* ISSUES AND CHALLENGES IN REDUNDANCY, RETRENCHMENT, IT AND CONTRACTUAL LABOUR. * BY PHILIP GETANDA
* ISSUES & CHALLENGES IN:
* INFORMATION TECHNOLOGY
* CONTRACTUAL LABOUR
* Redundancy refers to a surplus of labour, which occurs where the number of employees required to carry out work of a particular kind has ceased or diminished, or is expected to be reduced either permanently or temporarily due to a recession and the business needs fewer employees because it is operating with a reduced output. * CAUSES OF REDUNDANCY:
Redundancy usually results when a firm is faced with the need to: * Reduce Costs.
* Improve Profitability.
* Improve Efficiency.
* Rationalize operations.
* Adopt different operating systems.
* Respond to macroeconomic forces when a company determines that its workers can no longer profitably produce products at current market prices. * Undertake a reorganization of the organization.
* REDUNDANCY INDICATORS:
* Poor performance in an industry where performance reports are reliable * When there is a mismatch between organizational needs and the skills of its employees * When there are employees in sections or departments that have been marked for closure. * DANGERS OF REDUNDNACY:
* Departure of skilled people who go to your competitors or set up businesses to compete with yours. * When your business improves and you require skilled and experienced people it may take you years to train again. * In retaining younger and cheaper employees you lose experienced people you may need to help during a difficult business situation. * Even survivors cannot be sure that further redundancy will not come again so it is difficult to restore confidence. * Relationship with customers, suppliers and the public suffer due to departure of individuals with whom they deal with and often they change to other companies who are your competitors. * AVOIDING REDUNDANCY:
* Planning and monitoring employment carefully.
* Freezing recruitment to allow natural wastage through resignation, retirements and deaths. * Out sourcing to avoid increasing numbers or reduce them gradually without much pain * DEALING WITH REDUNDANCY:
* Reorganization of the business practices and processes. * Retraining and coaching of staff to meet new organizational needs. * Career counseling.
* Job rotation and enrichment.
* Job sharing.
* When all options have been explored then the next option will be…..Retrenchment of the surplus employees. * RETRENCHMENT
Retrenchment is the laying off of a given number of employees by an organization when it has the objective of cutting costs or taking advantage of technological advances which require fewer people to carry out a given job. * OVERVIEW
* According to Michael Armstrong (2003), the employment relationship may be ended voluntarily by someone moving elsewhere or it may finish at the end of a career by retirement. Increasingly, however, people are having to go involuntarily as organizations are becoming mean as well as lean. * Retrenchments began as the strategy of sickly corporations shedding workers in the face of weak demand, but soon, strong firms looking to boost shareholder value even further adopted the policy. Retrenchment programs have since then been increasingly used as human resources strategies to respond to changes in the business environment. * FACTORS TO CONSIDER IN RETRENCHMENT
* Which jobs are to be cut?
* How are the employees to be selected for retrenchment?
* How much advance notice will be given?
* What degree of consultation with employees or their representatives should take place? * What rate of severance payment will be made?
* Will employees be paid in lieu of notice?
* What should be done to...