March 2005

ANOTHER WAY

Reductions In Force (RIF) are never easy.  As we have worked with numerous companies going through the process, we have found ourselves suggesting a creative alternative to the traditional mandated RIF in certain situations.   

In our experience there are times when considering a voluntary lay-off process may be in the best interest of the organization.  Although this option is often perceived as risky or undoable, we find that where the circumstances are right, the potential upside outweighs the risks and overcomes many of the inherent downsides of the traditional approach.

The potential strategic advantages of a carefully planned and implemented voluntary RIF process include the following:

·        It minimizes the disruption and anxiety caused by a mandated RIF, where the employees feel powerless and uncertain about their own futures going forward.

·        The ultimate outcome is not a surprise but rather the culmination of a process that has involved and empowered employees and has engendered a new level of open communication company wide.

·        It permits the organization to leverage the timing of the departures to its own advantage.  Timelines prior to final departure dates can be structured to complete critical assignments and assure seamless transitions.

·        A well-designed self-selection process significantly reduces the potential of litigation.

·        In the end, it retains those who are most committed, and most convinced of their ability to make ongoing contribution.

Having said the above, not every situation lends itself to a voluntary RIF process and can leave the organization vulnerable to the potential risks.  These include the fears that:

·        Not enough people will volunteer, thus necessitating mandated termination anyway.

·        Too many people will volunteer creating awkwardness internally and the reality of retaining people who would rather have left.

·        Your key contributors will volunteer, i.e. the ones you would like to retain and perhaps take with them other key employees.

Though real, these risks can be managed if some fundamental factors are present in the organization.  These are the factors that create a platform for success, and include considerations of organizational culture, communication and empowerment issues, validity of performance reviews, and clarity of the business case for the downsizing.  

Next month, we will consider these fundamental factors at greater length and offer a process for determining whether or not a voluntary process might merit serious consideration.  

Call us, we can help.

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