How to Properly Plan a Reduction In Force
Estimated reading time: 4 minutes
By now, we’ve all seen the news story about the CEO who fired 900 employees via a Zoom call. He took a “leave of absence” for a few months. But the company is back in the news for another round of layoffs, this time they’re cutting about 3,000 jobs. I’m not looking to rehash these stories, but it did remind me that there are many factors that an organization needs to consider when making workforce decisions like this one. So, I wanted to share a few of them.
First of all, it’s important to understand that regardless of the reason a person is leaving your organization: resignation, firing, layoff, reduction in force (RIF), etc., they deserve to be treated with respect. The organization might not be happy the employee is choosing to leave. The employee might not like the company’s decision to end their employment. But that doesn’t mean a person deserves to be treated with disrespect. Remembering to treat departing employees with respect drives the rest of the process.
Secondly, if the organization is initiating this conversation, then they need to understand what action they’re taking. For example, a furlough is when the organization imposes a mandatory leave of absence or reduced work schedule. A layoff is when the employee is separated from the company, but there’s a reason to believe at some point in the future, the employee will be recalled (i.e., asked back). A reduction in force is when the employee is separated from the company with no intention of being recalled. How the employee’s departure is categorized can impact things like unemployment claims. It can also impact how an employee plans their next career move.
Third, get your employment attorney involved. This is definitely one of those moments when you do not want to figure that you can save a couple of dollars and not consult legal counsel. Your attorney can be a sounding board when making decisions about who will be impacted, the best way to communicate the decision, and the legalities associated with finalizing a person’s time with the organization. There are laws that could be involved like the Older Worker Benefit Protection Act (OWBPA) or the Worker Adjustment and Retraining Notification (WARN) Act. Plus, every state has unique laws about when final paychecks must be issued.
Also get your executive team involved. I have actually seen situations where the CEO communicated a layoff then told their executive team. Not good for many reasons. HR should play an integral role in the planning of this event. Accounting will need to know about final paychecks. IT will need to know about computer access. Marketing might want to monitor the organization’s brand channels. And operations still needs to get the work done. There’s one other topic the executive team should discuss and that’s how the organization plans to assist departing employees – severance, outplacement, etc. Not only is this good for the employees who are departing, but it’s good for the employees who are staying to see that their colleagues are getting treated with the respect they deserve.
Now, put together a communication plan. The organization need to decide who is going to communicate the message. The CEO is a logical choice. Sometimes the CEO keeps their message at a high level about changes that will happen then the employee’s manager and HR deliver the specifics. There should be conversations with people leaving the company and discussions with employees who are staying. This isn’t a “no news is good news” moment. Expect people to react emotionally. If managers haven’t ever received training on handling emotional situations, think about how to support them. And think about the employee reaction if a manager is departing.
Finally, plan some checkins with the current workforce. Employees are going to naturally wonder, “Am I next?” The organization needs to provide the appropriate assurances. Don’t say, “There will be no more layoffs.” if you don’t know that for sure. Be prepared to let employees vent and vent a little yourself. Then be prepared to move forward.
Planning any type of workforce reduction is stressful. This is just a high-level overview of what needs to happen. There are so many details. Organizations should get the right people involved, consider all of the options, and communicate to everyone. It’s not the employees’ fault that the organization is doing a layoff or reduction in force. The organization needs to remember that and plan their actions accordingly.
Image captured by Sharlyn Lauby at the SHRM Annual Conference in Las Vegas, NV
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