Released by: Manager@Work, The Edge
Date: 26 January 2009
The general outlook for 2009 forebodes an inevitable global financial crisis and economic slowdown. Increasing cases of shrinking assets, declining stocks and desperate business measures including lay-offs continue to beset the already ailing state of the economy. Even an economic superpower such as the United States of America has painfully experienced the collapse of several of its so-called
long established banking and financial institutions, amongst which were Freddie Max, Fannie Mae, Lehman Brothers and Bear Stearns. Despite the various Government stimulus packages proposed, economies around the world continue to slide amid growing fears of a full-blown recession
Proactive Initiatives
The UK government has taken the initiative to create a ₤100 million fund to help lawyers, bankers and business executives who are affected by the recent economic downturn, through a special collaboration with learning institutions to provide retraining, career counselling, outreach programmes and practical courses.
Back home, Malaysia has stepped up efforts to cushion the blow for redundant employees. Like the UK government's initiative, the Malaysian government has created a RM170 million training fund, of which RM100 million will be disbursed to retrenched workers for retraining purposes, whilst the remainder will go towards training graduates.
Alignment of Skills and Industry Needs
The surge of nation-wide retraining and redevelopment programmes emerging in many countries shows that Governments around the world are serious about tackling the thorny issue of retrenchment and its repercussions.
Why retrain? Can veterans with decades of work experience benefit from further training? Shouldn't companies save their money for truly urgent, mission-critical matters rather than providing the "luxury" of training? Retraining gives the employee an opportunity to pick up new knowledge, skills and competencies that will make them a more valuable asset. Boosting morale and confidence in a
fledgling economy is paramount. According to Rita Bailey, ex-director of Southwest Airlines training facility, "it's during the hard times that you need to invest in people the most." Southwest Airlines increased their budget post-9/11 in a move that was deemed to keep their employees feeling inspired and positive. Along with some cost cutting measures and targeted training focus, they managed to
maintain productivity, competitiveness and sustainable profits.
Here are some insights on how major stakeholders can work together to alleviate the economic and social effects of retrenchment.
Achieving Synergy among Stakeholders for Employee Re-Skilling & Re-invention through Re-training, Re-development and Re-learning
To achieve synergy between all parties, employees must be simultaneously supported by the Government, learning institutions and their companies or industries.
Management Insight #1: Focus and Initiatives by the Government/The Steward
The country's Government must focus and take the lead with the support of industry in combating the real effects of this economic downturn, and have the consensus political will to see it through. Fiscal and monetary initiatives with appropriate measures must be put in place to protect the welfare of the employees, while uncompromising enforcement is crucial to avoid any unethical behaviour by
individuals and organisations that are scaling down their workforce and their operations.
Make funding accessible to those who truly need it to survive by means of the mass media. Set up clear guidelines on the usage of the retraining funds and disburse it transparently. Prosecute decision makers who abuse their power and end-users who misappropriate the fund. Where feasible, adopt a dollar-for-dollar system in which every dollar spent by companies is matched by the Government to
retrain and re-skill their employees.
Management Insight #2: Paradigm Shift of Learning Institutions/The Enablers
The triple helix collaboration of Government, industry, educational and training institutions must work closely to identify the industries that are hardest hit and their training requirements. Design courses that are aligned with those needs. Universities should not be dogmatic as to limit themselves to the traditional courses that they conventionally offer, and instead be more flexible and design
courses that meet the current urgent needs of business and society. Work based learning, accreditation and credentialisation which can enable the workforce to be quickly re-skilled and to obtain new competencies in the workplace must be given due recognition as an innovative way of re-inventing and revaluing one's job in the workplace. Roll out an aggressive nationwide retraining programme at
affordable cost or flexible repayment schemes, or even provide grants or scholarships based on merits and needs. The types of courses should include a wide spectrum of relevant programmes, imparting industry specific skills as
well as soft skills including communications, management and leadership. There is no better time to do this than now, that is, during an economic crisis.
Management Insight #3: Responsibilities of the Employers/The Companies
Companies and employers must be far sighted. They should not reduce their annual budget for training. Take Viacom as an example. Despite some rationalisation of staff during their merger with CBS, their training budget was maintained. Never discount staff loyalty. Bad times and good times come hand in hand, don't abandon your people at the first sign of trouble. For staff that have been retained,
encourage push them to strive for excellence, broaden their scope and responsibilities. They need to add value to themselves and the organisation by upgrading their skills and competency.
Government agencies such as Human Resource Development Corporation (PSMB) have a scheme where selected training and postgraduate educational courses are offered a 100% sponsorship via the HRDF. Get in touch with them; exploit all available options. If retrenchment is unavoidable, give adequate advance notice to affected staff, ensure that they get their dues and/or compensation and provide them
counseling, and even the possibility of securing a job for them elsewhere or creating a job for them through outsourcing. Invest in a workforce that is flexible and skilled to meet the needs of the ever-changing business environment.
Management Insight #4: Accountability of Employees/The Retrenched
If you managed to survive the scaling down, take stock of your achievements and assess yourself. With a leaner workforce, it now falls upon your shoulders to be multi-skilled to take on additional tasks and challenges. Burn the midnight oil, read up more on the latest market trends, learn about the different sides of the business. In short, make yourself even more valuable and marketable than you
were before! If you have been retrenched, take this temporary lapse in your career as an opportunity to upgrade and re-invent yourself. Take the time to explore your other latent talents. Many successful people today will tell you that the economic and social disruptions was indeed a blessing as it forces them to change and seek out new opportunities. As they say, "when the goings get tough, the
tough gets going!"
Moving Forward
In the past, a worker could rely on one set of skills which would guarantee a job for a lifetime. But with rapid technological advances and the impact of globalisation now beginning to be felt in virtually every country, industry and company - workers have to continuously retrain, unlearn and relearn. It's time for the Government, educational and training institutions, industries, companies, and
most important of all - the individual worker themselves - make lifelong learning an inherent culture for both survival and the quest for excellence in every aspect of our lives.
Dr Wilson Tay, MMIM, MIM-CPT is CEO of the Malaysian Institute of Management, the national management organisation of Malaysia. MIM invites companies and professional managers to be members. Contact MIM Membership Support and Outreach at (603) 2164 5255; fax (603) 2165 4681; e-mail: enquiries@mim.org.my or visit www.mim.org.my.
