If you found yourself unexpectedly retrenched, there are several ways to set yourself up for success while searching for a new job. Retrenchment can be especially frustrating, as it is caused by factors beyond your control. Being optimistic about your situation and taking steps to protect your mental and financial health can help you work through the stress of a sudden career change. In this article, we discuss what is retrenchment and how to cope with it.
What is retrenchment?
Retrenchment is a type of dismissal due to unavoidable economic circumstances. It's a process by which the company assesses its business needs in order to limit losses and increase profits, which leads to reducing its labour force. Employers often make this decision as a last resort. They will provide fair reasons and go through the proper channels.
How to cope with retrenchment in Singapore
If you've been retrenched, the first step is to manage your emotions and prepare a strategy to cope with being out of work. While being retrenched can feel isolating, many employees have gone through the process of recuperating from a sudden retrenchment and there are a lot of resources available that can help you take control of your situation.
Here are 10 steps to help you regain control of your life and bounce back when faced with retrenchment:
1. Confirm the details of the retrenchment
Whether your layoff was a complete surprise or you had heard rumours about the retrenchment around the workplace, discussing the exact details of the situation with your manager is the first step you have to take. Knowing the status of your employment can help you stay informed and plan ahead.
Ask your manager whether you have been fully retrenched or just furloughed until the economic condition improves. Ask your manager if there's a chance you can return to work after a period of time. This can help you determine whether to search for short-term work while waiting for your current employer to rehire you or start looking for a new job entirely. If your employer furloughed you, find out whether you can claim benefits such as health insurance. Your employer will usually inform you of your health insurance status and options, but you can also ask about it on your own.
2. Seek financial assistance
In Singapore, if you worked for a company for at least two years, you are eligible for employment benefits. If you have less than two years of service, your employer could grant you ex-gratia payment out of goodwill. An ex-gratia payment is a type of payment that an organisation makes to an employee for claims or damages without recognising any legal obligation.
The amount of retrenchment benefits you can claim varies depending on what is stipulated in the collective agreement or employment contract. If there's no provision, you may need to negotiate your retrenchment benefits with your employer. However, the prevailing norm is to pay a retrenchment benefit of around two weeks to one month salary per year of your service, depending on the financial position of the company and the industry in which it operates.
In unionised companies, in which the amount of retrenchment benefits is stipulated in the collective agreement, your retrenchment benefit is often equivalent to one month's pay for each year of your service.
Keep in mind, however, that if you are retrenched shortly after a salary reduction, the company often uses the salary before the cut to calculate the amount of compensation. Both you and your employer don't have to pay the Central Provident Fund (CPF) contributions for retrenchment benefits.
3. Practice self-care
It can be helpful to spend some time to process the state of your situation. Take the time to relax, plan ahead and deal with your emotions. Consider spending some time on relaxing activities, such as writing a diary entry or talking with your best friend. Relaxing allows you to process what happened and can help you prepare your mind for the next steps in your career.
It's also important to understand that your retrenchment may have resulted from reasons beyond your control. You can practice positive self-affirmations such as reminding yourself that the retrenchment was not your fault or was beyond your control. Remind yourself that you still have the qualities and skills you used to succeed at work and eventually will find another job.
4. Create a budget
Even if you already use a budget, you may need to make some adjustments to your finances while waiting for the company to release your financial benefits. Consider making a list of all your expenses and rank them in order of importance. You can also make a timeline to estimate how long your savings would last if you can't find a job immediately or if your unemployment benefits got delayed. To provide yourself with extra peace of mind, remove unnecessary expenses until you have the complete picture of how your retrenchment could influence your finances.
In order to determine how much exactly you'll need, start by listing unavoidable monthly payments and bills, such as your transportation costs, insurance premiums and telephone bill. If you have taken up a loan with your bank, request a deferment on your payments. Keep in mind, however, that when you request a deferment on your payments, the interest on your loan may continue to accrue. Some banks may allow you to pause the interest for a short period of time, usually three months, but this practice varies depending on the type of loan you are looking at.
It's also a good idea to check your bank statement for subscription plans you don't use all that frequently or may have long forgotten about. Cancel subscriptions that you are no longer using.
5. Review your goals
After being retrenched, take your newfound free time to reevaluate your current career path. Create a list of things that you loved most about your job and a list of things you would change at your next job if possible. A sudden change can help you evaluate your priorities from a new perspective and may even inspire you to pursue your passions or take your current career path to the next level.
6. Look for a mentor
After being retrenched, it's important to remember that many other employees are in the same situation as you.
Reach out to any experienced co-workers at your previous jobs who you admire or post on professional social networking sites asking for advice. Building a rapport with a mentor can help you get guidance that's relevant to your industry, while also having a safe place to vent and get emotional support.
7. Take part in retrenchment counselling
The primary purpose of retrenchment counselling is to help you cope with emotional reactions and start planning for your future.
In Singapore, Workforce Singapore (WSG) and e2i are popular government portals that many businesses employ to fill the gaps for retrenched employees. The service includes job matching, career guidance and skills-upgrading.
8. Consider changing industries
After you are retrenched, you might want to consider searching for resilient jobs in a field or industry that still has a high demand for workers, even during times of economic downturns. You can use Indeed to search for jobs that are in demand and compare their requirements with your current skill set. You may be surprised to find that many of your current skills are transferrable to other jobs, even if you haven't received any formal training within that industry.
9. Get references
Consider asking for letters of recommendation or references from your employer. You can use these references to help you gain employment opportunities in the future. It also shows your potential employer that you left your previous job on good terms with your former employer or manager.
10. Treat your job hunt like a job
Once you feel confident about the kind of jobs you want to pursue, devote several hours each day to job-searching activities. Treat your job hunt as if it was your full-time job. This can help you stay motivated to keep applying. However, take regular breaks as you would at your previous job. Also, talk with a colleague about things you found difficult each week and things you are proud of achieving.
You can develop momentum by making a regular schedule where you do a variety of activities, such as following up with past applications, looking for job advertisements and editing your resume. It may also be helpful to set an application goal each day, rewarding yourself in simple but meaningful ways when you've achieved your goal.