Why do Companies Retrench Staff?
As you may know; companies regularly retrench their staff. In fact; you will find that even the most successful companies in the world do it on a regular basis. So; why do they retrench their staff? Well; that is what we are going to take a little peek at on this page! We will also look at some ways you can protect your income. One way is to ensure you have adequate retrenchment insurance cover.
Companies mainly retrench their staff in a bid to save money. Obviously businesses exist for the purposes of making profit. If they have too many staff they are eating into a lot of the profit, profit that may be better served going to their shareholders. This means that companies will regularly try to trim the fat of their company and ultimately whittle down their employees to the bare minimum that they need to continue to do business. This means staff that was required for a project that is no longer taking place may go. After all; most businesses do not want to pay employees for sitting around and resting on their laurels. I know I wouldn’t want to pay staff if I ran a company like this!
In addition to this; companies will often retrench their staff if it is likely that they will be going bankrupt soon, or even if they are in the process of going bankrupt. Staff are one of the biggest expenses for a company and if the business is going to go under due to rising costs then you can bet your bottom dollar that the staff who work for it are going to be the first to go. After all; they are not assets that can be sold on in order to cover expenses and the like. When facing bankruptcy you will find that the majority of companies out there will retrench their staff to the point where they can barely operate. They will then decide whether staying open is actually worth it or not. If it is not worth it then the staff that remains will end up going too.
Remember; there is no way in which you can really protect yourself should the company that you work for decide to retrench staff. I mean; they want to save money, and if you are in the firing line then you are going to go. You will be surprised at how difficult it actually is to convince people to continue to employ you when they have made their mind up. The only way in which you can protect yourself for the future is to opt for retrenchment insurance.
The general idea of retrenchment insurance is that it will provide you coverage in the event that you are made completely redundant. The retrenchment insurance should, for the most part at least, provide you coverage with regards to your income. This means that you should hopefully not be losing out on too much of your income when you head out and try to find another job. The retrenchment insurance may also provide other benefits to you.
Most retrenchment insurance policies will have some form of waiting period. You should not wait until you get retrenched. You need to make sure you have protection well in advance.
To get affordable retrenchment insurance, feel free to give us a call. We can arrange a free quote from a top South African retrenchment cover provider.
Don’t wait until it is too late. Make sure you get peace of mind today.