VSS

Laid off, made redundant, retrenched, delivered, planned retrenchment, optional resignation packages and voluntary separation scheme (VSS) are all fancy words to take away the negative effect of an employee’s most dreaded fear of hearing those three magic words “ You are fired” (Roch, 2001).

Workforce reductions can range from being forceful in nature (retrenchment) to milder approaches such as resignation incentives and job sharing (Sutton & Aunno, 1989). However, Hollet (2000) classified three forms of workforce reduction and these are:

1. Voluntary Early Retirement (VER) in which employees nearing the age of retirement are offered incentives to retire,
2. Involuntary Separation in which positions are eliminated, forcing employees to depart at the company’s discretion,
3. Voluntary Separation Scheme (VSS) in which employees of any age or level can be offered incentives to leave.

Since the 1980s, about 10 million jobs have been eliminated in an effort to reduce costs and improve performance (Turner, 2000). This trend is expected to grow in the near future as there is a lot of uncertainty in the global economy due to recent outbreaks of war and violence in many parts of the world.

At the local front, the Malaysian economy, which has been one of the fastest growing economies in South East Asia since 1987, has seen some dramatic downturn in 1998, which in turn led to the collapse of the Malaysian economy due to the impact of the East Asian Financial Crisis. Retrenchment then was the order of the day by a number of companies. The Malaysian government changed its policies on retrenchment because of this economic crisis.

The recent merger exercise by the banks in the year 2001, shed about 10 to 15% of its workforce by effecting the VSS. (Hamisah Hamid, 2001). Most of those who opted for the VSS scheme were clerical staff as when the branches closed the staff most likely affected are the tellers.

Data from the Ministry of Human Resources, Malaysia (http://www.mohr.gov.my/) revealed that there were about 13,920 workers who were retrenched in the year 2000, of which 50% was through the VSS. In 2001, there were 28,801 employees who were retrenched whereas in 2002, 26,452 employees were retrenched. For the first half of 2004, there were 12,765 employees who have been retrenched. These are only figures from official sources and the figures might be higher if the unofficial figures are added to it. Again it would be safe to assume that of these 50% would have been through the VSS. It is interesting to note that whilst the Malaysian Trades Union Congress (MTUC), an umbrella body for Trade Unions in Malaysia, regards VSS as “a fashionable form of retrenchment” and warns banks using the VSS not to victimize employees. Some employers are still inclined to use VSS because it gives them the option of accepting or rejecting a worker’s application (New Straits Times, August 2001).

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I'm one of them. And i'm looking for job now.