Tag Archives: RIF Communication

After The RIF, Don’t Panic

29 Aug

swine-flu-panic-button

Excellent advice from India’s Express Computer Online if you going through a downsizing.

If your organization has undergone trauma in the form of layoffs as a result of economic conditions or other reasons (e.g. M&A-induced redundancies), what should HR practitioners and organizational managers and leaders do? The WorkTrends results suggest a number of important steps that can be taken to enhance future levels of engagement and mitigate the potential of regrettable turnover. 

  • Confidence is key—Perhaps one of the most important first steps in any post-layoff environment is to regain employees’ confidence in the organization and particularly the future role that they play. While this may seem obvious, a crisis situation may cloud that. Confidence can be instilled in a variety of ways, but organizational leaders should communicate the strategy going forward, translate the strategy into what it means for workgroups, listen to employee concerns, and make clear how the future will be bright for individual employees. Give them a ‘light at the end of the tunnel.’
  • Recognition and opportunity—In the midst of crisis, individuals still make their way the best they can. Life goes on, despite the turmoil. Managers need to consider this while the organization struggles; employees need to know that they are doing their job well and that there will be again opportunities from them at the organization, especially in times after crisis. In other words, give them a reason to hang in there.
  • Turn ‘me’ into ‘we’—In a post layoff environment, employees may turn inward and worry more about matters that are personally relevant or give them a sense of security. Naturally, in times of uncertainty, employees and managers will be more concerned with their own work and livelihood. This tendency towards protectionism can threaten to break down the social ties that bind an organization together. Reinforcing messages such as ‘We are all in this together,’ and reiterating that group is stronger than individuals will encourage employees to bond together and increase organizational loyalty.
  • Prepare for the rebound—Finally, while there are things that can and should be done now for your layoff survivors, it is also important to take a long-term perspective. The economy will eventually rebound, customers will return, and hopefully your company will return to its upward path to prosperity. How your layoff survivors are treated will become part of the organization’s history. If it is done well, that can help attract and retain new employees. If it is done poorly, it will have the opposite effect.

I recently assisted an organization that had to go through a downsizing. The leaders acted in a professional and dignfied manner. The reduction certainly had an impact– they always do– but that impact can be managed by effective leadership.

Is Your RIF Leaving Staff “Punch Drunk”?

11 Aug

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Yet another survey, this time from People Management, points to how badly most employers go about force reductions:

As half of UK businesses consider making redundancies within months, the damaging effect on morale has been highlighted by a CIPD survey of 3,000 employees. The YouGov survey found that 70 per cent of employees said redundancies had damaged morale, with 22 per cent so unhappy about how redundancies were being handled that they were looking to change jobs as soon as the labour market improved. Just over a quarter said they were less motivated as a result of redundancies.
Some 81 per cent believed senior managers needed to restore or improve trust in their leadership, as only a quarter said that they were consulted on important decisions. Just over half of employees said frequent and honest communications would have the greatest impact on improving trust. Public outrage at “rewards for failure” was also reflected in the survey, as 29 per cent said not rewarding failing senior managers was key to rebuilding trust.
Ben Willmott, CIPD senior adviser, public policy, said: “Survivors of redundancy programmes left ‘punch drunk’ by the process may not have the levels of motivation and commitment needed for their employers to capitalise on any recovery. Many disillusioned employees will vote with their feet and leave as soon as the labour market picks up.

Terribly sad, really. By leaving employees “sucker punched”, leaders risk losing those employees who survive the layoff. In the employee engagement surveys we’ve analyzed for our book Re-Engage!, we see many employees who are, to coin a phrase, “sullen and near mutinous.

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

20 Feb

recession

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.

Salary Freeze or RIF? Another View

8 Feb

I recently responded to a question from an executive in the insurance industry about whether a salary freeze or a reduction-in-force was the best way to reduce costs while maintaining employee morale and engagement. I’d like to offer the perspective of someone who looks at this question primarily through the lens of my research and consulting experiences, which leads me to conclude it may have less to do with which choice and everything to do with how leaders going about it.

I spent 12 years with a global consulting firm that assisted employers with force reductions. I’ve seen that done extremely well, where both departing employees and those remaining are treated professionally and with dignity. The communication was open and honest, senior leadership was front and center to answer questions and get feedback, and there was a specific plan that was well coordinated that helped remaining employees move forward in a productive way. For those terminated employees there were decent benefits offered–severance payments, benefits continuation, preference for re-hiring, outplacement services– which sent a message that the leadership of the company truly cared about these folks and wanted to help their transition go as smoothly as possible. (For more information about outplacement services you might find this New York Times article of interest.) In those cases I’ve talked to all parties involved and heard very positive things about the employer in spite of the RIF, feelings that often led to employees wanting to return and solid productivity for those on-the-job.

On the other hand, I’ve witnessed horrible “RIF train wrecks”, where communication was terrible, rumors were rampant, senior leadership was hiding, and there was no plan to move the company forward confidently– disaster for everyone.

I think the same can be said for salary freezes. I’ve worked with companies where that has worked well, and others where the results are less than positive. I’m familiar with one company that has been frequently awarded a slot on the “Great Places to Work” list that Fortune magazine publishes every year, and stayed on the list one year when their business hit hard times and they were forced into both a salary and hiring freeze.

The common denominator for successful outcomes? Great leadership, of course, leadership that has built over time a positive, engaging culture. It’s been my experience that how a company will go about this is just as important as what they do, and effective senior leaders can make a big difference in determining whether a freeze or RIF is successful. If that leadership has developed a culture of trust and confidence they can more easily deal with many challenges such as a difficult decision such as this.

Your take-away from this rant? I won’t presume to tell any company what the best choice is from a financial perspective. But I can tell you that how you act, how you lead, how you communicate, how to vision-cast– all these things will make all the difference in the world regarding this any many other important issues in these difficult economic times.