Retrenchment should be the last resort: SBF

The Singapore Business Federation has issued an advisory to all its members, urging them to be responsible in their management of manpower costs. The advisory, which went out late the previous week, states that retrenchment should always be the last resort, and should be conducted in a "responsible and sensitive manner".

The federation, which has over 27,000 members—all companies in Singapore with a minimum share capital of S$500,000, or the top 20 percent of businesses in Singapore—also called on companies to first implement alternatives such as retraining and redeployment, flexible work schedules, and wage adjustments, and to tap on sources of support such as government or business chamber assistance schemes.

SBF Chairman Lim Ming Yan said: “We encourage companies to take a longer-term view of their manpower needs so as to retain and upgrade important capabilities, and to transform their businesses for the eventual recovery. Companies should view retrenchments as a last resort, only after having exhausted all other cost-saving options."

The SBF advisory comes as unemployment in the city-state hit a record quarterly high and is projected to continue rising for at least several months to come. Ministry of Manpower statistics indicate that nearly 150,000 jobs were lost in the first half of 2020, with retrenchments doubling from March to June. While the majority of companies have apparently followed due process and attempted to implement recommendations for saving jobs, a minority have not, and at least one company, Eagle Services Asia, was hauled up by unions for carrying out abrupt retrenchments that employees described as "unfair".

Lim said: "If companies need to retrench, they should have in place fair criteria that protect their Singaporean core and yet retain talent necessary for growth. In retrenchment, just as for hiring, companies should be fair and responsible and work closely with the unions and government agencies to support the employees in seeking new employment opportunities.”