TL;DR – Five things and a cautionary tale is told.
We were quite outraged about what’s happening in SPH. But don’t get us wrong. We aren’t saying that SPH must not retrench any of its staff. We are outraged at the way it’s carried out. In fact, we think soul-searching about where SPH wants to take its core business and some consolidation should have taken place earlier.
Here are five things we’ve learnt from various sources about the SPH retrenchment exercise.
1. Core business not doing well
One common criticism we have heard against SPH is why the need to retrench staff given that there is an increase in profits.
Yes, SPH’s net Q4 profits did go up by 32% to $350.09m compared to a year ago. However, that is due to the gain of $150m it made from selling its 33.3% stake in 701Search and a $57m fair value change on Clementi Mall and Paragon. These are gains in SPH’s non-core businesses.
In contrast, its core net profit fell 15%. The drop in profit from SPH’s core businesses follows a four-year trend.
Over this four-year period, profits from SPH’s core businesses have fallen a total of 30%.
But did you think think manpower costs in SPH’s core business also also fell by 30%? Nope, that is not the case. Manpower costs in SPH’s core business had fallen by about 3% in the last few years.
2. SPH was quite inefficient in its use of manpower
One reason that manpower costs in SPH’s core business have stayed high despite a drop in business is because SPH had been quite inefficient in its use of manpower. Each publication has its own set of reporters and photographers and all. And when something happens that requires coverage, all the papers will send their own reporters and photographers.
So, if a cat’s fallen onto a ledge or gets caught inside a letterbox, you’ll have three to four teams of reporters and photographers from SPH covering and taking photos of the same cat. Likewise for a burst water-pipe or when a Singaporean wins an Olympic Gold.
3. Restructuring for increased productivity
We reckon what happened was that the current CEO and management staff had taken a cold, hard and honest look at their existing model and operations to see what areas they need to restructure to increase labour productivity. It’s only natural that they would look into reducing duplication in efforts.
So moving forward, they could reduce manpower and send just one team of reporters and photographers and come back with a main storyboard. Then the different publications can take that and adapt it to suit their readers.
Further, increased use of technology will only translate to automation or online self-service modes for some parts of the business. Again, manpower redundancy can be thus expected.
4. Those affected should have seen it coming
If you are in the newsroom, and you realise that you are duplicating work that someone else is doing, then alarm bells should start ringing. Or if industry trends start to shift, like the transfer of ad spending to Google and facebook, the people working in traditional media sales should be worried too.
Yet, from what we’ve heard and read, there have been people in the exact situations we’ve just described who were surprised that they were retrenched. How can that be? Besides, it ain’t news that SPH is carrying out a retrenchment exercise. They had announced it last October. Why did these people not think it might be them?
If they aren’t bringing the required value to the company, surely they should start worrying about their jobs and be prepared that they might be let go. Especially if they also aren’t picking up new skills that allow them to be redeployed to other growth areas.
5. Retrenchment package useful to help cushion effect
To be fair, SPH appears willing to pay retrenchment benefits. We heard it’s to the tune of one month’s pay for each year of service.
Let’s say you have worked for SPH for 20 years. You will get 20 months of salary. Let’s say you used to earn a monthly salary of $5,000. That means you will get a lump sum of $100,000. That’s not bad.
On top of that, we understand from sources that retrenched staff will also receive retraining grants. Also, the Creative Media and Publishing Union (CMPU) and the Employment and Employability Institute (e2i) are also on hand to offer help and support.
Lessons from this incident
This incident should be a cautionary tale for those of us who are employees. If our work is duplicating someone else’s work, or we see our workload dropping drastically, we should start trying our best to increase the value we bring to our company. Do start learning new skills. Start preparing. And start now.
And oh, one more thing. Stay alert to developments in your industry and also in adjacent industries.
Remember, agility and adaptability are the game-changers.