Economic turmoil exacerbated by two years of pandemic and its attendant lockdowns has seen the United Nations Department of Economic and Social Affairs, note that after a strong recovery in 2021, global growth momentum is losing steam, writes Ross Mengel, Outplacement & Career Transition Consultant in alliance with Signium Africa.

The World Economic Situation and Prospects (WESP) 2022 warns that global economic recovery hinges on a delicate balance amid new waves of COVID-19 infections, persistent labour market challenges, lingering supply-chain constraints, rising inflationary pressures and the ongoing war in Ukraine.

From a South African economic perspective, the last few years have been grueling: VAT has increased, GDP hovers around the 1% mark, interest rates are up and retrenchments have picked up across several industries including mining, construction, engineering, manufacturing, banking and finance, as well as state-owned enterprises such as Eskom, SAA and SABC.

The pace of job creation has been wholly inadequate to offset employment losses, and many companies have had to reduce employee numbers to shrink costs, leading to extremely challenging and stressful undertaking of section 189 processes and retrenchment.

The benefits of outplacement to the organisation

Outplacement, also known as career transition management or retrenchment support, helps an organisation plan its staffing levels and continue to operate efficiently and effectively, to the benefit of all stakeholders involved.

Signium’s Outplacement and Career Transition Services provide tailor-made support and training for the staff of organisations that have reached a “bend in the road” and are downsizing, restructuring or retrenching.

For the organisation:

• A well-managed outplacement programme preserves focus, promotes trust and sends an important message to all stakeholders about their level of corporate social responsibility
• Management is able to concentrate on the business, instead of being involved in what can become a drawn-out retrenchment process
• Knowing that they are providing support to those affected helps relieve management of the emotional stress associated with retrenchment
• The treatment of departing colleagues is carefully monitored by those remaining and can contribute to the retention of key employees.
• The risk of legal ramifications is minimised, through the right treatment of terminated employees.
• A supportive approach to retrenchment is good for the future reputation of the company and its employer value proposition, which is beneficial in the attraction of new talent
• Support for outgoing employees helps maintain good relationships with those who may become important industry contacts, competitors, or even potential alliance partners in the future
• Outplacement programmes are recognised as best practice in organisations that believe in sustainable HR management

The benefits of outplacement to the individual

When managed correctly, outplacement helps employees whose positions have been made redundant identify opportunities for new beginnings in roles more closely aligned to their personal, financial and career objectives.

More specifically:

• The retrenched employee receives professional assistance at a time when they may be ill-equipped or unprepared for a change in their career
• Outplacement programmes reinforce their strengths whilst maintaining a positive and proactive outlook, at a typically vulnerable time
• Individuals are encouraged to take stock of their qualifications and skills and practice marketing themselves
• The skills and support obtained through these programmes lead to a more efficient and effective job search campaign
• Improved success rate in identifying and being shortlisted for target roles
• Support during the interview, job offer and negotiation process

Taking the high road

Working with affected staff members to give them the most valuable support in re-establishing themselves is not yet best practice, but it is time that companies consider more dynamic processes to ensure that the “bend in the road” is a mild one, and not one that requires sudden braking.

This usually results in employees feeling more positive towards the company and helps foster a reputation for being a responsible corporate citizen and employer of choice, which makes attracting the best performers far easier when the economy shifts up a gear again.

Signium Africa’s Career Transition services cater not only for employees who have been affected by retrenchment, but also those who the organisation wishes to retain and who seek guidance from both a personal and career development perspective. More to follow on this approach to retention in our next article.

Ross Mengel
Senior Consultant in alliance with Signium Africa.