Reduction in Force Guidelines: What HR Needs to Know

Are you in a bit of a reduction in force pickle? With so many rules, regulations, and etiquette to bear in mind, it’s really no wonder why so many HR professionals get lost in the process. Thankfully – for you and yours truly – there are certain reduction in force guidelines that every HR professional should know.

We’ve separated the wheat from the chaff for you when it comes to what works during layoffs (and RIFs) and what doesn’t. This will save you a lot of unnecessary headaches down the line.

Ready to get started?

Let’s dive right it.

Before you decide to enact a reduction in force it’s advisable to first consider alternatives to RIFs. In fact, you should treat a RIF as a last-ditch effort when all other alternatives fail to meet your business goals.

And since RIFs are generally initiated because of budgetary reasons, workforce planning initiatives, position eliminations or other right-sizing events, there are various alternatives to RIFs that you may want to look into. Here are some worth considering:

• Cross-training. Can you find other opportunities within your organization where employees can easily transfer their skills and knowledge?
• Hiring halt. Will freezing new hires help mitigate over-staffing, budgetary, and other HR problems?
• Overtime limits. Have you tried putting a cap on overtime or eliminating it completely?
• Employee furloughs. Can implementing an employee furlough help lessen the financial strain on your organization?
• Salary reductions. Are pay cuts a viable option and will employees be willing to accept such measures as an alternative to RIF?

Can any of these alternatives to RIFs solve your organization’s problem? If yes, then you might be able to avoid the reduction in force process altogether. If not, it’s time to apply your reduction in force policy.

The first step: looking for redundancies.

The first thing you need to do when considering workforce reductions is to decide which positions need to be cut. To do this, you should be able to answer the following workforce reduction questions:

1. Will workforce reductions be made in certain departments only or will layoffs stretch across the whole organization?

2. Which positions are essential to maintaining stable profit flow?

3. Which positions are not heavily contributing to your organization’s long term strategy?

4. What skill sets does your current workforce have and need?

5. Are there multiple employees holding the same position?

You can learn more about how to select employees for a layoff or RIF event using our guide here:

Answering these workforce reduction questions is a critical part of the employee selection phase. This process will help you decide which positions can be cut without greatly affecting your day-to-day business processes. Also, a cross-departmental analysis of your workforce will provide you with the rationale behind your layoff decision.

Once you decide which positions are redundant or less effective, you need to work with individual managers to evaluate employees based on their:

• Performance. What does the employee’s performance review look like?
• Skills and qualifications. What skills and qualifications does the employee have to offer?
• Attitude. How does the employee carry out their daily tasks?

Furthermore, you need to think about how to approach protected groups of employees. These include any employees who are on protected leave (FMLA, maternity leave, disability leave) and employees over 40 (OWBPA).

While you can technically layoff these groups of employees, you need to give a good reason for doing so. Be ready to defend your reduction in force against any unsolicited discriminatory claims regarding unfair layoffs.

After you’ve settled on the exact number of workforce reductions, it’s time to notify affected employees. According to reduction in force guidelines, it’s best to use a formal, written notice to inform employees about their termination of employment. We recommend you prepare a reduction in force letter to inform employees about their impending layoff.

In your reduction in force letter you should provide the reason for the layoff, inform affected employees about their rights, and end the letter on a positive note by acknowledging the employee’s contribution to the company. Additionally, make sure you abide by federal and state WARN regulations to stay clear from any legal troubles.

You can download our quick layoff notice letter template here:

Download a Sample Layoff Letter

Save time and reduce stress by downloading and customizing our sample layoff letter for each reduction in force (RIF).

Download

When employees hear about workforce reductions, things can sometimes get blown out of proportion. It’s best to coordinate a reduction in force notification meeting to avoid the spreading of rumors and disinformation.

Here are some tips to conduct a reduction in force notification meeting:

• Get straight to the point and keep things short and simple.
• Anticipate questions and be ready with answers.
• Prepare yourself for different scenarios and emotional outbursts.
• Show support and encourage employees to ask questions.
• Remain calm no matter what employees say or do.

However difficult this meeting may be for you it’s far more difficult for employees going through the layoff – trust us. That’s why it’s absolutely important that you keep your composure all through the reduction in force notification meeting.

Devise a plan to support displaced employees during their termination of employment. One way to help affected employees is by offering outplacement services and severance packages. The point of severance packages is to provide employees with financial security until they find another position while also protecting you from legal battles. Outplacement, on the other hand, is a service offered to outbound employees that aids them in finding their next role.

You can learn all about the importance of outplacement here.

It really does help to relieve stress across the board and keeps your reputation as an employer intact.

You’ve probably heard of something called ‘layoff survivor’s guilt‘. Well, this is exactly the type of ‘guilt’ unaffected employees might feel during workforce reductions. In fact, employees that remain unaffected by workforce reductions usually harness a whirlwind of emotions. It’s common for employees to experience:

• Grief and feeling the need to support displaced colleagues.
• Resentment and anger towards management teams.
• Insecurity about their own jobs.
• Curiosity regarding the steps leading to the workforce reductions.
• Resistance to accept reduction in force processes.
• Hesitancy to take up new workload.

Therefore, it’s crucial you handle this readjustment period with care. Allow time for employees to readjust back into their roles and overcome organizational stress. One way to boost employee morale and deal with disgruntled employees is by providing complete transparency of your reduction in force policy. This way, employees can understand exactly why and what brought about the layoffs.

Termination of employment, layoffs, and RIFs in general are sore spots for employees and employers alike. Consequently, you need to be ready to deal with assessing, notifying, and executing the overall reduction in force process accordingly.

These workforce reduction guidelines will give you an upper hand in your overall reduction in force practices. So don’t pass them up. Write them down, share them, and most importantly – implement them.

Want to learn more about RIFs? Check out our guide here:

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