Restructuring 'top reason' for letting employees go
SINGAPORE'S recent economic-restructuring efforts appear to be the main driver of companies letting go of employees here, going by the results of a global severance study.
The top reason for letting go of employees, according to 76 per cent of Singaporean survey respondents, was restructuring of organisations. This was revealed by United States-based talent- and career-management workforce-solutions provider Right Management yesterday.
Some 57 per cent of the respondents pinpointed reduction in workforce as another reason for activating severance, while 56 per cent cited the relocation of businesses. And these reasons are signs of the ongoing shift in Singapore's economy, where there is a "push for higher productivity and less reliance on cheap labour", said Mr Frank Ribuot, Right Management's senior vice-president of Asia Pacific and global talent management.
Still, he pointed out the fact that severance exercises here have been "more driven by business needs to restructure, rather than to reduce their workforce for the sake of reducing their numbers, is in itself a good sign".
"The economy in Singapore is clearly holding up better than other parts of the world," he said.
Ms Femke Hellemons, country manager of human-resource firm Adecco Singapore, told MyPaper that to remain competitive, Singapore needs to increase its labour productivity and attract the "right talent to meet (economic) demands", especially in areas such as engineering, biotechnology, medical services, and oil and gas.
The survey of more than 1,800 senior executives and HR professionals from 19 countries also found that companies in Singapore observe healthy severance practices - at least 77 per cent of the respondents have a formal, written severance or termination-benefits policy in place.
The severance payout for a top executive here is 3.95 weeks per year of service, compared to the global average of 3.48 weeks.
Separately, the National Trades Union Congress (NTUC) said that about 200 workers may be retrenched in the first quarter of this year. Last year, a total of 2,898 workers from the unionised sector were displaced from their jobs. This is 76 per cent higher than in 2012, where 1,647 workers were laid off.
Mr Ribuot told MyPaper that employers here should provide outplacement support for employees they are letting go, instead of offering money.
"Most separated employees who select a monetary option don't realise how long it takes to land a job, or what new skills they may need to acquire."