Train retrenched workers to manage their money or risk ending up in court
Employers that retrench workers without ensuring their financial wellbeing run the risk of damaging their brands - and facing litigation, says ipac corporate consultant Nola Rihani.
Save money through redundancy alternativesRihani's comments come after an ipac study - based on a survey of senior HR professionals and outplacement providers from Sydney and Melbourne - revealed that:
(Indeed, as of last week they are legally obliged to do so. See related article.)
She says they could put in place "transition-to-retirement" strategies (in which mature-aged workers are offered "grandparental leave" or other flexible arrangements, but their knowledge is retained), reduce annual-leave balances or freeze salaries.
Other cost-cutting measures, Rihani says, include:
Employees should also be tapped for cost-cutting initiatives and alternatives to retrenchments, she says, and be encouraged to develop and achieve those ideas within timelines. Employees, she says, often come up with proposals that "save the company more than required'.
Best practice processWhen forced to lay-off staff, however, employers "can enhance their transition programs with better targeted and relevant financial advice provided prior to the employee's departure", Rihani says.
This will not only protect the employer's reputation, and protect it from litigation, she says, but will give departing employees "peace of mind" and help them to "stretch their transition capital".
A best practice process, Rihani says, involves addressing all of the departing employee's financial concerns and ensuring that financial education is a measurable component of the outplacement contract.
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