OMNI Senior Consultant & Higher Education Practice Leader Roger Dusing, PhD offers timely advice for employers on the importance of having a plan in place for minimizing the potential damage of reducing the size of their workforce in order to reduce costs. (Image courtesy of ShutterStock)
Layoffs, reduction-in-force (RIF), right-sizing, downsizing, rebalancing; call it what you will. While there are some semantic differences, all of these words and phrases mean terminating some of your employees to reduce the size of your workforce in order to reduce your costs. While the label you use really doesn’t matter, how you go about it does, both for those you let go and for those you want to stay.
First question: who goes and who stays? Let me strongly encourage, that unless you are governed by a union contract or a formal policy (another bad idea for another day), don’t use an arbitrary practice like last hired/first fired. Nor, unless you only need to cut a handful of jobs, don’t use attrition. While both of these sound objective, fair, and employee-friendly; in practice they do not allow you to keep the best people or to lose the ones whose work no longer needs to be done.
Instead of thinking about whom to cut, think about whom to keep. Look at the work you need done, and the work you can stop doing. Determine how many people it will take to do the work you need done. Then select the best workers you have—the most talented, the most dedicated, the ones you want to grow with the organization—and put them one side. Then look at who remains—those are the ones to consider cutting. Now, this strategy assumes that you have a practice of regular and factual performance reviews, and you can support your designations of who is a “good” worker and who is not. If you don’t have this established documentation, I suggest you find other criteria for making your selections.
Now look at the group that you think should leave and analyze the demographics (age, gender, race/nationality, etc.). Your goal needs to be that the percentage of employees in each of these groups that you are keeping, is pretty close to the percentage that you have today (keepers and leavers combined). If you find that your process happened to substantially reduce the remaining population of any category, you need to rethink your selections. (The rule of four-fifths relates, but explaining it goes beyond this post.)
The next step is to make a plan. The announcement of a RIF will likely send shockwaves through the organization. This is not something you want to leak out as it will cause your best people to go find other jobs for fear of losing theirs, and that is that last thing you need right now. Determine the last day worked, severance amount, benefits support, payout of vacation, letters of recommendation, and all the other details. If you are going to offer severance (which I strongly encourage). then everyone who receives severance needs to sign an agreement that they are releasing you of all claims (they promise not to sue you) before you pay the severance. You’ll want your attorneys to help you with that agreement.
Next, execute that plan. Make it quick. Talk to groups of people if you can; that way you ensure that they all get the same message at the same time, and if possible, exit them from the facility immediately. In these meetings, be compassionate. Don’t talk about how hard it was on you to make the decision. Be respectful of these people and their new problems. Perhaps the best way to make sure that your RIF turns into a discrimination suit is to be callous and make people mad. Finally, meet with the remaining team, tell them what happened, and show them how confident you are they can be successful. Don’t say why you chose to let those people go. Instead, talk about why you kept the people you kept and talk about tomorrow, not yesterday.
A frequent tactic is to give parting employees some amount of advance notice. This is common in Higher Education because you may need these people to finish out the current semester or academic year. While this may feel compassionate, there are some strong downsides. Once someone knows that you no longer want them to work there, their motivation drops dramatically. Some will be professional and do what you ask, but they typically will still have a drop in productivity. They’ll also start looking for a new job. Others will become malicious and will try to find ways to harm the organization – so play it safe and allow them to leave early.
Lastly, attend to the survivors. The severance you paid to the exiting employees, along with the professionalism you show them, will help them to transition, but more importantly, it shows the survivors that you care. Then if, heaven forbid, their jobs get eliminated in the future, they’ll know that you’ll care about them as well. A poorly executed reduction in force will harm the organization – not just in terms of potential charges of discrimination – but from the negative impact on those you are working to retain.
One last piece of advice – if you are uncertain about any of this process, get some assistance. Find a consultant or advisor who has done this before and let them help you with the process. This could be an attorney, but their goal is to minimize the risk that you’ll lose a future lawsuit. Find an experienced HR professional who can help ensure you keep your best employees, which in the long run is way more important.
Roger Dusing, PhD, is a Senior Consultant and the Higher Education Practice Leader at OMNI. He previously served as Chief Human Resource Officer at Park University for eleven years. With over 40 years of HR experience, including 30 years in C-suite level roles, he looks forward to reflecting his passion for higher education in his work to bring affordable, high-quality HR services to small- to medium-sized colleges and universities.
Roger holds a PhD in Business Management, with a concentration in Human Resources from Northcentral University, a Master of Science in Administration from Central Michigan University, and a BS in Industrial Engineering from Bradley University. He also authored the book “I’m Fired?!? A Business Fable About the Challenges of Losing One Job and Finding Another.”