Published on March 16, 2011
WHITE PAPER: THE COMPLETE RIF CHECKLIST: BEFORE, DURING AND AFTER A RIFThe Complete RIFChecklistBefore, During And After A RIFSEPTEMBER 2009By Tim Weyland,Director of Human Capital Consulting
The Complete RIF Checklist: Before, During And After A RIF www.trinet.comWhat does my business I. Prepare adequatelywant 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?2
The Complete RIF Checklist: Before, During And After A RIF www.trinet.comBe able to explain 4. Minimize the riskyour 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. 3
The Complete RIF Checklist: Before, During And After A RIF www.trinet.comDefine a start and an II. Conduct it efficientlyend 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.4
The Complete RIF Checklist: Before, During And After A RIF www.trinet.comPresent a consistent III. Deal with the aftermath humanelyand unambiguous After the reduction is conducted, the main task is to marshal your forces andmessage. 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. 5
About TriNetTriNet helps small business entrepreneurs realize their ambitions by being theiressential HR partner. As their Trusted Advisor, we help them contain HR costs,minimize employer-related risk, and relieve the administrative burden of HR, thushelping them focus on their number one priority—their business.For more information, visit www.trinet.com.DisclaimerThe contents of this white paper have been prepared for educational and information purposes only. The content does not provide legal advice or legalopinions on any specific matters. Transmission of this information is not intended to create, and receipt does not constitute, a lawyer-client relationshipbetween TriNet, the author(s), or the publishers and you. You should not act or refrain from acting on any legal matter based on the content withoutseeking professional counsel.Copyright © 2009 TriNet. All rights reserved. All trademarks, trade names, service marks and logos referenced herein belong to their respective companies. ID: a046000000qf1qv
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