7 Signs Your Company Might Be Headed for a Retrenchment Exercise
2016 has been predicted as a bad year for jobs with massive retrenchment exercises happening at the Banks and Oil & Gas Companies already. How do you know whether your role is at stake? Here are some warning signs.
1. Your Industry is struggling and other companies in your sector are retrenching. During the 1997 Asian Financial Crisis, many industries in Asia were badly hit by the economic instability in the region. Many sectors felt the pain and started to downsize. The oil industry was badly hit and many of the “Oil Majors” started letting people go. Across Asia, large companies retrenched significant numbers of their staff. If you see your competitors handing out pink slips, chances are high that your company will be tempted to follow suit shortly. Be prepared with an exit strategy.
2. Your company announces ‘weaker earnings’ for several quarters in a row. In today’s context of stock-holders demanding higher returns on their investments, many public-listed companies are forced to trade long-term strategies for short-term profits. As such, the stock market can be extremely intolerant of any ebb and flow of earnings and will not hesitate to punish listed companies who are not performing. If your company has not been delivering on your CEO’s promises, he may be hard pressed to cut costs and often, headcount is reduced. So, watch out for those announcements.
3. Changes at the top. When your company has been acquired, there will probably be a lay-off ahead. Belonging to the ‘acquiring company’ does not guarantee your safety either, as you may also be asked to go. A change to the ownership is not the only event to watch out for. Sometimes, a new CEO or MD parachutes in with the aim of ‘turning things around’ – and many times, the key doctrine behind this move is a ‘new broom sweeps clean’ philosophy where he will make whatever painful cuts are necessary just to improve the bottom line.
4. One of the early signs of tough times ahead is when vacant roles aren’t backfilled, or when there is a total hiring freeze. Even at the expense of having one person doing the job of three, the company just ‘can’t justify the headcount.’ Often, these headcount freezes are initiated at the HQ level and is out of anyone’s control.
5. If you find the volume of your work decreasing significantly, or are increasingly being left out of major projects. If business is bad and you are literally sitting at your desk staring at your facebook page all day long waiting for projects to come in, your job is in deep trouble. If this happens to you, it is clear that there is no need for your services and you are looking like a sitting duck with a target-sign painted on your back. Please start looking for new projects to do.
6. When your company embarks on a series of extreme cost-cutting measures. These could include ‘no more drinking straws will be provided in the pantry’ (True story!). Or when the boss decides to move to a much smaller office in the boondocks where the rent is much cheaper. They may even start to commence feasibility studies on whether your function could be outsourced to India. These are clear warning signs of the storm looming ahead.
7. When HR or your boss asks you if you can stomach a salary reduction or come in three days a week. This is usually the final death knell before issuing you the pink slip. It is a cost-cutting measure that companies do in a last ditch attempt to rein in employment costs.
If you see any of these signs happening in your company/industry, then it may be time to start working on your Career Strategy.
Tune in next week when I share with you how to develop your own Career Strategy in such a situation.
Excerpt taken from Chapter 14:”Help, I’ve Just Been Retrenched” of “Career Crossroads – A Headhunter’s Guide to Career Strategy”. You can purchase the book online here.
The author is the Business Development Director of Lee Hecht Harrison Singapore, a Global Offboarding Services Provider.