What do businesses do with their unwanted people?

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(Photo credit: johnb/Derbys/UK.)

A lot of people say you should not buy newspapers, turn off your radio and not watch TV. I even know some small business owners who avoid the media altogether just so that they are not affected by all the negativity.

Who can blame them?

We don’t know when or if the down economic cycle is going to end but at the moment it seems as though we are in the perfect economic storm. Interest rates are rising, the currency has gone South, fuel and other energy costs have skyrocketed, consumer debt is at unimaginable heights and demand in certain sectors has shrunk.

If you look at the results coming out from the listed companies, you’ll notice how certain businesses are under huge strain, especially those in highly competitive markets such as banking and retail.

It’s no wonder then that companies are cutting back on their major cost areas such as people. Labour surveys show that retrenchment levels in January 2014 were at a 10-year high with 36,290 jobs lost. The saddest part is that many of these are in the potentially high employment areas of manufacturing and construction.

What happens to all of these people who have worked in these companies? Where will they find new jobs? What happens to the semi-skilled and the highly skilled?

It’s rare for companies to have any sort of outplacement service for retrenched employees. Final packages are handed out and security guards lead them to the building door or factory gate.

Outplacement services are there to help individuals at all levels and backgrounds by supporting them through retrenchment, helping them to find jobs and even in some cases providing reskilling courses so that they are able to stand a better chance of finding reemployment. This service is often non-existent and even allowing employees to use office equipment to send out their CVs and look for jobs is not part of the retrenchment phase. Employees leave with a bad feeling about the company and those surviving employees watch and wonder how some companies treat their retrenched employees.

Some specialised, smaller businesses, can help retrenched employees reskill and reposition themselves for the job market. But they have to do a lot of work on areas such as coaching for self-esteem, self-confidence and personal vision. When you’ve had your teeth kicked and your face is full of blood and with no one showing any compassion, it’s hard to pull yourself together, move on and get all fired up about “opportunities” out there.

An even smaller, highly specialised number of businesses and consultancies can help the tiny minority of retrenched business people with starting something of their own from scratch. Look, when the horror subsides and the retrenched are able to get back on their feet some may want to start something of their own – in fact, they may have longed to do so but had no expression or outlet to make it happen. These specialist business advisers can help you with your idea for a small business or consultancy. They’ll assist with questions such as “Do you have customers? Do you have the potential for sales? They may find partners that can help them realise their vision.

This is what is called a “sustainable” or “common sense” approach to retrenchments but it has yet to gain any sort of traction. The attitude towards retrenched employees needs to change from seeing such outplacement services as a cost rather than a contribution towards social responsibility and reputation as a company of good standing. All the surveys of top employers mean nothing until you know how a company treats you at the end of your employment with them.

Something needs to be done if you ask me. Stop and think about it. Look how the UK has handled job creation in a positive way. We need a national job summit to talk about the crisis right away. Start-Up Britain, the campaign to boost entrepreneurship, has seen more than 520,000 new businesses registered, 8% up on 2012 and a record. That’s how a government chipped in. Companies here can do the same.

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