to a potentially huge future client.
Take time out
Even though it’s vital to get back in the saddle, sometimes you need a slight break to take stock of your situation emotionally as well as financially. Take a few days or a week. Think. Breathe. This time-out can be a huge help in ensuring your strategy is the right one for the right reasons.