To RIF Or Not To RIF– Is That The Question?

There’s a fine article in the Omaha World-Herald about the ongoing debate of whether to sever employees or institute salary freezes/ cutting back hours as options to reduce costs given the tough economic climate. A number viewpoints are offered about both approaches. The article also raises an important issue about management and how any effort should be approached– here’s David Sokol, chairman of Berkshire Hathaway-owned MidAmerican Holdings Company:

In such cases, though, businesses sometimes become shortsighted,  Sokol said. They don’t realize that if they’re not careful, they could lose an awful lot of their best talent.

“Step number one is to make sure that you’re communicating openly and honestly about what’s going on, so that they’re not just hearing rumors. Because, frankly, your employees tend to be lot smarter (than that) . . . they normally know well ahead of your telling them.

As I’ve started in previous posts, it’s probably beyond my pay grade to advise a company whether they should conduct a RIF or salary cutbacks. I do think it my charge to continue pointing out that the success of either tactic will depend heavily on how management goes about it, including communicating in the way Mr. Sokol advises.

Tags: Economic Crisis, Economy, Employee Engagement, Employee Retention, Layoff, Recession, Reduction in Force, RIF, RIF Communication, Salary Freeze, Wage Freeze