Done correctly, a Reduction-in-Force (RIF) is an opportunity for a company to show compassion, corporate and fiscal responsibility and, in a word, class. Done poorly, brand integrity, community goodwill, and employee loyalty can be lost and permanently damaged. The corporate values that a company has worked hard to create and live by become questioned, suspect, or hollow.
The risks of having a sub-optimal approach can have lasting negative effects on the surrounding community and the employees' view of the company. There are many common pitfalls that are easily remedied with proactive planning, training, and well-coordinated cross functional execution. The three overarching goals of a RIF are to create a more effective organization, operate in a more fiscally-responsible manner, and treat employees with dignity and respect.
A common mistake is implementing uncoordinated reductions at varying times across the organization that result in internal paralysis. Employees wait for "the other shoe to drop" especially if the organization conducts these events in "radio silence" without acknowledging the pain and loss, explaining the rationale behind the event, or reiterating company objectives.
It is key to have a well-researched and methodical approach to create the components of the severance package. A common approach ensures fiscal predictability and consistency in the treatment of employees. This is not to say that a package should always be based on the same calculations, rather, that a consistent philosophy be applied that is in line with the core identity of the company.
There are a number of opportunities that a company has with respect to non-financial support of exiting employees. One example is using internal recruiters for "reverse recruiting" services. This tends to work especially well since it is common for recruiters to personally know some of the affected individuals. Recruiter workload decreases during times of downsizing so these activities create minimal disruption.
With the right tools and resources, the HR, Finance, Legal, PR, Corporate Communications, and Facilities departments can implement coordinated leading practice RIF preparation and execution.
Finally, a thoughtful strategy for dealing with remaining employees who frequently experience "survivor" syndrome can enable the organization to get back on track quickly, resume normal or increased effectiveness, and ensure renewed commitment.
