If your company has insufficient work for your workers, you should take a long-term view of your manpower needs to decide on the best course of action. You could consider the following alternatives to better manage your excess manpower:

• Make use of the Jobs Credit Scheme to reduce wage costs. The Jobs Credit Scheme was introduced in Budget 2009 to encourage businesses to preserve jobs in the downturn. Under this scheme, companies will receive a cash grant for local employees who are on the Central Provident Fund (CPF) payroll. This scheme provides a significant incentive for you to retain your local workers.

Companies planning to cut their workforce should consider sending their local employees for skills training and upgrading under the Skills Programme for Upgrading and Resilience (SPUR) which is administered by the tripartite partners. SPUR helps both companies and workers re-skill, up-skill and enhance their capabilities to take advantage of the eventual upturn. SPUR provides attractive funding to help your company defray training and manpower costs. Companies can look up the details at WDA’s website (http://www.wda.gov.sg).

• Companies should consult their workers and unions about implementing shorter work week, temporary layoff or other flexible work arrangements, and the level of payment to be given to the affected workers, taking into consideration the performance and financial position of the company. Companies may refer to the tripartite guidelines on managing excess manpower that advise on payment for workers affected by such measures at MOM’s website.

If your company has a flexible wage system in place, and the lack of orders may have resulted in cash flow issues, you may consider adjusting the various wage components in consultation with the union or workers concerned. The various wage components include: Variable Bonus Payment, Annual Wage Increment, Monthly Variable Component and Annual Wage Supplement (AWS).

Employees can be re-deployed or rotated within a job scope that is enlarged, enriched or restructured. In the event where the excess is of a long term nature, or companies could have restructured and resulted in redundant workforce, you can may have to consider out-placing excess manpower to suitable jobs in other companies, taking into consideration the workers’ physical and mental condition, skills and experience. When implementing these measures, management should lead by example and adopt the principle and spirit of equal sacrifice. Close consultations and transparency should prevail. Your company should consider how the measures to cut costs and manage excess manpower could be appropriately borne by employees, taking into consideration the financial hardship faced by lower-income employees.

Some companies may have to implement more severe cost cutting measures. In this case, you may consider implementing no-pay leave, in order to survive and save jobs as the downturn prolongs.

Before implementing no-pay leave:

• you should have considered or implemented other measures, after consulting your workers and union
• you should recognise its impact on rank-and-file workers in determining the extent and duration of the measure
• senior management to lead by example, by accepting earlier and/or deeper cuts
• you could implement no pay leave in conjunction with other cost-cutting measures, if business conditions warrant it.


During the no-pay leave period, management should arrange to send the affected workers on SPUR training to upgrade workers’ skills and employability for the benefit of both the workers and the company in the long run.

Having implemented various cost-cutting measures, companies may still need to restructure their operations and carry out retrenchment exercises to keep their businesses viable.

Retrenchment exercises should be implemented responsibly. If retrenchment needs to be carried out, your company should notify your union and the Ministry of Manpower (Labour Relations & Workplaces Division) as soon as possible of the impending retrenchment once the decision is made. This will enable your union, if it is unionised, and MOM to help your company manage any labour issues arising from the retrenchment exercise, and help your affected workers find alternative employment expeditiously or provide them with relevant training for enhanced employability.

As far as possible, affected workers should be informed of their impending retrenchment before notice of retrenchment is given. As a responsible employer, you should also help the affected workers look for alternative jobs in associate companies, in other companies, or through outplacement assistance programmes. NTUC’s e2i (Employment and Employability Institute) is a one-stop, skills-based institute that has been providing the avenues for employability assessment and coaching, skills training and job placement for retrenched workers. You may want to visit http://www.e2i.com.sg/ to find out how e2i can help to re-skill, up-skill and place job seekers into work as quickly as possible.