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RIF: The Ultimate Guide to Holding a Reduction in Force

5 minute read

Are plans underway to downsize your organization using a reduction in force (RIF)? Maybe your company is going through an economic crisis, facing a change in management, or merging with another company. Whatever the reason for downsizing, successfully planning and implementing a reduction in force keep your company back on track.

But how does a reduction in force work exactly? And are there any reduction in force guidelines that you should be wary of when conducting an event? After all, planning and conducting a reduction in force isn’t something you want to take lightly. One wrong turn and it could all turn sour.

Luckily, with the right amount of preparation, this can be avoided.

Here's how to prepare a seamless RIF process that can offboard your staff members with as little stress as possible.

Download our reduction in force checklist here. 

Let’s get started with the basics.

Step One: Define Objectives and Make a Rough Plan

Set things into motion by defining your objectives. What do you hope to achieve by implementing a reduction in force? The likely answer is that you see downsizing as a means to an end. In order to achieve this goal, you should work with management teams to develop a rough reduction in force plan. This is a great starting point for any kind of downsizing.

This first draft version of your reduction in force plan should look into why you are implementing an RIF, how the RIF will help you reach objectives, uncover possible problems along the way, and determine who the RIF will affect.

reduction in force

While this seems obvious, RIFs - and offboarding in general - can be ignored by many organizations because these times are generally rough for many different departments. However, you need to make sure you not leaving any stone unturned to make sure you have given every step of the RIF process a once over to ensure everything goes down smoothly.

Here are the key questions you should answer in your initial reduction in force plan:

  • What do you hope to achieve? Agree on business milestones and goals.
  • What problems are you looking to solve? List all the problems that are obstructing your business processes at the moment.
  • Is now the right time for downsizing? Establish a timeline for beginning the RIF process.
  • What positions will be impacted by the RIF? Consider location, departments, teams, and roles.
  • Which employee groups will be affected? Be mindful of protected classes and employment discrimination.

Additionally, you want to consider how the RIF process will impact your public image and employer brand. Namely, what do other businesses, partners, employees, and consumers have to say about your decision to downsize. Public opinion matters so devote some time to optimizing your PR strategy.

Step Two: Devise an Actual Foolproof Plan

Now that you have a basic plan, it’s time to really get down to the nitty-gritty of planning a reduction in force. Here are the key areas of the RIF process you should focus on when drawing up a final, foolproof reduction in force plan.

First, you need to finalize which employees will have to go, decide who will communicate the RIF to employees, consider alternative solutions, create an RIF timeline, think about how downsizing will affect remaining employees, and map out potential problems.

Quick tip: Using a script to communicate the reduction in force is the best way to ensure consistency, transparency, and keep everyone happy.

Download Our Layoff Script Here!

Next, you need to see if you need to take any additional budgetary measures like bonus cancellation or hiring freeze.

Finally, put pen to paper and run your reduction in force plan by your legal counsel. There are a ton of rules that you need to abide with. One wrong move and you could be in big legal trouble. You need ensure that you are following all local, state, and federal laws when conducting any reduction event. This is where you legal counsel comes into play. We are not lawyers!

Here’s a quick recap of what you should focus on at this stage of the RIF process:

  • Alternative solutions. Consider some RIF alternatives like furloughs, overtime limits, and salary reductions. Learn more about those here.
  • Employee selection. Lock down the method you will be using to decide who goes. For instance, seniority-based, status-based, or skill-based selection.
  • Communication. Use a script to communicate the reduction in force to management teams and employees.
  • Risk mitigation. Consult a lawyer before conducting a reduction in force to avoid any kind of workplace discrimination.
  • Reduction in force timeline. Stay on track with your RIF by setting milestones like notifying executives and employees, delivering notification letters, and offering services like outplacement.

reduction in force

Step Three: Enforce the Reduction in Force (RIF)

Well done, you’ve successfully passed the initial planning stages of the reduction in force process.

Now comes the moment of truth: putting your reduction in force plan into action. Notify employees about their impending termination of employment via a formal, written notice. Clearly provide the reason for the layoff, inform them about their employee rights, and acknowledge their contribution to the organization.

After employees receive their reduction in force letter, coordinate a meeting to avoid the spreading of rumors and disinformation.

Here are some tips to conduct a successful reduction in force notification meeting:

  • Get to the point and don’t over-explain trivial details.
  • Expect questions and be ready to answer them.
  • Be sensitive and show support towards the employee.
  • Prepare yourself for different scenarios and emotional reactions.
  • Remain firm to show that the decision is final and non-negotiable.
  • Keep calm at all times regardless of provocations.

When implementing a reduction in force, make sure to follow reduction in force best practices. Doing so will make the entire RIF process much easier on everyone involved.

reduction in force

Step Four: Outplacement and Other Benefit Packages

The final stage of implementing a reduction in force is offering employee benefit packages. You might be wondering why this step is even necessary. Isn’t the whole point of downsizing to cut costs and save money? If you want your business to thrive, then no, this is not what downsizing is all about.

Offering a range of benefits and services that will ease the transition of departing employee is extremely important. This can include anything from outplacement services and severance pay, to health insurance and pension plans.

Keep in mind that outplacement services and other employee benefits are not simply a tool to get employees to accept the RIF. But rather, it’s an effective strategy to retain talent and keep your employer brand afloat during company downsizing.

Who wouldn’t want to work for – or with – a company that always has their employees’ best interests in minds, even when they are terminating their employment?

Want to know more about announcing a RIF? Download our letter guide here:

You can download our reduction in force letter here.

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