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Alternatives to retrenchment

Retrenchment can have hidden costs, such as higher labour turnover, risk to your brand and the cost of recruiting, hiring and training new people. Retraining or restructuring your existing workforce can be a cheaper and more effective strategy than retrenchment. Find out about the Government incentives such as the Skills Checkpoint and the Skills and Training Incentive (SaTI) to keep your business running and your staff employed.

If the future of your business is uncertain, retrenching staff might be the only course of action available to you. However, if you are looking at retrenching staff to lower costs or because the operation of your business is changing, other options are available. Retaining and retraining staff instead can be cheaper and more beneficial to your business beyond the short term.

Restructure

Your current workforce may have hidden potential. Try to get a good understanding of what skills your current employees have – they may apply to other roles in the business. Redeploying your staff into other areas of your business instead of retrenching them has many potential benefits:

  • Saving a significant amount of money in payouts;
  • Retaining key employees, whose skills and experience are very valuable in the event of a sudden industry downturn;
  • Preventing falls in productivity due to new and inexperienced staff; and
  • Preventing the cost of hiring and training a new person in the future.

Restructure can also mean considering other kinds of work patterns for your employees, such as shorter working weeks, flexible working arrangements or temporary lay-offs. All of these options can help to keep your business running with the best possible staff without having to commit to retrenchments.

More information about redeployment due to changes in operational requirements can be found at the Fair Work Commission website.

Retraining

If you are looking to redeploy your staff into other areas of the business, you will need to consider the skills and training that they currently have, and what they will need to do a new job. There are a number of programs and resources available to you to help your staff boost their qualifications and meet your business needs.

Offering training to your employees helps them feel motivated and valued, and it adds valuable skills to your organisation. Raising the skills and qualifications of your employees provides long-term competitive advantages for your business and helps to fill gaps in the capabilities of your workforce.

Communicating with your staff is key. Encourage them to talk to you about the skills they have and what skills they might like to develop. For more information about identifying and updating skills, see Get some training.

You’ll find information about Government assistance and programs to help you below.

Business.gov.au

The Training page of business.gov.au is a comprehensive guide to why and how you can provide training to your staff. Topics include:

  • Identifying your skill needs;
  • Exploring your training options;
  • Finding skills funding and programmes;
  • Building a diverse workplace; and
  • Industry led arrangements for Training Packages.

For these topics and others, go to Managing and developing staff - Training.

If you want to talk to somebody about the options available to you, you can call business.gov.au at 13 28 46. You can also email them at the Contact us page and completing the web form.

Skills and Training Incentive (SaTI)

The new Skills and Training Incentive assists older Australians to update their skills and stay in the workforce.

The incentive provides your business with up to $2,200 (GST inclusive) to fund training to help your employees build skills to remain in the workforce longer. The Skills and Training Incentive is directly linked to the Skills Checkpoint Program.

Either your business or your employee must match the incentive to ensure a joint investment in your skills development. More information can be found online at the Skills and Training Incentive page.

Skills Checkpoint for Older Workers program (Department of Education)

The Skills Checkpoint for Older Workers program provides support to workers aged 45-70 who are at risk of losing their job. They can get advice on how to use their existing skills to gain new jobs or help them identify what skills and training they may need to do another job in your business.

For more information, go to the Skills Checkpoint for Older Workers Program page. The Department of Education and Training administers this program.

MySkills

My Skills can help you find the right qualifications for your staff. You can search for VET qualifications and compare information such as fees, duration, graduate satisfaction, job prospects and available subsidies.