Executing an RIF

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One of the most challenging undertakings for HR is a Reduction in Force, exposing the organization to large administrative costs, a loss in productivity and low employee morale. HR departments need to work with senior management to follow best practices in executing an RIF to protect the organization against costly liability and to create goodwill for the company. Below is a list of 10 guidelines to follow:

1. Stop new hires and promotions. Ideally a freeze should be in place for a minimum of several months before the RIF. It is difficult to make a case for any sudden reductions on the heels of big promotions or a number of new hires. The organization should take a methodical approach to any expansion or reduction of its workforce.

2. State the rationale behind the RIF in writing. Be clear and be specific. Documents that are written and shared among management support the evidence for any business need for an RIF. Keep in mind that anything in writing can be used in a court of law.

3. Create a planning team. Include a diverse group of people representing a broad range of experience, race, gender, age, etc. This team will be responsible for determining the RIF criteria and communicating terminations.

4. Determine the RIF criteria. The process of deciding who will be let go must be as scientific as possible. Organizations generally combine their criteria based on subjective (communication and leadership skills) and objective (performance ratings, salary range, level of seniority) data.

5. Identify individuals for layoff. This process should start at the group or department level to ensure that those making the selection have personal knowledge of any employees being considered for the RIF. Strive for diversity in the individuals chosen, keeping in mind governmental regulations such as the Age Discrimination in Employment Act.

6. Analyze and adjust the proposed group with legal review. Once you have a list of individuals slated for reduction, review the RIF criteria and individuals chosen with an attorney. The attorney will evaluate how well the company is following its own policies and determine whether the RIF is fully legal. Based on sensitive criteria such as medical leave or the spread of age, race and gender across the group, you may need to make adjustments to your list.

7. Determine entitlements for affected employees. Once a decision to reduce the workforce has been made, consideration must be given to insure affected employees receive all entitlements required by law and company policy. This includes wages and vacation pay (generally subject to state laws), pension benefits, group health insurance benefits and conversion privileges, unemployment compensation benefits and any severance benefits. There is also the Worker Adjustment and Retraining Notification Act (the “WARN Act”) with requires employers to provide notice 60 days in advance of covered plant closings and covered mass layoffs.

8. Finalize communication documents. This includes termination notice letters, forms, and releases, as well as talking points for supervisors who will be communicating the layoffs.

9. Communicate the upcoming layoff to employees. Depending on the size of your organization, communication can either be done individually or in a group session. The announcement should be conducted in a professional manner while explaining the rationale behind it.

10. Move onto the “second phase” of the layoff. Employers should focus on job search assistance, references and recommendations and other logistics (not the


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