How should business, labour, and the government deal with plant closings and layoff of employees? Should government be involved at all? Support your argument with examples where possible.
Globalization has led to easy access to human and other resources across borders; it has given rise to outsourcing which has increased competition worldwide (Faiola, 2009). Slowing economy in Asian markets has dampened the extent to which workforce used to be earlier demanded. Due to rapid rise in globalization, political pressures and slowing of economies some prominent manufacturing units and plants have closed down, cutting a large number of jobs. Closing down of plants or impermanent shutdown of solitary vocational site along with office space hampers a large number of workers. The problem of plant shut down and layoff is acute in Singapore, where individuals have often resorted to suicide due to its adverse effects. An average of 50 workers are impacted who are engaged for 20 hours per week in a month, 500 odd workers who work for 20 hours per week along with 50 to 499 additional employees (Yellen, 2008). These employees constitute of one third workforce and hence will have an impact on other factors. The essay is an analysis of layoff and plant closing challenges in Singapore, and the ways business, laborers, government and society is handling them. The essay argues in favor of governmental, business and laborers intervention prior to a company’s plant liquidation which helps in adequate compensation of workers.
Layoffs of labors and shutting down of plants are rising due to decrease in demands of industrial production and investors from the West withdrawing their funds to invest elsewhere. Rise in Indonesia workforce have further diverted industrial funds and created opportunities for production and manufacturing in those countries. According to the “Redundancy and Re-Entry into Employment” a total 10% of professionals, managers, technicians and executives from service and manufacturing sectors were laid off, while overall redundancy rate increased from 5.5 to 5.8 employees per 1000 individuals. Contributing to further layoffs was Walt Disney, who shut down their game studio Lucas Arts due to cost-cutting purposes in 2012. Motorola also shut their cell-phone manufacturing unit removing 700 individuals from employment. Thus, many corporates and organizations are responsible for such layoffs and closing down of plants (Milanez, 2013).
Management of organization needs to have strategic plans and processes in order to deal with remuneration, closing down of plant expenses and in layoffs. Organizations needs to include job counseling, placement assistance, review potential working environment, administrative contacts and managing litigations in plant conditions and so on. Proper strategies within organization can help significantly overcome stresses during layoffs and plant close-down.
Laborers are the primary victims of layoffs and hence suffer from mental illness and absence of motivation (Ng, 2013). Providing therapists for reframing techniques and overcoming negative situation helps laborers cope with the condition and opt for further opportunities.
It is extremely important to understand and help laid-off employees overcome emotional and mental conditions; hence managers along with other employees should help them. An effective communication strategy helps individuals to cope up with the condition in a better way. When managers or administrators communicate with individuals it has a better effect compared to when it has been communicated by HR managers or administrators (Atanassov, 2009).
Government has an integral role to play in cases of plat shut down and laborers layoffs as most of the plants are run by private investments from Asian countries. Governments from Asian countries allow investments following pressure from influential countries which often divert their funds to more profitable and lucrative shores. Due to Asian market dominance in the world currently especially of Indian and Chinese markets FMCG; automobile and multi-brand retailing has grown at a more rapid pace compared to the rest of the world. Current recession in business scenarios and dominance of Asian markets has further put pressure on neighboring countries in regards to investment (Guzmán, 2014). The government has primary role in maintaining equilibrium in the national as well as international market prior to their breakdown. Workplacefairness.org has tried and created employment for various sectors but there have been major threats in other sectors. In Motorola and Seagate government in Singapore needed to intervene to resolve the issues. For Seagate government did not allow its compensation plan for 2000 workers, by putting a ban of liquidation of the plant. Government intervention is needed at the time of negotiation such that the company can provide adequate compensation. Liquidating companies need to adhere to Singapore’s trade act for compensation prior to considering liquidation (Chossudovsky, 2008).
In case of Motorola liquidation in 2008, the government failed to take proactive measures but once judicial system intervened the government was forced to resolve the situation. Primarily the company had refused for additional compensation to the employees and also refused to transfer workforce to Chinese plants. In its liquidation processes, the government intervened as the company’s stock price had been deeply affected, majority of the workers were shifted to Chinese plant nearby. Around 450 workers had been shifted till the end of 2010 (Beardwell, 2007).
In case of plant shut down and layoffs mental health of workers in the young and middle aged categories are affected. Workplacefairness.org has studied the impacts of plant shut down on young and middle aged individuals, which is associated with mental breakdown. The immediate closing of a plant and its subsequent layoff breaks down the mental health amongst human beings as indicated by a report of Channel NewsAsia (Han, 2013). This instability of mental health often leads to developing of suicidal tendencies amongst middle-aged individuals, who are less likely to find opportunities in jobs. There are multiple news of couples who have reportedly committed suicide post layoffs and plant shut down and these incidents are not uncommon in Asian markets, who are grossly dependent on foreign investors (Bernaciak, 2013). The rise in such tendencies can be attributed primarily due to the presence of unorganized sectors where there is no social recognition. A historical case of Cipher data Inc., reportedly some 50 workers dies a year from layoff reasons in 1986 alone. The same year the company laid off 450 individuals from current services which received horrific response from the society. The government of Singapore following such incidents developed a community service aimed at helping the workers that time, through community help services and programs. The programs and services helped in a great way these individuals cope with their current situations and overcome stress (Elliott, 2012).
Layoffs and plat shut down has been identified to be associated with work distress and leads to unavoidable business costs, according to certain financial specialists. In Singapore this issues has gained immensely prominent as being creating mechanical relations for opportunity seeking fascinated investors. Tripartism has been the key solution to manage divergent issue regarding financial aggressiveness, labor management relations and in developing of the entire country. This strategy of Tripartism has helped achieve Singapore’s social union, monetary versatility and an advantageous position for continued 30 years. The agreement helps in attaining tripartite accomplices by allowing for sensitive adjustments. Singapore National Employers Federation (SNEF), the National Trades Union Congress (NTUC) and Ministry of Manpower (MOM) formed the Singapore Tripartism Forum (STP) for deepening and strengthening of frameworks of Tripartism in order to face current challenges faced and to overcome them (Fashoyin, 2010). The Tripartite Alliance for Fair and Progressive Employment Practices (TAFEP) was formed to have prominent and acceptable business solutions for the overall population. The association formed further extended help to administrators, preparing workshops, admonitory administrations, instructive materials for complying to vocational recruitments. The Tripartite Committee for Low-wage Workers and Inclusive Growth (Tricom) was formed for recommending measures to workers such that they can enhance their job conditions and gauge work amongst low-wage laborers. The body also help identify opportunities for developing money and employment portability for low-wage workers for promotional and low-wage workers.
Asian market is characterized by ongoing issue of plant closing down and layoffs due to current economic conditions and trading environment present. In order to overcome the current situation government Tripartism and workers needs to work together in a professional manner. There needs to be formal liquidation procedure for plants and lying off procedure that can help individuals cope up with pressures. A formal organization needs to be organized which helps laid off employees overcome the mental distress and look for new opportunities.
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