Reduction in Force Guide

Introduction

Delivering news that someone’s position has been eliminated may be one of the most difficult responsibilities you face as a Human Resources professional.

Your goal should be to create an event that will leave impacted employees feeling that the message was delivered professionally, that resources were provided to them to make their transition easier, and included the tools to help ensure their job search will be effective and efficient.

This guide walks you through best practices for conducting a workforce reduction event. We encourage you to adapt it to your corporate culture and to turn to an outplacement service provider to help you design an event that runs smoothly from start to finish.

Questions to Ask Before Getting Started

It is always best to start with a plan. Here are some questions to ask yourself – and your executive team. Pull together the answers to these questions as a foundation for planning your event.

  1. How many people will be impacted?
  2. At what date will the news be delivered?
  3. Will everyone be notified on the same date, or will the notifications be phased?
  4. How soon before the notification date will the larger executive team be notified? The managers?
  5. How will we train the managers to deliver the notification message?
  6. Who will be impacted? Which groups? What level of employee?
  7. How will we deal with situations where managers must deliver notifications while being impacted themselves?
  8. Does the WARN Act apply here? Do we need to do a WARN Notification?
  9. Who should be available and onsite the day of the notification (i.e. security, the Employee Assistance Program (EAP), outplacement provider, etc.)?
  10. Have you notified your employment counsel representative to review your initial plans and demographics?

Best Practice Activities

  1. Establish a Business Case

With the help of your executive team, create a concise business case for the purpose of the downsizing event. This information can be used in multiple communications, including notification meeting scripts, general announcements, notices, etc.

  1. Assemble a Team

Establish a team to plan the event. Your team should consist of cross-functional leaders from HR, Finance, Legal, and leadership, as well as the heads of impacted divisions. An HR project manager should guide the team.

  1. Hold a Planning Meeting

With each leader or manager making decisions about who will be retained and who will be impacted by the event, be sure to discuss, either as a group or one-on-one, the legal (e.g., EEOC), and organizational issues surrounding those decisions.

  1. Consider Timing

Deliver all notifications within a short period of time. This will help alleviate the concerns of those employees who will be retained. Require groups to have their lists finalized at least a week prior to the notification date. This gives you time to put together packages and finalize the process.

  1. Provide Support for Affected Employees
  • Have representatives from your Employee Assistance Program (EAP) onsite on the day of the notification to help alleviate any emotional issues that may arise for both the impacted employees and those you wish to retain.
  • Schedule a planning meeting with your outplacement services provider to ensure that resources are allocated for your event and preliminary job market research can be conducted. Be sure to thoroughly review services offered to ensure that your outplacement provider can deliver on results.
  • Have your outplacement services provider onsite the day of the notification or soon after to conduct debriefing meetings, register impacted employees, and hold orientation sessions.
  1. Consider Security Just in Case

In case of any volatile or hostile reactions, be sure to have security on alert the day of the notification event. However, ask security to keep a low profile. There is nothing more demeaning than having to be escorted out of the building by security when the employee has reacted professionally to the notification. (Ultimately, security’s presence should be based on your internal policies and the known factors surrounding the event).

  1. Conduct Notification Training for Managers
  • Conduct manager notification training for all managers who will be delivering the information. No matter how many times a manager has conducted a notification meeting, it is a good idea to review the do’s and don’ts.
  • For the notification meetings, have managers meet one-on-one with each impacted individual whenever possible. This is the first signal to that employee that you respect them as an individual, which will go a long way towards preserving your reputation.

