Coping with Unavoidable Cost-cutting- Employee Guide

1. What to do if Cost-cutting or retrenchment is unavoidable (an employee’s perspective)13 November 2010 Edward Tsang Assistant General Manager Pollution & Protection Services Ltd.

2. Cost-cutting or Layoff Hang Seng Index ? :2x,xxx 足金金價 ? :1x,xxx 全港樓價走勢 - 1997 :$6,000 - 2010 :$5,000 necessary at this moment ? Yes. Rapid changes in the economy, not competitive would lead to layoff.

3. HK Unemployment Rate

4. Worldwide Unemployment Rate(The Highest rate)

5. Worldwide Unemployment Rate(The Lowest rate)

6. HK Unemployment Rate HistoryJuly - Sept 2010 : 4.2%From 1981 – 2010 : 3.99%Historical highest : 8.6%

7. You Can Change People You Can Change PeopleYou Can Change People

8. Before considering Wage reduction / Layoff, think of every practical alternative • Employers may consider – HR Management Initiatives • What Employees should help the company to overcome the business problems ?

9. PRACTICAL ALTERNATIVESHR Management Initiatives: • Reduce the payroll by voluntary leaves • Enhance training programmes • Deploy existing employees to any newly created posts • Suspend recruitment • Review & reduce company’s costs for each department

10. PRACTICAL ALTERNATIVESHR Management Initiatives: • Negotiate with suppliers for a better price • Reduce operations overheads’ expenses • Minimize advertisingexpenses • Promote your company’s products / services & explore new market • NO PAY / ANNUAL LEAVE before layoff

11. PRACTICAL ALTERNATIVESHow Employees can help? • Be open and frank with their staff regarding business problems • Seek understanding and cooperation of their employees to reduce costs • Organize regular cost-saving meeting with staff • Offer incentives to staff with innovative ideas

12. Company Initiatives – Wages reduction • Obtain consent from your employees in advance • Hold discussion with your staff via Staff Unions • Discussion be FRANK & SINCERE… • Recognize that employees are important stakeholders • Avoid legal issues

13. Company Initiatives – Wages reduction • 切勿採取 “不容討價還價”…..”應用有商有量” • A series of options to employees, such as partial reduction on benefits / wages/ OT • Across-the-board % of reduction • Senior Management – greater % • Try to exempt those staff with lower pay • Standard “Q&A” for all management staff • Be patience and explain to employees that “External” factors beyond company control

14. Company Initiatives – Wages reduction • Listening with sympathy and feedback • Offer incentives to staff who increases productivity • Discuss with EAP consultant - financial problem ? • Review the company’s business for every 3-6 months, and make adjustment

15. Company Initiatives – Wages reduction • Reasonable period for employees to consider the proposal (say 1-2 weeks) • If the business situation is still worsens, layoff has to be considered. • ASSURE them Severance Pay be calculated before wage-reduction • Assurances to employees should be in writing to underline company’s sincerity

16. Employees Concerns • (I) Understand all the details of wage reductions • (II)Whether to consider the wagereduction: • The extent of Wage reductions and other benefits • Your personal circumstances • Your prospect of finding another job • Your employers business prospect • (III)Encourage staff to consult with their family members or Labour Department • (IV) Seek for assurance for salary adj. when business returns normal

17. Company Initiatives - Layoff • Humanitarian Factor • Consult with their DHs / HR • Market Situation – review manpower needs • One-off exercise – within a timeframe

18. Company Initiatives - Layoff • Hold FRANK & OPEN discussion with Staff Union and Consultative Committee • Be patient • Discuss and explain the termination compensation • No less favourable than EO • Layoff will usually creates emotional or stressful sentiments • HR show compassion and understanding

19. Company Initiatives - Layoff • Layoff criteria is objective, fair and non-discriminatory • To avoid issues relating to the current Discrimination Ordinances: • Sex / Disability / Family Status / Race Discrimination in HK • To use nature of work, skills & other work-related factors

20. Company Initiatives - Layoff • Staff with poor performance should be arranged on phase 1 (i.e. DO NOT include unperformed staff) • Ex-gratia payments • Reference letter : • Layoff is beyond company’s control • Unrelated to the employees’ performance • Priority will be given to employees should company situation returns to normal

21. HR Initiatives • Housing allowance / education subsidy for a period of timeframe • Offer a reasonable period before insisting on regaining the company quarter • Counseling and other forms of assistance • Competitors/Subsidiaries for job vacancies • Labour Department / Exe. Search firms

22. HR Initiatives • Set-up a Hotline for employees • HR to keep contact with those retrenched employees and re-employ them • Post-redundancy – • Remaining employees might think that their sense of trust has been betrayed • Top management hold discussion & to explain the company’s future prospect • Be more sensitive and caring with the remaining staff

23. Employees Concerns If you are the one to be retrenched, please consider: • Statutory and Contractual entitlements • Searching for new job, understand the current market situation, and be prepared to: • accept a lower salary • ready to travel for a longer distance to your new workplace • face new challenges ahead • Do not lose your confidence when meeting new challenges

24. WAYS TO HELP LAID-OFF EMPLOYEES AND BUILD GOOD WILL • Write a memo and inform remaining employees • Have EAP representative / HR to meet with laid-off employees

25. WAYS TO HELP LAID-OFF EMPLOYEES AND BUILD GOOD WILL 3. Provide a workshop on resume / interview help by HR • Solicit vacancy announcements from other employers • Sponsor job fair

26. 裁員不裁心 雙贏方案 人性化的部署 • EAP僱員支援計劃，透過24小時及面談輔導，提升被裁員工信心及復原力 • 安頓操刀管理人員，讓他們明白公司處境，協助他們調整心態，從而協助員工面對轉工壓力

27. 裁員不裁心 雙贏方案 人性化的部署 • 降低傷害 派大信封的安排須恰當，避免被裁員 工情緒失控及 提供3個月的職業輔導 • 事後須安撫人心 EAP安撫人心並提升員工士氣，降低其額外工作承擔之壓力

28. 裁員而不裁人心，你願意行出這一步嗎？