Dealing with Retrenchment

It has been a tough year for many South Africans due to the effects of Covid-19, with many losing their jobs in the process. The virus has not only threatened our lives but our livelihoods furthermore, its effects will be felt long after it has passed.  

Figures released by Statistics SA in November 2020 showed that the country’s unemployment rate spiked from 23.3% to 30.8% in the third quarter. This is the highest unemployment rate in the country since 2008. 

Retrenchment is an unfortunate situation that you cannot control and, in most cases, has nothing to do with you or your skill, especially during these covid-19 times. You are still capable and marketable and will find another job.  

Below are some tips on how to navigate life after retrenchment.  

  1. Brush up your CV

Now that you are in the job market, it’s time to brush up your resume. Very importantly, you need to include a cover letter to your resume. A cover letter gives you an opportunity to sell yourself to an employer in a narrative way. Your CV will give details of your experience and skills and your cover letter will give you an opportunity to articulate who you are. When it comes to your resume, check the format you’ve used, make sure it is not outdated or it is a format commonly used by many employers and recruiters like PDF or Microsoft Word. Research is important, go online and read up on your field as to avoid using outdated terminology in your resume especially if you’ve been out of the job market for a while. A tip that is always helpful is visiting job portals or career sections of your intended employer and look at the terminology they use to describe certain roles and update your resume according to their jargon. You’ll find that in most cases, different companies use different descriptors for the same roles and the skills required are the same. Don’t make your resume too cluttered, try and keep your resume at least two pages long. Visit some free resume sites online for free templates.  

  1. Apply for Unemployment Insurance Fund (UIF)

To alleviate some of the financial stress you’re feeling, apply for the Unemployment Insurance Fund (UIF); provided you and your employer have been paying into the UIF monthly, the earlier you start this process the better. In most retrenchment cases the retrenched employee will be eligible for twelve months of UIF assistance and for this you will require a formal notice of retrenchment from your employers. There are two ways to apply for UIF, online and going to the Department of Labour branch near you to apply. Visiting a branch has proven to be more effective than online as there are some forms you will be required to submit. It’s better to submit them in person than via email, to put your mind at ease. When visiting a branch, be prepared for long lines, wake up early, wear your mask, bring water and a snack. Should you wish to apply online you will require to have the following: 

  • 13 digit ID number 
  • Email address 
  • Cell phone number

If you opt for visit a Department of Labour branch you will require the following: 

  • ID
  • UI19 form (provided by employer)
  • Salary schedule (provided by employer)
  • Bank form (provided by the Department of Labour)

All forms must be signed and stamped by required parties.  

  1. Inform your credit providers

Contact your credit providers as soon as possible. Unbeknownst to many, some of the loans we have come with insurance to cover us from situations where we cannot earn an income. Find out from your lenders if you have such cover in place to allow you breathing room while you look for new employment. Many credit providers have offered credit relief to people who have been affected by Covid-19 and find themselves temporarily unable to pay back their debts. It’s very important to get in touch and make arrangements as soon as you know of your retrenchment.  

  1. Redesign your budget 

Now that you don’t have a monthly income, structure your budget to reflect all your monthly expenses. Find what you can pay off with the money that you have and remove from your list responsibilities. Cancel subscriptions you can live without, the small amounts add up and use more money that could help you elsewhere. The first month is an adjusting month so don’t be too hard on yourself, keep on working on your budget on a monthly basis until you find a rhythm. Make projections for yourself based on how long you think your current finances will carry you while looking for a new job. As stressful as this may be, it’s important to plan ahead. Read here for tips on how to save money <<link to saving article under business>>

  1. Turn your hobby into a business

While you’re still looking for a job, consider starting your own business. A lot of people fear starting a business because they don’t have capital. However, some businesses can be started with little or no capital at all. Do some research, see how you can turn your hobby or talent into a business opportunity. For example, if you enjoy cleaning, offer these services to friends and family first to start you off for a fee and then expand. Not all our hobbies can be turned into a business however we will never know until we research and then try.  Find an entrepreneur and ask for guidance on how to get started, and what the best practices are to starting your own business.  

In June of 2020, B Mavundza observed that “Although the lockdown restrictions are starting to ease, the pandemic continues to create major economic and financial distress for the South African economy and consumers alike,”  

It is for this reason that we encourage our readers to constantly find ways to manage their finances. Due to household income shortfalls it is advised that working together to ease the financial pressures in the household will assist in stretching the income coming in.