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.


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.


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.

The Training page of 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 programs;
  • Building a diverse workplace; and
  • Industry led arrangements for Training Packages.

If you want to talk to somebody about the options available to you, you can call at 13 28 46. To contact experts, visit their Contact us page.

Your Career

Your Career 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.

Fringe Benefits Tax (FBT) exemption

There is an exemption from the Fringe Benefits Tax (FBT) for employers providing retraining and reskilling, for employees who are redeployed to a different role within the business.

Currently, FBT is payable if an employer provides training to its employees that is not sufficiently connected to their current employment. By removing FBT, employers are encouraged to help workers transition to new employment opportunities within their business.

Speak to your financial advisor to find out more about the FBT exemption and how it might help your business.