Reduction in Force Checklist

When it comes to downsizing your organization, there’s nothing like a good, old fashioned checklist to help keep everything running smoothly. Holding a reduction in force–whether due to business restructuring, reorganization, or budget limitations–is quite difficult and involves many steps. Preparing a reduction in force checklist is essential for helping you stay in compliance and navigate the entire delicate process from start to finish.

Reductions in force (RIFs) and other workforce reduction events are incredibly stressful for everyone involved. In this article, we will cover all of the proper steps you’ll need in your reduction in force checklist, in their proper order, to ensure that you stay on track and help the reduction event go as smoothly as possible for everyone involved.

Let’s start with an example of what your reduction in force checklist might need to include. Below is a sample reduction in force checklist that you can copy and customize for your own organization’s needs and reduction event specifics.

Feel free to copy and customize this example reduction in force checklist to craft your own checklist for your next reduction event. Of course, remember to consult with your legal counsel to ensure you are including any necessary steps to comply with all local, state, and federal laws. You can also download our free complete guide to handling layoffs below to help get you started with your reduction event.

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Remember that reductions in force (RIFs) and layoffs are technically different. So make sure you learn the difference between the two to understand which reduction event you are conducting, what steps that will require, and how to prepare your staff to navigate the delicate process.

Now let’s break down this example reduction in force checklist into its key components and what to keep in mind for each. It’s helpful to break up this reduction in force checklist into sections to keep everything as easy to follow as possible.

These sections should cover the following essential steps:

1.  Identify your business and organizational goals
2.  Consider alternative options
3.  Outline your reduction in force plan
4.  Review applicable WARN Act regulations
5.  Select which employees to let go
6.  Determine severance, benefits, and outplacement
7.  Develop your RIF communication plan

The first step–and your checklist’s first section–is to identify your goals and business objectives. This section should help you look into why you are holding the reduction event, how the event would aim to fix your organizational problems, and what you envision your organization looking like at the conclusion of the reduction in force process.

This includes looking at the goals for your organization’s leadership and workforce planning, getting as specific and SMART with these goals as possible. The more detailed you can be, the more accurately you can determine the necessary steps to effectively achieve those goals with minimal downside.

This next section is a natural continuation from the first step. In order to determine your reasons for holding a reduction in force, it’s important to consider all other viable alternatives to see if any other, less extreme methods could accomplish the same organizational goals.

This means exploring if there are other courses of actions you could take, such as a furlough, reduction in pay, hiring freeze, a voluntary RIF or retirement, or other methods of corporate downsizing. In particular, any reduction that can be done voluntarily should be thoroughly considered.

Once you have figured out that the RIF or layoff is the right move for your company, it’s time to start laying out the actual plan to understand how your reduction event will play out in reality. This is the part of the checklist that gets into the nitty gritty detail of how the reduction event should go, where it should take place, and how long it should take.

First, you’ll need to put together your team who will finalize and execute the reduction in force plan. Then, as a team, you’ll need to identify what locations and teams will be impacted, how many people need to be let go, what legal regulations you’ll need to comply with, and how this plan will impact your business goals. This also involves creating a timeline for the reduction event, and how any other cost-cutting measures (e.g., bonus cancellation, hiring freeze, etc) might need to be incorporated.

Finally, you need to remember to draft a reduction in force plan on paper for your legal counsel to review. The ultimate goal is to create a plan that will give you the best chance of achieving the business and organizational goals you identified in the first section of your reduction in force checklist.

As you make your initial reduction in force plan, it’s especially important to keep an eye on the implications with WARN Act regulations. Depending on how much of your workforce you are planning to let go, and where those workers are located, you may fall into the WARN Act definitions for a mass layoff or plant closing.

In that case, you will have specific criteria to consider when selecting your specific employees or plant locations to cut, as well as additional notifications to incorporate into your communication plan (which we’ll get to in a bit). So make sure you understand the federal WARN Act, plus any local or state-specific WARN regulations where your employees and offices are located, that may impact your reduction event.

The next step is to develop the exact details that will help you choose who will be impacted by the RIF. We’ve covered the different ways to select which employees you should let go. They all involve a variety of different criteria, advantages, shortcomings, and legal considerations (such as the WARN Act we just discussed). However, all of them should first and foremost be driven by the data.

This is where your reduction in force checklist comes in. Break down all of the steps you’ll need to collect, review, and evaluate the necessary data and regulations to make your employee selection. You will also want to make sure you have your legal counsel review your criteria and initial employee selection, to ensure that you are completely compliant.

This next step is all about how you will support your employees through the reduction process and their search to find new work. This is also a crucial step for protecting your company reputation, morale, and retention of your remaining employees. So this part of your reduction in force checklist needs to outline the steps to put together fair and effective severance packages, including severance pay, benefits, and additional support for impacted employees.

For example, you need to make sure you have a well-rounded and well-crafted severance agreement that goes over the termination in detail and protects you from potential lawsuits. This should be accompanied by fair severance pay, insurance and retirement benefits, and any other additional compensation that makes sense for each outgoing employee.

It’s also incredibly valuable to offer outplacement services to your outgoing employees to make sure that they land on their feet in a new role elsewhere. Outplacement is also powerful for protecting your organization’s reputation, by demonstrating your willingness to support your employees even when they leave the company.

The final step in your reduction in force checklist is to lay out your plan for ensuring your communications are all on point. This includes preparing your notification letters to employees being let go, meetings with those impacted employees to discuss benefits and other details, and communications for your retained staff to ease their survivor guilt.

This part of your reduction in force checklist should also include external and public communications. You want to understand and manage how the public will view your move. So it’s important to control how the news gets out to ensure it doesn’t damage your public reputation, and your bottom line in the process.

The key with this RIF communication plan is to stay on top of how everyone–your outgoing and retained employees, and the public–will be notified of and likely to react to your reduction event.

When it comes to reductions in force (RIFs), there are many requirements and complexities to navigate. That’s why it’s important to prepare a reduction in force checklist to help you hit all of the necessary steps, in their proper order, and ensure that your entire organization navigates the reduction event smoothly without any undue stress or reputation damage.

This means making sure your reduction in force checklist covers every essential part of the reduction in force process, including identifying your organizational goals, considering all viable alternative routes, outlining your reduction in force plan, reviewing WARN Act and other applicable regulations, selecting which employees to let go, determining severance benefits and outplacement support to provide outgoing employees, and your communication plan for notifying those impacted employees, as well as the rest of the organization, in a thorough and thoughtful manner.

Need guidance with your reduction in force process? At Careerminds, we believe that you can never be too prepared for your next reduction event. Our arsenal of resources, templates, guides, and industry-leading outplacement services can help you navigate the delicate reduction in force process from start to finish. Click below to speak with one of our experts and see if we are the right partner for your organization.

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Rebecca Ahn

Rebecca is a writer, editor, and business consultant with over 10 years of experience launching, managing, and coaching small to midsize companies on their business, marketing, and HR operations. She is a passionate people advocate who believes in building strong people, teams, and companies with empowering culture, content, and communication that facilitates meaningful results at every level and touchpoint. In her spare time, Rebecca is an avid traveler and nomad who also enjoys writing about travel safety and savvy. Learn more on her LinkedIn page.