Although the heat and humidity of summer are now upon us, the dog days this year have put the economy in a deep freeze, with bad news pouring in almost constantly.
The entire global economy is in a slump. Here in Taiwan, the latest government figures indicate that unemployment has risen to 4.5%. Some 440,000 are now unemployed, and the number of people directly affected by unemployment stands at 1.02 million.
Flip through the press and you will see many reports of employers cutting salaries, closing factories, and releasing employees. It is happening everywhere-in traditional industries, high-tech industries, and at firms based both overseas and in Taiwan. Virtually no-one is immune.
Even Evergreen Group chairman Chang Jung-fa admits, "We've been through four or five economic downturns, but I've never seen it quite this bad before." The group's sea and air freight businesses have both fallen off by 30%. Chang predicts, "It's going to be at least three to five years before the economy picks up again."
With profits down at even the biggest corporations, one can well imagine the hard times being faced by the small- and medium-sized firms that are the backbone of Taiwan's economy.
Quiet downsizing revolution
Amid such harsh conditions, businesses have to lower costs and expenditures, and this inevitably impacts on people. We are in the midst of a quiet downsizing revolution. Ting describes how to carry out a proper downsizing.
First, a company must clearly communicate why it needs to reduce its workforce. An intelligent employer will make sure employees understand that belt-tightening is unavoidable due to industrial restructuring or a company transition.
Second, an employer must have a clear grasp of the company's financial condition in order to determine how to structure its severance packages. The Labor Standards Law sets certain minimum requirements, but a responsible employer will generally go better in order to avoid a labor dispute. Certain things must be provided, such as severance pay (if the employer cannot give advance notice of termination), mid-year or year-end bonuses, annual performance bonuses, and salary for the current month.
A company must notify the local labor affairs agency seven days in advance if it intends to lay off employees. If employees are unionized, it is also best to provide advance notice to the union at that time, so as to seek consensus concerning the issues most important to labor (minimizing job losses) and management (ensuring the company's continued viability).
When considering layoffs, the first thing top executives must do is discuss with middle management how the downsizing will proceed. Middle managers must be told how to deal with problems and respond to unexpected situations.
A company must also give careful thought to the timing of a layoff. Should it be done the day before a holiday? Around New Year? Just before people get off work for the day? Soon after they arrive at work in the morning? The reactions of employees will differ in each case.
Anyone being laid off should be given notice by a direct supervisor who is familiar with his or her work. Care must be taken to treat the person with dignity, and personal attacks must be avoided, to minimize the trauma of the job loss.
In addition, certain documents must be given to an employee being laid off, such as proof of termination, and a letter of recommendation from the person's supervisor (to help in finding a new job). It is also best to calculate in advance how much salary is due, and how much tax the employee will owe on severance pay.
After implementing layoffs, a company should hold a formal review to determine the effectiveness of the downsizing and to consider whether the process was flawed in any way. The employees who remain typically feel very jittery about job security, and it is important to take steps to bolster their morale.
As one who has laid others off and been laid off himself, Ting has a special feel for both sides of the situation: "Employers have to put themselves in the other guy's shoes. They have to take good care, emotionally and financially, of the people they're letting go." Ting urges employers to show sincere concern for released employees, and to help them find other work.
Life after layoff
An avid reader of classical Chinese literature, Ting feels that "you can lose a job, but you mustn't lose your dreams." If you are hit by unemployment, you have to face the problem head on. Most people are laid off because of problems faced by the company, so there's no reason to get overly critical of oneself.
At the same time, however, Ting does feel that a period of unemployment is a good time to take stock of personal strengths and weaknesses, and to ask: Why was I dropped while other coworkers were not? Are my professional skills no longer what the organization needs? Have I been relying on one type of skill while failing to pick up another? Have I been keeping up with the latest information in my field? Ting encourages people out of a job to work on their weak points and make themselves more marketable, so as to turn crisis into opportunity and emerge successfully from adversity. If one has strong abilities, there is nothing to fear.
The words to the song "Little Blade of Grass" tell of courage in the face of adversity. Vivian W. Yen, chairwoman of Yulon Motor Corporation, has adopted them as her own personal motto, and Ting offers them to his readers to help them deal with the lack of job security:
When the wild winds blow/ He just tosses his head./ When the winds abate/ He stands again up straight./ When the rain is pouring/ He leans over to collect the water./ When the rain stops/ He lifts his head and stretches his legs./ He's not afraid of the wind./ He's not afraid of the rain./ He's determined to grow tall./ This little blade of grass/ Is not so small after all!
We could all do ourselves some good, whether as a company or an individual, if we sang ourselves that song from time to time.
p.107
Author: J.D. Ting
Publisher: Yang-chih Book Co., Ltd.
Date of publication: June 2001
Price: NT$280
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