PRIME Minister Lee Hsien Loong has warned of another wave of retrenchments here later this year, even as a Straits Times report said that Singapore's job losses doubled to 12,400 in the second quarter.
A sustainable recovery of Singapore's trade-dependent economy, which is heavily invested in electronic goods, has yet to see a strong turnaround - electronic exports in the second quarter fell 23 per cent compared with a 32 per cent decline in the first quarter, according to a Dow Jones report.
Unfortunately, this is not the first time Singapore's electronics and software industry sectors have been hit by the economy.
The dotcom meltdown offered human resource (HR) practitioners and management teams a prequel to managing wide-spread downsizing.
How should technology companies manage the thorny issue of layoffs? Key lessons from the dotcom crisis can offer answers on how best to implement a retrenchment initiative.
The dotcom crisis caught many HR practitioners and management teams completely off-guard and unprepared. The scene then was simply chaotic. When the avalanche of bad news came about, layoffs happened swiftly. Retrenched staff felt a strong resentment towards companies' management style - the loss of a job is like losing one's identity.
Studies have shown that the loss of self-esteem is shared by more than half of retrenched workers. They disliked the harsh delivery of the layoff announcement and quick 'disappearing acts' of removing employees from the office premises. Many felt they deserved more respect from companies since dismissal was not performance based.
This disgruntlement was a highly debated topic as it conflicted with corporate protocol.
Corporate policy dictates HR practitioners and management teams swiftly inform and remove retrenched staff from the office premises for two main reasons.
The first is to avoid an emotional reaction from retrenched staff that could negatively impact those left behind.
The second is to protect corporate intellectual property from destruction due to disgruntled staff members.
In the aftermath, a number of HR practitioners and managers supported the importance placed on company property, but shared concerns on the poor relationships developed from staff dismissal. Many felt that inviting dismissed staff back to the office for a proper farewell could soften the impact.
These and other key lessons learned from the dotcom crisis have uniquely positioned technology companies to better manage the current turbulent environment.
In the wake of today's retrenchments, technology companies are placing significant weight on employees' emotional and financial needs.
The majority of technology firms have voluntarily extended various goodwill offerings, a benefit not dictated by Singapore labour law or guidelines. The majority of goodwill offerings include a two-week salary payment for every year of service. Others offer a month's salary for every year of service, with some firms applying a cap, for example, at 10 years of service.
A common trend among the larger companies includes the funding and referral of retrenched staff to outplacement companies. Outplacement consultants provide one-on-one support to address the emotional and career needs in order to advance forward.
Interview techniques, how to write a good resume, how to chart the next career move and getting connected to recruitment firms are all part of the outplacement services. Early feedback from retrenched staff show signs of improvement from the dotcom era mistakes.
Managing layoffs that encompass mutual respect and support future career endeavours are best practices among HR practitioners.
As the Singapore economy improves, the technology industry is better positioned to tap an engaged and productive labour force mostly due to their retrenchment exercise's goodwill efforts bestowed on retrenched employees.
The writer is the director of IT&T (Information Technology & Telecommunications) Practice at Hudson
