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4 minute read

Responsible Retrenchment: How to Restructure with Compassion

Retrenchment is a difficult and stressful process for both management and employees. Here’s how your operation can downsize with the most amount of compassion and respect for those affected.

Businesses must consider the need to downsize should poor economic conditions or market conditions catch up to their finances. While the process is never pleasant for management, handling retrenchments with compassion is possible.

If your business is considering retrenchments in the near future, developing a strategy loaded with empathy for employees ensures those affected get back on their feet as soon as possible. Here, we look at the best ways to manage employee termination with the utmost understanding and respect.

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Techniques for responsible employee retrenchment

As you embark on retrenchments, there are several effective techniques you can employ to ensure the least stress and hassle for your staff. Build these strategies into your plan to show your team the consideration they deserve.

1. Communicate openly

If redundancies are the only option your business has, communicate honestly with those affected. While stress and injured feelings are often unavoidable, conveying the need for organisational changes face-to-face can help employees understand your decision.

There’s nothing worse than workers feeling left in the dark. Rather than giving people false hope, communicating clearly is critical to responsible retrenchment. This way, employees can start looking for a new job or securing their finances.

2. Provide substantial notice

Employee terminations should never happen by surprise. Your business must give its team advanced notice of potential retrenchments, so individuals aren’t blindsided by a job loss. At a minimum, this notice should correspond to the terms of employment termination in employee contracts.

However, if you’re looking to retrench team members responsibly, providing notice of retrenchment above and beyond minimum expectations is the ideal way to showcase empathy. This way, your former staff can prepare their resumes and begin their job search.

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3. Support retrenched staff

Your relationship with employees doesn’t have to cease once a retrenchment notice has been served. Instead, you can provide ongoing support for terminated employees to ensure they can secure the perfect role without delay.

For example, your business could provide helpful recruitment services, such as sessions with a career counsellor or a professional resume writer. Meanwhile, you can give each terminated team member a stellar reference, ensuring their next employer views them favourably.

4. Follow local regulations

Singaporean businesses must follow a range of retrenchment practices when terminating team members. For example, companies retrenching at least ten employees must notify the Ministry of Manpower about the retrenchment exercise.

If you’re unsure how to proceed, the Tripartite Alliance for Fair & Progressive Employment Practices (TAFEP) and the Ministry of Manpower provide businesses with helpful resources. These ensure you conduct yourself fairly and responsibly when carrying out retrenchments.

How to respond to common questions from retrenched employees

After creating a detailed retrenchment plan that ensures you treat your team members respectfully, it’s wise to research common questions terminated employees are likely to ask. This way, you can respond effectively to ensure you help them manage the situation.

1. How was the decision made?

Most employees aren’t just going to receive their retrenchment notification and move on – people usually want to know why their specific role has been made redundant. Answer this question by explaining what criteria were used to decide and how the management attempted to find viable alternative arrangements but was unsuccessful.

2. What happens to my benefits?

If your retrenched team members receive benefits through your business, they’ll want to know what happens now that they no longer work for the company. Plan for this question by providing transparent information on how long terminated employees can access certain entitlements and whether any can be replaced by other solutions.

3. What support can I access?

Don’t leave your retrenched staff guessing whether assistance is being made available through the business. Inform employees about what services you’ll be providing and how they can access them. This way, they can seek assistance during this challenging time and prepare themselves for an upcoming job search.

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