Moving on is never easy, especially when both parties would have preferred to stay together. However, there are times when maintaining the status quo just isn’t sustainable.
This applies to personal relationships as well as those between employers and employees. With the number of retrenchments in Singapore more than doubling in 2023 (14,590) compared to 2022 (6,440), it shouldn’t be surprising if the number remains high in 2024.
Two weeks ago, Shopback announced that it will be retrenching 195 roles, or about 24% of its workforce. Unlike other retrenchment that were criticised as being executed in a sub-optimal manner, Shopback’s retrenchment, while unfortunate, was done in a highly transparent manner with its co-founder Henry Chan publishing a message on the Shopback website to explain the rationale behind the retrenchment and outlined what the company is doing to help affected employees during this challenging transition period.
Monetary Benefits For Retrenched Employees
The following are the monetary retrenchment benefits that Shopback has announced will be given to affected employees.
Notice Period: Employees will receive at least 2 months of their notice period
in line with notice periods as per their employment contract or local statutory guidelines, whichever is longer. This suggests that some employees have notice periods that are longer than 2 months, and thus, would receive their notice period salary that is more than 2 months.
Severance Payment: Affected employees will receive 1 month of severance pay for every full year of service or based on local statutory guidelines, whichever is higher. For example, if a team member has been at ShopBack for 3 years and 1 month, they will get at least 3 months’ severance pay.
Leave Encashment: Accrued and unutilised Annual Leave, Off-In-Lieu, Birthday Leave and Maternity/Paternity Leave will be encashed (if applicable, as of the last date of employment).
ESOS Vesting: The ESOS grant(s) vesting schedule will be accelerated to the next tier.
Non-Monetary Benefits For Retrenched Employees
Beyond just monetary benefits, there are also non-monetary/non-cash benefits affected employees will receive.
Learning and Development: Affected employees will receive a full year’s worth of Individual Development Plan (IDP) Budget to assist in continued learning.
Healthcare: Affected employees will receive extended medical insurance coverage until 30 June 2024, in markets where this is currently available and subject to terms limited by local insurance providers. They will also continue having access to mental healthcare support (via the Intellect app) till 30 June 2024.
Career Transition Support: Depending on their location, affected employees will be provided support in the form of either (1) CV reviews, mock interviews, and access to a professional coach, or (2) a Career Transition Support Allowance, as pre-determined by their leader in consultation with HR.
Immigration Support: For visa holders, their repatriation costs, including airfare and a budget for moving expenses, will be covered to ensure a seamless transition back home if that is the option they intend to pursue. The Shopback HR teams will also be available to advise on visa and immigration matters.
Retrenchment isn’t easy, or cheap. Even as companies strive to reduce their manpower costs to ensure long-term sustainability, those implementing workforce reductions face considerable initial expenses due to the severance packages they provide. These costs, while one-off, can be substantial and reflect the financial commitment required to support employees during the transition period.
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