Checklist for managing a reduction in force

1. WHITE PAPER: THE COMPLETE RIF CHECKLIST: BEFORE, DURING AND AFTER A RIF
The Complete RIF
Checklist
Before, During And After A RIF
SEPTEMBER 2009
By Tim Weyland,
Director of Human Capital Consulting

2. The Complete RIF Checklist: Before, During And After A RIF www.trinet.com
What does my business I. Prepare adequately
want to achieve overall? Preparations and logistics should be mapped out beforehand in order to implement
the RIF as quickly and humanely as possible. At the planning stage, you should:
1. Clarify your business goals
Ask yourself: what does my business want to achieve overall, and will this move help
me towards that end? It seems that in current economic times, many companies
choose to implement RIFs without first considering whether there are other, better
alternatives. Some other options could include deferred compensation, reductions
in hours or pay, mandatory time off, sabbaticals, and job sharing. Part of the reason
organizations implement a RIF is to preserve cash. There are other alternatives to
achieve that goal. Take note though that there are various legal restrictions on the
exact aspects of these suggestions, so check them out before proceeding.
2. Determine the criteria for selection
Once it’s determined that a RIF is indeed needed, then you must determine the
criteria for selection. The business goals should be used to clarify the criteria for
selecting people.
You have to select the right people but you also want to select the right number of
people — you do not want death by a thousand cuts; you want to complete the RIF
the first time out. Hardly anyone says they cut too much–usually it’s that they didn’t
cut enough.
3. Clarify the process for decision making regarding “the list”
This process of selection then needs to be done in a constructive manner, or it can
have an adverse impact on your organization. The process should be consistent and
non-discriminatory.
Goals and criteria will determine the list, but how will the process play out? What
happens in each step? What’s the timeline? And, who owns the key decisions?
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Be able to explain 4. Minimize the risk
your criteria. No matter what the rationale, people are not going to be happy to be out of work,
so you need to work to minimize the risk of lawsuits. For example, reductions that
appear to be carried out based on any type of protected class are a surefire invitation
for litigation.
This is where it is important to do an Adverse Impact Analysis to see if you’re laying
off more of a certain protected class, such as women, minorities, and the 40+
population. The results of this analysis may not necessarily change your decisions,
but you should go into it with your eyes open and be able to explain your criteria.
If you’re eliminating a function, region, or business unit, things are much simpler.
When you’re selecting individuals from across the organization, then the criteria is
much more important.
5. Think of the contingencies
Your people are leaving but the work remains. How do you transition their workload
to other people? How do you maintain your intellectual property when some of it
may be walking out the door? How do you transfer work to the right places?
6. Lessen the pain for those leaving
It’s worth a little bit of cost to do two things to ease the pain for your workers who will
be laid off. First, and probably the best thing you can do for them, is to help them find
jobs. Provide outplacement services whenever possible. Second, ease the transition
through some kind of severance package, if that can be done. Consult your legal
counsel about the possibility of obtaining signed separation and release agreements
in connection with any severance package payments. Remember that various legal
requirements may apply to such agreements, so you do need to involve your lawyer.
7. Make the plan comprehensive
Have a detailed plan and implement it without error. This includes the training of
those involved in the reduction, plus all the logistics of facilities, physical security, IT,
and more.
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4. The Complete RIF Checklist: Before, During And After A RIF www.trinet.com
Define a start and an II. Conduct it efficiently
end point of the RIF As you go through the actual RIF, there are really only three steps. You need to:
1. Balance both respect and security.
You have respect for the people in your organization the day before the RIF, you
should respect them as the reduction is being processed, and you should respect
them even as they leave. But you also have to balance this respect with safety and
security for the organization and for those that are left. You don’t want to jeopardize
your assets — particularly the intellectual property of the business.
2. Define and communicate a clear start and end.
In any organization going through a RIF, there will be rumors flying around like
wildfire. It is best to clarify the start and end points of the RIF in order to allay fears
and keep morale as high as possible under the circumstances. It might make people
nervous for a little while as the process is carried out, but once the “all clear” is
sounded, there should be a feeling that the ordeal is over and the people who remain
are fine.
3. Execute the plan flawlessly.
Everything has to be well-orchestrated. Take the process of a manager informing
a laid-off worker of the RIF. That action must include an HR professional or at least
another experienced manager in the same room. Most importantly, there should be
a script that is followed as closely as possible.
These are details that have to be managed completely:
• the timeline of all activities
• who are in charge of each step
• the escalation process, and
• the security procedures.
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Present a consistent III. Deal with the aftermath humanely
and unambiguous After the reduction is conducted, the main task is to marshal your forces and
message. motivate the remaining workforce. In order to accomplish this, you need to:
1. Implement the communication plan.
There has to be a process in place for communicating with outside organizations,
customers, vendors — as well as with the internal staff. People need to know how to
do their work and whom they are still working with. The Communication Plan covers
all of this using verbiage that has been prepared in advance in order to present a
consistent and unambiguous message.
In the communications sent out after the RIF, be very clear about why it was done.
Explain the situation. Honesty here is the best policy. You need to provide honest
feedback about state of the business; otherwise, you run the risk of losing more
people.
2. Be sensitive to emotions.
In almost all cases, productivity goes down, so manage the people who are left
and understand that they will have natural reactions. Realize that losing former
colleagues is a big blow to morale, and help people move on but also be sensitive to
their heightened emotions.
3. Pay attention to your key players.
As a result of reductions, turnover goes up, especially with high performing
employees. This might be different in these economic times, where it is harder to
find employment, but the fact remains that people might want to leave. You need to
pay attention to that trend, and focus particularly on your key players – those who
are critical to your organization, those you want to keep.
Six Common Mistakes in a RIF:
1. Not being clear about business goals. Consider a RIF only if it fully realizes
your business goals.
2. Not having any clear criteria for selection.
3. Not paying attention to adverse impact and doing it “blind.”
4. Not doing anything in terms of follow up (i.e. outplacement or severance).
5. Not ensuring that managers stick to the script. There is no correct answer
when someone asks “why me,” so be prepared to deal with that and stick to
what you can and cannot say.
6. Doing a RIF disrespectfully. You’re dealing with people and each person is
worthy of respect.
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