Prepare for and Manage a Reduction in Force

Posted by: Rod Kurtz on April 21, 2009

If the current economic downturn has made a reduction in force (RIF) necessary for your small business, it is important to prepare for it adequately, conduct it efficiently, and then deal with the aftermath humanely. Here are some steps to ensure your RIF goes smoothly:

1. Clarify your business goals. Ask yourself: What do I want to achieve overall, and will this move help me toward that end?

2. Determine the criteria for selection and clarify the process for decision-making regarding "the list." This process of selection needs to be done in a constructive manner, or it can have an adverse impact on your organization. The process should be consistent and nondiscriminatory.

3. Minimize the risk.Pay particular attention to protected classes as defined by the law.

4. Think of the contingencies. Your people are leaving but the work remains. 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?

5. Lessen the pain for those leaving.

Provide outplacement services whenever possible, and try to ease the transition through some kind of severance package.

6. 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.

As you go through the actual RIF, three steps are important:

1. Balance both respect and security. The process should be as humane as possible while protecting the interests of your organization.

2. Define and communicate a clear start and end. Clarify the start and end points of the RIF in order to allay fears and keep morale as high as possible under the circumstances.

3. Execute the plan flawlessly. Everything has to be well-orchestrated, including having a timeline for all activities, someone in charge of each step, and escalation/security procedures.

Tim Weyland
Director of Human Capital Consulting
TriNet
San Leandro, Calif.

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