Planning for a (Less Messy) Reduction in Force

OK - you’re not going to Elon this. (We imagine you’re up to date on the news here, but if not, check out Musk’s takeover of Twitter for everything not to do if you’re planning for a reduction in force in the coming months.) But if you, like so many big tech companies of the moment, are going to need to relinquish workers, you are likely not relishing the task, and you're bound to have questions.

First, a quick vocabulary lesson. Reduction in force, or RIF, is when you let an employee go with no plan to rehire them, likely because their job has become obsolete. This is different than a layoff, where you ask an employee to leave in the short-term with a plan to have them return - a common practice at the height of the pandemic. A furlough, meanwhile is when your organization imposes a mandatory leave of absence or reduced work schedule for some workers. Make sure you're clear on what action you're taking and why you need to take it!

Here’s What To Consider BEFORE You RIF

Are You Sure?

OK, you may be sure you need to reduce your workforce, but do you need to do so with a mass firing? A voluntary attrition or resignation program can be a viable alternative to forced reduction in force. To consider whether this is the best course of action for your organization, ask yourself (or your financial team) about the availability of incentives for participation, the realistic time constraints on your need, and other business-specific conditions that would impact this friendlier alternative. It's often fine, by the way, to deny resignation buy-in from mission-critical employees.

Make it a Team Effort

Don't make an executive decision without ensuring the right people are involved. You can't engage in a reduction in force without your HR team on board, who will heavily support with planning. You need your accounting team to know about issuing final paychecks, and your IT folks to be aware of computer access and technology return. Put another way: even if you're reducing your workforce, you need to strategically use those who are remaining.

Determine What You Will and Won’t Provide

How will you - or won't you - assist departing employees? This will vary enormously, but you want to make sure you and your executive team are clear on what's next from here. Will your organization cover COBRA? Assist with outplacement? Pay a severance? Having a plan to support departing employees is good for them, and also good for their colleagues who are staying and who will see their fellow employees being treated respectfully at a challenging time.

Don’t Discriminate

Before you implement a RIF, you must engage in a review process of who you're planning to terminate to ensure that you're not disproportionately hitting certain groups, such as older employees, people with disabilities, or any other federally protected group. This doesn't have to be a complicated process, but you do need to do due diligence to ensure you're not being discriminatory.

Consider WARN and Similar State Mandates

We talked about RIFs being a team effort, and perhaps the most important member of that team is a legal one. They will be able to support you with understanding different federal laws like The Worker Adjustment and Retraining Notification (WARN) Act, designed to provide workers with sufficient time to prepare for transitioning between jobs. There are comparable state mandates that also provide time limits and notice requirements for group termination programs.

Be Clear to Boost Morale

Ensure you have a straightforward plan for communication and act as quickly as you can once you start the process. (No, the Musk-ian emailed firings aren’t going to cut it.) Talk to employees who are staying as well as those who are being asked to leave so that all have a chance to voice concerns and feel seen. Know that people will be concerned about their jobs and whether they are next on the list and allow them to be heard, but do not offer false assurances if you're not sure if more layoffs will follow.

Let Us Help!

Facing a RIF? (Or a round of layoffs or furloughs?) Need help sorting through your state-specific laws, or determining a reduction package? Agile Talent Consulting can help support you with a realistic, well-concepted RIF plan.