PLANNING PHASE

ACTION ITEM                                                                               COMPLETION DATE       PERSON RESPONSIBLE
1.     Establish business case for reduction in force and review with your legal counsel.    
2.     Identify a spokesperson to interact with media and handle public relations.    
3.     Determine approximate number of employees and/or positions to be eliminated. »   What percentage of the total workforce is impacted? »   What is the actual number? »   Which locations are affected?    
4.     Establish action plan and timeline for the entire event. »   On what date will notifications take place? »   Will some employees need to be retained longer than others? If yes, which positions and for how long? »   What retention tools/strategies will be used?    
5.     If applicable, prepare WARN Notice. If you need more information about WARN Act Compliance, visit: https://www.doleta.gov/programs/factsht/warn.htm    
6.     Establish selection criteria and review against applicable laws. Some criteria examples: »   Skills vs. business needs »   Job elimination »   Job redundancy    
7.     Determine benefit/severance package for employees: »   Pay in lieu of notice? »   Severance pay? »   Medical and dental continuation until (date) »   EAP program? »   Outstanding 401K loan payoff? »   Accrued but unused vacation to be paid? »   Redeployment possible? »   Career transition assistance outplacement?    
8.     Contact outplacement services provider to schedule planning meeting.    
9.     Conduct first review meeting of reduction in force (RIF) list/timetable with executives and legal counsel.    
10.  Work with Employment Counsel or your legal department to establish administrative process for workforce reduction. Tasks to consider: »   How will computers/phones/other materials be collected from each individual? »   When/how do we inform Payroll? »   Create a mechanism for tracking benefits and outplacement    
11.  Contact legal counsel and review list for potential negative impact and high risk situations.    

PLANNING PHASE

ACTION ITEM                                                                            COMPLETION DATE        PERSON RESPONSIBLE
12.  Conduct review meeting of the RIF list and timetable with executives and legal counsel.    
13.  Create an exit packet. Examples of packet contents: »   Formal separation letter outlining benefits/severance »   Outplacement / career transition information »   EAP benefits, 401K forms »   Unemployment insurance/social security materials    
14.  Contact EAP Program to inform them of the workforce reduction and discuss any additional benefits they can provide to employees and families.    
15.  Identify rooms in building(s) to be used for individual notification meetings.    
16.  Establish communication strategy and timetable: »   Executive team & Managers »   Memo to all employees to go out immediately following event    
17.  Develop talking points to be used by managers when conducting notification meetings.    
18.  Schedule manager notification training.    
19.  Develop schedule for RIF meetings.    
20.  Decide on a date and time for an all-hands meeting, which should be included in the memo to retained employees.    
21.  Create a retention plan for retained employees.    
22.  Schedule appointments for impacted employees to meet after (date) with management or HR for final notification.    
23.  Meet with Security/Facilities to identify/resolve security issues and to discuss presence on day of notification.    
24.  Provide Payroll with list of affected employees.    
25.  Conduct final meeting with executives for review of impacted employee list: »   Create final »   Assign outplacement packages    
26.  Assemble individual notification/exit packets for employees.    
27.  Conduct manager notification training.    
28.  Send final list of eligible employees to outplacement services provider (with eligibility dates, contact information, and package assignments designated).    
29.  Review and finalize schedule of notification meetings.    
30.  Have outplacement services provider onsite for post-exit interview debrief and/or orientation session    

IMPLEMENTATION PHASE

ACTION ITEM                                                                               COMPLETION DATE        PERSON RESPONSIBLE
1.     Initiate any security procedures to prevent high risk situations.    
2.     Distribute memo explaining event to all employees.    
3.     Conduct employee notification meetings. »   Manager/HR conduct each notification meeting »   Manager explains reasons for position elimination and how employee is being affected »   HR Rep explains benefits/severance package and outplacement assistance »   Introduce employee to outplacement representative or encourage employee to call if no representative present    
4.     Conduct notification meetings for anyone not onsite on notification date.    
5.     Notify temporary agencies about affected temporary and contract employees.    
6.     Conduct meeting for all retained employees.    
7.     Conduct one-on-one meetings to reassure key employees.    
8.     Begin outplacement workshops/counseling sessions.    
9.     HR Staff/Management meet with impacted employees on an individual basis to explain benefits/severance.    
10.  Ensure Payroll arranges for benefit continuation through determined date.    
11.  Send out COBRA packages to impacted employees.    
12.  Complete final administrative paperwork.    
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