How should employers balance merit and local employment in retrenchments?

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Employers Should Balance Merit and Local Employment by Prioritising Objective Criteria and Skills Transfer in Retrenchments

Employers in Singapore should balance employee merit and the imperative to maintain a strong local employment core during retrenchment exercises. This balance is achieved by adhering to objective selection criteria, focusing on preserving skills essential for business sustainability, and ensuring that retrenchments do not disproportionately reduce the proportion of local employees. The Tripartite Partners, comprising the Ministry of Manpower (MOM), the National Trades Union Congress (NTUC), and the Singapore National Employers Federation (SNEF), have issued updated guidance emphasizing these principles.
Objective Criteria and Skills Preservation

The selection of employees for retrenchment must be guided by objective criteria, with primary consideration given to employee merit and the preservation of skills crucial for the long-term sustainability of the business. This approach ensures that critical capabilities within the organisation are retained, even amidst workforce reductions. Employers are encouraged to adopt a forward-looking perspective on their manpower requirements, which includes the strategic objective of maintaining a robust Singaporean workforce.
Maintaining a Strong Local Core

A key principle in responsible retrenchment is that such exercises should not lead to a reduction in the proportion of local employees within the company. This can be actively managed by retaining a proportionately higher number of local staff during the retrenchment process. The updated advisory from the Tripartite Partners aims to provide employers with clearer guidelines on executing retrenchments responsibly when they become unavoidable, reinforcing the commitment to a strong local employment base.
Skills Transfer and Development

Local employees are actively encouraged to develop new capabilities by learning from foreign employees who possess specialised or niche skills. Companies are expected to make continuous efforts to facilitate the transfer of these business-critical skills from foreign staff to their local counterparts. This focus on skills transfer not only benefits individual employees by enhancing their competencies but also contributes to the overall strengthening of the local talent pool and the economy in the long run.

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How should employers balance merit and local employment in retrenchments?

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