Don't 'retrench and hire'

THE usual practice of retrenching workers in a downturn and hiring new ones in an upturn will not work as the economy becomes more knowledge-based, said labour chief Lim Swee Say.

'At the company level, you are going to lose a lot of experience, a lot of skill and more importantly you are going to lose a lot of time, because it takes time to hire new workers, to retrain new workers,' he said on Wednesday.

'And if you are in a knowledge-based economy, the time needed to retrain new entrants will be much longer compared to a labour-intensive operation.'

Speaking to more than 2,000 human resource managers and executives at a Human Resources summit on Wednesday morning, he cautioned that the repercussions of a 'retrench-and-hire' practice will go beyond the company.

'At the level of the economy, this will lead to a massive relocation of workforce and at the national level, it could lead to a rise in structural unemployment.'

Mr Lim urged HR practitioners to play their part in getting their companies to focus on 'reskilling, upskilling and multi-skilling' their existing workers.

He also related his meetings with the management of three different companies, all of whom told him they were thinking of ways to cut jobs to save costs.

But on their minds too were longer-term concerns such as upgrading workers, retaining talent and recruiting new blood to refresh the leadership, so as to stand ready to ride the upturn in the economy.

'From manufacturing to services, form hotels to factories to banks, they all face the same challenge: On the one hand, how to be cheaper to survive today. On the other hand, how to be better to grow tomorrow,' he said.

The two-day HR Summit 09 at Suntec Singapore features more than 70 motivators, business experts and human capital specialists.

- The Straits Times