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What Does "Reduction in Force" Mean?

09 April
by Josh Hrala
2 minute read

Human resources is full of weird sounding buzzwords that seem like they mean one thing and end up meaning another or - even if they truly mean what they logical appear to - the true definition is lost thanks to misuse.

what does reduction in force mean?

For example, workforce planning - the act of aligning your talent with your business goals - has come to basically mean “layoffs are imminent.” While this can be true, workforce planning is merely a strategy that helps you figure out if you have the right people doing the right job. This could include changing people’s roles to fit their talents, hiring new employees or many other things. However, since it has to do with jobs and performance, it means layoffs to many people.

The good news is that there are a lot of straight forward terms, too. And reduction in force - commonly called a RIF - is one of them.

What Does Reduction in Force (RIF) Mean?

A reduction in force (RIF) is when an employee is let go from a company due to budgetary reasons, workforce planning initiatives, position eliminations or other right-sizing events. Reductions in force are typically permanent because the roles of those let go are usually eliminated with the termination of employment.

 

Basically, a RIF is when a company holds a permanent layoff event where it is highly unlikely that the employees let go will be ‘recalled’ by the organization. This is largely due to the fact that the position in which the employee worked has been eliminated in an effort to right-size or restructure the organization as a whole.

By eliminating positions, the organization can maintain a proper budget and staff level to succeed with their goals. A lot of the time, RIFs happen because there are redundancies from a merger or acquisition, or because the company’s overall strategy has changed and made some positions no longer desirable.

Either way, you have to consider the difference between a RIF and a layoff. While most people tend to lump these two things together, they are quite different. A layoff, for example, suggests that the let go employee has the potential to get rehired once finances or the new strategy is in place. With a RIF, though, it’s understood that there is no option for rehire.

“In the past, layoffs typically came with an expectation that the employee might be rehired, if more work became available or if the employer’s financial condition improved,” reports Sachi Barreiro, an attorney from the University of San Francisco School of Law, for Lawyer.Com.

“A reduction-in-force, on the hand, did not come with such an expectation. An RIF usually meant that a certain job, or even an entire department, was being eliminated.”

While the result is the same, typically, for the individual - they are let go from their current position and will likely land a new job elsewhere regardless of what the event is classified as - it’s important to remember this difference for legal reason and also for when your company may need to hold such an event in the future.

Want to learn more about RIFs and how to conduct them? Check out our free guide here:

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