Company Restructuring? Why Businesses in Asia Need Outplacement Services During Retrenchments

The wave of mass layoffs that began in the West in late 2022 has not died down, as we can still see scores of companies retrenching staff – particularly when it comes to tech giants such as Twitter and Meta. This wave has also reached Asian shores of late, even as countries such as Hong Kong have fallen into a recession.

While there have many businesses in Hong Kong that have strived to retain their employees during an economic downturn, in some cases, company restructuring and retrenchments may be inevitable. Layoffs are never easy on those affected by them, but if properly planned, its effects can be less harsh on both the employee and employer.

How are companies preparing for retrenchments?

When layoffs are done abruptly without foresight, not only they do leave staff in a lurch, but employers are also at risk of facing legal repercussions and a ruined brand image. If mass layoffs are in the cards for your organisation, here are some steps you should consider:

  • Plan ahead of time so your employees aren’t abruptly left unemployed
  • Communicate reasons for the company restructuring and purpose of retrenchment
  • Come up with support measures for your staff such as benefit payments or an outplacement service

Speaking of outplacement services:

What can outplacement do for you?

The concept of an outplacement service is that it provides job opportunities for retrenched staff, allowing them to be re-employed after being let go. Not only does that safeguard their careers, but it is also a great way to look out for employees who have contributed to your company’s growth. At the same time, employers who utilise outplacement services get to maintain their reputation as a responsible employer, and it lowers the risk of facing employment claims and legal repercussions. Outplacement services also come with employee aftercare that can benefit your employees such as clinical counselling and even support for family members.

Companies in Asia turn to outplacement

While the wave of layoffs may not have hit Asia as hard as Europe in 2022-2023, an increasing number of companies in Asia are using outplacement services as a measure to prepare for rainy days. For instance, Deliveroo, a UK-based delivery company has laid off 10% of global staff, including their employees in Asia – particularly Singapore. However, their founder and Chief Executive Will Shu has said that ‘those affect by the layoffs will be offered “enhanced redundancy packages that go above government requirements and support” that might include redeployment opportunities and outplacement’.

Another prime example would be camera and social media company Snap Inc. that also has a sizeable number of staff in Asian countries such as Singapore, China and Japan had laid off 20% off its staff at the end of Q3 2022. When the announcement was made, the company also mentioned that they would provide “outplacement support according to local market regulations” and “processes and launch an opt-in talent directory to help departing team members connect with new opportunities”.

To wrap up, layoffs are a major event which can leave employees feeling dejected and aimless, and this can also affect the morale of employees who remain in the company. To better prepare for the Hong Kong recession, it’s vital for businesses to ensure their employees can be taken care of to a certain extent, and at the same time safeguard themselves through a cost-effective and practical method such as an outplacement service.

Learn more on how outplacement can make your company restructuring smoother through our concise employee outplacement guide. If you’d like to learn more on our outplacement services, reach out to us and we’ll be in touch with you!