Would you sell Bessie?
Have we as a society considered what the social and economic impacts will be to our society when both government and private companies continue to make employees redundant at the current rate of @ 400,000 employees a year? Of those employees being made redundant the redundancy packages will continue to get smaller due to tenure and hours of work thus reducing financial buffers? Financial stability is further eroded by unemployment or reduction in hours of employment. Social impacts, although significant are often masked by the fact that one person remains employed in a normally two income family. The family member most likely to be made redundant is the male, which in our society has significant ramifications. Is redundancy the easy option or is it time we rethink our options?
I will never forget when my boss Henry, the CEO of a division of CSR outlined my primary responsibility as his HR manager. He did so by telling me this story. Before he was CEO he managed a sector of the business, which was a rural based industry. He was told that he would have to make redundancies as the division wasn’t making enough money. He went home and told his wife and she said: “he was the boss and as the boss he had a responsibility to find another way”. Fortunately for the employees and their communities he negotiated to fast track a new product and acquired funding to build a new plant that was able to re-deploy employees. He said my responsibility was to challenge, to think outside the square and not to accept the easy option, as I was the voice of the employees as well as the company. This has not always been easy as the facts detail.
The retrenchment rates
During the last twenty years redundancies still continue to be somewhere between 3 and 4{01332a80e2e652688e18927fa9a6162580960d47bc08263a3993439d666dcd52} of the population. According to the Australian Bureau of statistics during the 12 months to February 2013. 19{01332a80e2e652688e18927fa9a6162580960d47bc08263a3993439d666dcd52} (or 381,000) left their last job because they were retrenched or had their job made redundant. When expressed as a proportion of all people who had been employed at some time over the previous 12 months, the rate of retrenchments in the 12 months to February 2013 was 3.1{01332a80e2e652688e18927fa9a6162580960d47bc08263a3993439d666dcd52} as outlined in the graph below:
The amount of payouts
As redundancies have been a part of the workplace for over twenty years, there are fewer employees who have large redundancy payments because people have not been in their current job for a long period of time. If fact, according to the chart it is men between 25 and 35 who have the highest level of redundancy, and this is closely followed by the next age bracket.
The industries affected by redundancies.
Governments are increasing redundancies in the public service while in the past it has been predominately the domain of the private sector. I expect currently there would be significantly more people with longer tenure, in the public sector, however this is only an assumption. Those people, I would expect, would have the advantage of larger redundancies like the private sector has had in the past.
In the private sector major redundancies have occurred in lower skilled employment like construction, mining and manufacturing. The ABS however to my knowledge does not keep data on contracts that have been paid out which often effect higher skilled workers. Often skilled workers, particularly in the older age bracket, with contracts paid out, can be lost in the statistics.
Economic impact
Initially in the private sector and now more so in the government sector redundancy was often seen as a financial advantage, with many people being able to pay off their mortgage for example. However going forward if the 3 to 4{01332a80e2e652688e18927fa9a6162580960d47bc08263a3993439d666dcd52} of the population continue to be retrenched this will not be the way of the future.
Again the ABS states that almost 30{01332a80e2e652688e18927fa9a6162580960d47bc08263a3993439d666dcd52} of retrenched employees don’t get employment within 12 months. Approximately 20{01332a80e2e652688e18927fa9a6162580960d47bc08263a3993439d666dcd52} are now not in the labour force and ofthose people who remainin the labour force approximately 30{01332a80e2e652688e18927fa9a6162580960d47bc08263a3993439d666dcd52} have their hours of work changed.
I can’t help but wonder if redundancies have seduced us into thinking that payouts reduce economic hardship and can therefore help us to continue to justify our position on redundancies. The consequence of this is we abdicate any responsibility and our ability to think laterally or creatively is significantly reduced. If the trends going forward are to be relied on it will be impossible to justify this position unless you are truly deluded.
Social impact
According to psychologists there are a range of emotions attached to redundancy: anxiety, depression, embarrassment, irritability, inability to think clearly, ‘‘catastrophising’’ and even relief. I wonder what the impact of this will be when there is not a real economic benefit of redundancies, particularly if employment becomes more difficult to obtain.
I always remember a wonderful story that was told to me about Bessie the Cow. Bessie was a little calf that had lost its mother and was brought up in the home paddock and was home fed. No one would think of killing Bessie. When Bessie got too large for the home paddock she went out into the bigger paddock and always came up to greet the family. Know one thought of killing Bessie. Then one day the farm was sold and Bessie became a Return on Investment (RIO) How easy was it to kill Bessie?
I think it is important that we don’t see employees as numbers and percentages but see them as people. It is so easy to wipe a number off a spread sheet but not as easy when you have associated with them as the story of Bessie represents. I think it is important that people who are making redundancy decisions not look at redundancies as the first choice or the easy option. We need to challenge our assumptions and look at other opportunities like Henry did. The consequences of not doing so are becoming more transparent in the numbers both socially and economically. My challenge to anyone who reads this article is to think outside the square when considering redundancies, there may be another option. However if you don’t think there is there never will be one.
