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Leading Masterfully Through A RIF

By Sara Zeff Geber, Ph.D., Retirement Transition and Life Planning Expert, Life Encore

Leader regrouping employees after RIF.

Even the best leaders sometimes have to make unpopular decisions.  However, the way you handle yourself in this situation will be more telling than how you deliver news of an acquisition or better-than-expected quarterly result.  The survivors of a RIF need strong, supportive leadership.  If you are a leader who believes in investing and supporting your human capital, you can use this opportunity to pull your team together and build a healthier organization that will achieve its new goals and succeed in todays’ market.

When you are trying to cut expenses in order to save a small company, spending many thousands of dollars on name-brand outplacement services may seem resoundingly counterproductive.  However, even without a costly outplacement team in place, you can manage a RIF with minimal drama and stress by creating a positive and caring atmosphere for those who are leaving and those who remain.

Treat a RIF as a project.  Engage two key helpers from outside the company:  an experienced organizational consultant and a legal advisor, and work closely with them through each of the following steps.  

The Project Plan

1.     Create a SHORT timeline:  From the day you decide a RIF is necessary until the day you formally lay off employees (we call that Notification Day) should be 10 days or less.  List the critical activities in each step leading up to notification day, and include a few days beyond. 

2.     Write the story:  Be honest and thorough about the necessity of the RIF. Commit your reasons and justification to writing, and stick to the story.

3.     Run the numbers: Determine how deep the RIF must be, working with your CFO and/or the Board.

4.     Eliminate Jobs, not people:  Determine what JOB categories must be eliminated and how many in each of those categories.  Ensure with legal that there is no “adverse impact” inherent in that list.

5.     Engage your leaders and managers:  Allow them to rank the individual employees in each category, based on objective criteria (e.g. depth of experience, breadth or type of knowledge).  Those at the bottom of the ranking will be the ones terminated.

6.     Prepare materials:  A packet of material containing their formal notice of termination plus information about COBRA; disposition of 401K or other retirement plans; a release of company liability; explanation of their severance package, if applicable; a checklist of company-property items to be turned in; and information about discontinuation of passwords, logins, access, and email. 

7.     Prepare your managers: The day before the RIF takes place your consultant should create a script and guidelines to help your managers deliver the notification message. He or she should conduct a preparation and training meeting for those who are notifying people of termination.  The following should be noted or reinforced in the meeting:

·      To explain the RIF, the story should be memorized and delivered pretty much verbatim by everyone

·      The decision is final and has been reviewed at the highest levels

·      The RIF is NOT performance-related and positive references will be given, when asked

·      HR is available to discuss benefits-related issues

In addition, managers delivering notifications should be coached on how to listen and be supportive, answer questions factually and honestly, and convey a posture of concern and helpfulness, but not leniency on the decision. This meeting should also include time to practice (role play) the delivery of the notification. 

Those delivering the notifications will generally be middle managers and they will have plenty of questions themselves about the nature of the decision, why it is necessary, and what they should do for those who remain.  Managers will be nervous about their ability to get the work done with fewer employees and how they will reorganize their team.  Upper management should prepare to address their concerns with the same supportive approach they expect from them in the notifications.

Determine who is on leave or vacation and how to handle it.  Contact them and bring them in, where possible, even if they are not directly affected.  Everyone, managers and employees, should be made aware of this activity at the same time or they will surely hear it through informal channels.  Avoid that if at all possible.

You must ensure silence among your managers until the notifications have been made.   This is one of the reasons for the short timeline on this activity.  Any breach of the pact of silence will adversely affect the integrity of the project and will be difficult to remedy.

Notification Day

The ideal timeline will have managers delivering the notifications in one-on-one meetings during a specific time of the day, say 9:00-11:00am.  The meetings should take no more than 15-20 minutes.  Those being terminated will be advised of the timeline for their departure (you may prefer Notification Day also be their last day OR you may choose to make their last day one to ten days in the future to allow for a smoother transition). 

Regardless of your preferred timeline on their departure, they should be encouraged to leave the premises at that point, take the rest of the day off in order to mentally and emotionally process the information, read over the many forms and documents in their packet, and collect their thoughts. 

After notifications have been delivered, shift your attention to those remaining:

1.     Rally the Troops.  Within an hour or two of the notification meetings, say 11:30am, y. You should schedule an all-hands meeting.  In that meeting, the company CEO or President should announce that the RIF has occurred, some jobs have been eliminated, and convey the timing for the departure of those individuals.  The story should then be told once again, exactly as it was in the notification meetings.  At that point, the meeting should shift to a brief presentation of the strategy for the future.  People are likely in shock over the news, so make it short and convey your optimism.  Then take questions for at least 20 minutes.  Be as honest and forthcoming as possible.  If you can’t answer a question, tell them why you can’t and when you will.  Be supportive and upbeat about the future.

2.     Close Ranks:  Later that same day, say between 2:00-4:00pm, each department head should call a meeting of their entire department to discuss the new organization, their new team, and how they will operate going forward…how the work will change, how they will fulfill their commitments, how the workload will be absorbed and the adjusted priorities.

3.     Reduce Survivors’ Guilt:  It is still a tough economy and getting rehired can be challenging.  Those who remain can be helpful and feel like they are doing something positive in the wake of this event by helping out with contacts and references for those who are leaving.  Few companies encourage this activity, but there is no reason why they shouldn’t.  Employees as all levels should be encouraged to use their networks to help their friends and former colleagues get interviews and new employment.  (This, of course, assumes they have NOT been terminated for cause or poor performance.)

No leader likes to see a RIF happen.  However, when implemented with a well-organized plan, strong communications, and diplomacy toward both those leaving as well as your survivors, you can insure a more positive experience for all involved.

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