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Careerminds

Reduction in Force Best Practices: What You Need to Know

While not the most pleasant topic of conversation, conducting a reduction in force (RIF) is sometimes a necessary move for a business to make. Whether it's because of the flow of the market or a move meant to align your workforce with your goals, RIFs happen and HR needs to be prepared for when they do.

reduction in force

One of the hardest parts about any layoff or reduction in force is alerting the staff who is affected. To help, we've created an easily customizable termination letter that you can download here:

Download Our Sample Termination Letter Here!

The termination letter is only one part of the reduction in force equation, though. Here's what you need to know:

Why Is the Reduction in Force Occurring?

One of the most important aspects of successfully implementing a reduction in force is to be as transparent as possible with everyone. The employee needs to know why the action is taking place and by employee I mean both the ones being laid off and those that are staying; everyone.

Reduction in Force Best Practices

 Here are the best practices for handing a reduction in force:

  1. Proper Training For Those Delivering The Message
  2. Don’t Ignore Employees That Weren’t Laid Off
  3. Mitigate Your Risks 

 

Like we said above, there is not a one-size-fits-all type of explanation for why a reduction in force might happen. However, here are just a few of the reasons that one might be needed:

  • Economy
  • Sale of company or mergers
  • Technology
  • Over staffing
  • Slow sales or production
  • Bankruptcy
  • Plant closures
  • Relocations

When providing the explanation, include information that the termination is related to budgetary shortages (or whichever reason you have predetermined) and not due to the employee’s performance, personality or any other personal factor and that his/her ability to find another position should not be affected.

reduction in force

Remember to be as clear as possible in this meeting or letter to make sure your employee fully understands your reasoning. After all, they are under a lot of stress right now and just because they are on their way out of the organization doesn't mean you can stop supporting them emotionally.

This leads to the importance of:

Proper Training For Those Delivering the Message Is Key

Can't say it enough: be sure to properly train the individuals who will deliver the message. Prepare a script, regardless of the reason, layoffs or reductions in force (RIFs) are tough meetings to hold and even tougher to keep in check, which is why using a simple, streamlined layoff script is extremely important.

A good script will include tips for how to handle varying responses from the employee to help the you better formulate your response.

Be honest and forthright, as I mentioned above, transparency is one of the most important 'best practices' for conducting a successful reduction in force so be sure to keep that in back of your mind throughout this entire process. It’s also important not to promise that no more position eliminations may occur as there is no way to guarantee what your organization will need in the future.

If you want to offer reassurance to your employees, let them know that at the present time the organization is now structured to meet the needs of the business, that there are currently no plans to eliminate any future positions, and that senior management will continue to evaluate business needs on a regular basis.

reduction in force

However difficult this meeting may be for you, it is tougher for the employee. Do not get onto the topic of your needs, feelings or problems and stray from becoming defensive or feel you must persuade the person that the action is justified.

Just state your case with confidence, this is not the time for a performance appraisal or grievances from the past. It is not helpful to say, “I know how you feel”, each person feels things differently and has a right to do so, simply acknowledge the person’s feelings. You may feel the layoff will be the best thing for the employee but the employee may have a very different reaction. Overall, be sensitive to the feelings and emotions of the employee, both at the time of the termination meeting and in the days to come and remember that it is normal to have to repeat information for the employee during this type of meeting.

If you need to update or create a layoff script, you can download our sample script here:

Download our Layoff Script!

Do Not Ignore the Employees That Are Not Being Laid Off

Keeping positive morale for those employees not affected by the reduction in force is another important best practice for a successful implementation.

One way you can do this is by focusing on being visible. Let your employees see you being active in supporting them, dealing with problems and talking with them about how the transition plan is working. As you move forward through this process, continue to provide information to employees about the company and issues that affect their work setting, again being as transparent as possible. Utilize group or individual meetings as appropriate to develop the new team.

You must keep the line of communication open throughout and beyond this process, don’t assume that people are adjusting and just feeling grateful to still have their jobs.

reduction in force

Practice positive change management leadership that fosters increased communication, more frequent updates, input from staff whenever possible, clarity regarding needed outcomes, permission to stop doing the activities that do not add value (or are not required), and provide opportunities for reward and recognition. Reductions in force are a necessary part of a transforming organization and employees are better able to move forward with an organization and get on board with new initiatives if they understand why decisions to eliminate positions were made.

Mitigate Risk

While this section has the shortest subtitle, it does not mean it is any less important than the others and, from a legal standpoint, it may even be the most important. One way to ensure you are mitigating risk during a reduction in force is by reading, and keeping in mind, state and federal law regulations, especially the Federal WARN act.

Also, as obvious as it may seem, be sure your actions cannot be deemed discriminatory. Keep in mind that the employer’s burden in a wrongful termination or discrimination suit is to demonstrate a “legitimate, non-discriminatory reason for the adverse employment action." If a disproportionate number of potential employees affected by the RIF are members of a protected class – age, race, national origin, sex, gender – the employer needs to re-think the criteria used.

reduction in force

By following the other best practices listed above, especially determining the reason for the reduction in force and sticking to it, it will make it easier to mitigate risk properly.

As always, be sure to document everything, including the reasons for the reduction in force and other alternatives to be considered. Also be sure to not use the RIF as a pretext to terminate an employee that you already view as a problem, those situations should be handled in a different manner. Another important tip to mitigate risk is to make sure you do not lay off more employees than is necessary to accomplish the goal and definitely do not re-hire individuals for positions that have been eliminated by the reduction in force.

Following these best practices should help conducting a reduction in force not only less stressful but successfully implemented as well. For more tips on how to best proceed with developing an outplacement strategy schedule a demo with us today!

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