“Retrenchment” and “socially responsible” seem to be the ultimate contradiction in terms! How can putting productive and competent people on the street be socially responsible?


Retrenchemnt nightmare

Retrenchment has awful consequences. For a family, it’s a terrible calamity to suddenly be deprived of income. For the individual who is retrenched, they are typically racked by:

·       Shame and guilt for having “allowed” this to happen

·       Great anger at others, as well as at themselves

·       Loss of confidence

·       Loss of trust in the retrenching organization


Industrial Relations practices require that organisations ameliorate the effects of their retrenchments. This usually translates into giving the retrenched person what they consider to be a “fair” retrenchment package and sometimes even providing counselling at the time of giving the retrenchment notice. This is however inevitably experienced by the retrenched person as a superficial band-aid that misses the mark!


How then can an organisation that strives to be a good corporate citizen retrench people in a way that minimises these distressing impacts?


The focus of a best practice socially responsible retrenchment strategy lies in what happens after the retrenchment: how is the retrenched person assisted to cope with the effects of the retrenchment? This requires helping the retrenched person address 5 specific areas:

  1. Build inner strength and resourcefulness to cope with the tough times they are experiencing, including dealing with their anger and hurt
  2. Understand the changes and decisions needed to cope with their changed financial circumstances, including deciding what to do with the retrenchment package
  3. Reappraise their life aspirations, career goals and income generating possibilities
  4. Decide and take actions to re-enter formal employment, or
  5. Decide and take actions to start or buy a small business


The outcome of a socially responsible retrenchment strategy is that the retrenched staff are able to get through their dark night of adversity quicker and even be better off than they were before.  


That’s the great irony of experiencing really tough times like retrenchment. Although no-one actively seeks out adversity, it is necessary for our status–quo to be disrupted for personal growth and development to take place. This doesn’t happen during good times. Resilience helps us reconcile, heal, make changes and ultimately thrive after adversity.


A retrenching organisation can thus be a powerful force for good by assisting retrenched staff become more resilient and replace their income stream. In this way retrenchment can be the stimulus for major change that results in personal growth leading to higher levels of self actualisation.


Wouldn’t it be wonderful if organisations adopted a socially responsible retrenchment strategy that resulted in retrenched people saying that whilst they wouldn’t wish the experience on anyone, it was the best possible thing that could have happened to them?