THE writer of the letter 'DBS should redeploy staff to POSB' (my paper, Dec 1) has raised a valid concern, given DBS' announcement that it will retrench 450 employees in Singapore just a fortnight ago.

Historically, however, hiring and retrenching staff at the same time is not unusual in many sectors of the financial industry.

This is due to cost savings and, to a lesser extent, structural mismatch.

During a recession, an employer needs to cut cost, so it is natural to retrench older staff members who enjoy higher salaries and benefits - like more annual leave and medical allowances.

Also, during this time, there are many job applicants. Employers therefore get to hire at a bargain - they can select the best candidates at lower starting salaries, and with fewer perks.

Thus, it is more economical to recruit new employees than to redeploy existing workers. Moreover, staff members may not be suitable for redeployment due to amismatch of qualification and experience required in the new job.

This is known as structural retrenchment.

In such instances, an employer cannot be blamed for hiring new workers instead of redeploying employees from other areas.

In the end, companies need to answer to stakeholders and shareholders.

Mr Chin Kee Thou

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