Does a Reduction in Force (RIF) loom in your future? Many HR professionals say yes – and it’s a task they dread.
After all, no one wants to deliver life-altering news or have to manage a RIF.
Yet, an unprecedented number of HR professionals and company leaders have to do it these days. For instance, Shopify and Tesla each let go 10% of their staff. Realtor Re/Max slashed 17% of its workforce. Vimeo laid off 7% of its staff. Microsoft dropped 1% of its team in a realignment.
Regardless of the percentage of employees affected by your RIF, they’re still people. And they all have lives, families, needs and aspirations that will be negatively affected in short notice.
Plus, it won’t be easy for employees once you let them go. Eighty-five percent of employers plan a hiring freeze as we enter an anticipated recession, according to research from Fiverr Business.
“Employees who are told their jobs are no longer sustainable are put in a position of helplessness,” says Dave Fisch, CEO at The Ladders. “What is possibly their sole source of financial stability is being taken away from them by the company to whom they’ve dedicated many hours of their lives.”
So how you handle a RIF can make all the difference in how employees who are affected react, respond and rebound from it.
Here are seven ways to handle a RIF effectively and with compassion.
Be conscious of space and time
Whether your RIF affects two people or 200, tell them in-person. Delivering bad news – and yes, for most employees this is the worst news of all – via email, text, video, etc., borders on heartless. And you don’t want displaced employees to remember their employer or HR that way.
Consider where you have this conversation, too. Try to do it in an office or conference room to give employees privacy and comfort to absorb what’s being said and how it affects them. This also gives them space to respond without judgment. Naturally, there are challenges to in-person terminations with fully remote employees. So you might try a video call.
Be pointed, sensitive
How you present the message matters – perhaps more than the actual message. Employees often remember how you made them feel more than what you say. So, the tone and word choice matter.
“In that conversation, you need to get straight to the point,” says Fisch.
If you beat around the bush, or use a build-up that tries to justify the decision and soften the blow, you’ll likely do the opposite. You just give them more time to imagine the worst (which the layoff may not actually be the worst possible scenario to some people).
Speak calmly, evenly and “use plain language. If the employees’ professionalism and/or productivity was not a factor in the decision, make that clear in no-nonsense terms,” Fisch says. “Try to avoid using jargon like ‘right-sizing’ or ‘back-burnered’ and be transparent about the decision-making process.”
When you tell employees they’re part of a RIF, give them time to think about what they’ve heard, and form questions and voice concerns.
“Given the seriousness of the situation, the employee will likely have questions, so it is critical that thoughtful answers are prepared,” says Fisch.
Gather all you can before meeting with employees about timelines, separation and/or unemployment benefits, exit interviews, off-boarding procedures, job placement assistance, referrals, emotional and/or financial support – and beyond.
All employees – not just those who are let go – need support when layoffs occur. Beyond delivering the news and facts or reasons behind it, HR pros and front-line managers want to be ready to give emotional, moral and professional support.
“When a company undergoes a large-scale reduction in headcount, it can be a traumatic experience for the employees asked to leave the organization,” says Joseph Ifiegbu, CEO of eqtble, in the report Data Driven Layoffs: How to use Data and Empathy to Navigate Difficult Layoff Scenarios, which he co-authored with his research team.
“Knowing what to do next, where to go, and how to find a new job can be challenging. Additionally, there can be a loss of morale amongst the remaining employees,” says Ifiegbu.
At the most basic level, direct affected employees to the well-being resources you already have available – perhaps virtual mental health and financial planning experts. Make sure front-line managers know where to direct employees because they’ll get the questions, too.
Next level: Bring in counselors who are immediately available to provide emotional support. And have financial counselors on hand to walk employees through that side of situation.
Consider engagement levels
When making the difficult decisions on who to lay off, take into account engagement. Ifiegbu and his researchers found, “Companies can save a lot of future headaches by identifying the highest engaged employees in the organization and working to retain these employees during the layoffs.”
To identify the highest-engaged employees, you’ll want to analyze information such as:
- promotion rates
- employee Net Promoter Score (eNPS) or a similar rating scale
- performance, and
- team attrition rates for managers.
In sweeping layoffs, you likely can’t avoid letting go of some of your most engaged employees. But it’s something to consider when possible.
Help employees move on
Beyond the initial support at the time of layoffs, try to offer additional resources and support to help employees bounce back in their careers and move on successfully.
“Support is critical after layoffs. Employees should not feel cut off from help and support after layoffs,” Ifiegbu says in the report. That might include career counseling or directing them to career help such as local career centers, such as state-operated career assistance centers, mature worker programs or retraining opportunities in other industries.
Another idea from Fisch: “At Ladders, we offer a discounted premium membership to employers forced to conduct layoffs to help professionals quickly find their next high-quality job opportunity.”
In almost all situations, layoffs mean the business is struggling. That will likely impact benefits and bonuses.
So let remaining employees know early that you’ll need to reexamine and realign plans to meet your new business realities. Eqtble suggests you:
- Combine bonus data with engagement, productivity and performance data to find the right number
- Be okay with upsetting some higher-paid employees because their bonuses will likely be affected, and
- Note that some teams – such as sales and marketing – will often need to be excluded because most of their pay is variable.