Johannesburg - Mirroring the economic strain that many South African households are experiencing, many local businesses too are feeling the economic ‘heat’ as owners grapple to maintain turnover and profitability. During this time, many business owners consider, or even implement retrenchments, but there are a number of factors to consider before taking such drastic action.
This is according to Kgomotso Ramoenyane, executive GM of Human Resources at Business Partners, who says that during financially challenging periods, human resources is one of the departments that often receives the most attention.
Ramoenyane points to June 2016 quarterly employment statistics, released by Statistics SA ealier this year, which reported a decrease of 67 000 employees – when compared to March 2016. “Times are extremely tough and quarterly employment losses were observed in all industries apart from electricity and construction industries.
“When faced with shrinking revenue figures, small business owners should firstly review cash flow management and explore ways in which to optimise it. All options, such as improving a business’ service offering through implementation of innovative ideas, refining and improving customer service to retain customers, and cutting overhead expenses, should be thoroughly researched before considering the retrenchment option.”
Ramoenyane also advises businesses to communicate with their staff, and come clean when the business is not doing well financially. In addition, she says, it should discuss options before a retrenchment process is embarked upon, and consider all option – including trimming working hours.
Ramoenyane also says companies should freeze current recruitment, and consult with staff members in person, which should be followed by complete, accurate written information detailing the reasons, the process to follow, and how many staff members will be affected.
“Business owners must ensure they support all staff during the entire retrenchment process, both the staff being retrenched, as well as those remaining. This includes allowing staff time off to attend job interviews, assistance with CV writing and references, and the general care of staff morale in the office throughout the process.”
Ramoenyane adds everything should be documented. “One of the biggest mistakes employers make is to handle retrenchments without accurately documenting communication. All communication involving retrenchment of staff must be well documented at all times.”
IOL
Adapted from a press release.