Retrenchment is like naked mud wrestling. While you can’t avoid humiliating exposure or eating dirt, you can at least win the match. It’s about making the best of a bad situation. Retrenchment is going to upset your bank account and lifestyle no matter what; but with the right reactions, you can recover with speed and grace. I hope you’ll never have to use the contents of this article. But just in case it happens, read and be prepared:
Before we get started, two quick notes on what you shouldn’t do:
First, don’t plead or make a scene. The HR managers you’re talking to are a meat shield for the real bosses. They haven’t the authority to re-hire you, even if they feel sorry. If you stay calm and don’t make a scene, it’ll be easier to extract every possible benefit from them.
Second, don’t ask why you’re being retrenched. The managers have a script that they’re trained to rehearse. You may as well talk to a sock puppet, or SMRT’s public relations. If they start telling you the reason, cut them short and skip to what benefits you’ll be getting. It sounds adversarial, but it will keep you calm and focused.
1. Focus on Tying Up Loose Ends
If you’ve just be retrenched, your work motivation is probably comparable to an arthritic turtle. But as bad as you feel, try to concentrate on tidying up your work. Above all, look out for colleagues: inform Bob that you won’t be doing the budget report, and Alice that she’ll be babysitting clients from now on.
Don’t burn any bridges. You’ll be looking for another job soon, and your co-workers are probably in related fields. Likewise, you’ll need those glowing job references and referrals. Rather than complaining and venting, make your bosses and colleagues feel like they owe you. And if you work with clients, you can drop so less than subtle hints; you never know when one of them may offer you a job.
2. Extract Every Possible Benefit
If your company has free health screenings or dental plans, now’s the time to use them. Some companies also give employees subsidised rates on things like chalets and products. Don’t spend money that you’ll need, but you can get those things for friends or relatives. If someone is willing to fork out the cash, go ahead and book that chalet in your name, or order a crate of the company’s best.
If your boss says she’ll give you referrals, get them from her now; don’t wait till after you’ve left.
Also, I talk about finding job benefits all the time; you can follow MoneySmart on Facebook for updates on those topics.
3. Get What You’re Owed
Iron out your time sheet with HR. Make sure you collect on that overtime pay, as well as any outstanding transport claims. Don’t forget the little things like seasonal parking; some companies have policies that will compensate you. Apart from money, don’t forget the work samples you have a right to. Gather up the news clippings or client’s commendation letters; you’ll need them in the interviews to come.
If you work a sales job, make a final check that our commission is in order. Get any questions answered in writing, while you’re still a presence in the office.
4. Immediately Prioritize and Cut Back
From the very day you’re informed, develop a priority list. Isolate the 5 most important things to pay off, and sever the rest.
That could mean cancelling a cable subscription right away, or immediately putting the car up on sale. Speed is absolutely essential here; the faster you cut back, the longer you can go without a job. A typical example of a top 5 would be:
- Housing Loans
- Health Insurance
- Outstanding Credit Car Debt
- Internet Access (You can use public access)
Priorities are either debts (which grown if they’re not addressed), or the things you need to keep doing your job. If your in sales, for example, your car might be a priority. Not so if you’re a chef or web developer.
5. Identify Your Crisis Point on a Calendar
Do not rush out and grab the first job you find. Muscling aside a 17 year old so you can serve pizza is just not cool. Instead, plan a budget and determine how much time you have to job hunt. The “crisis point” should be where your existing savings dip below 50%. For example:
I have $4000 in savings, and my crisis point is $2000.
Lucky my wife makes $1800 a month, and our overheads are just $2000 a month. So the loss to my savings are $200 ($2000 – $1800 = $200) a month. I will hit my crisis point in 10 months. Until then, I don’t have to plan any escape routes from knocking over a grocery store.
Don’t try to cheat and extend the crisis point by taking out loans, or raiding your investments. Remember, any job you take in a crisis is meant to be short term anyway.
Retrenchment is hard on anyone, employers included. But don’t let it be an opportunity for doubt or uncertainty; the moment it happens, execute these steps and move on. And never assume that retrenchment reflects on your skills or worth, even if a consultant or auditor was to blame. Most of the time, retrenchment is due to simple market forces or corporate mismanagement.
Have you survived retrenchment? Comment and tell us how!