Regrettably, RIFs (Reductions In Force) are becoming an increasing reality in today’s economic climate. Many employers tend to see RIFs as a last resort and rush through a process which could have serious legal and financial implications. An often-ignored consequence of a rushed process is the damage it can have on the morale of those employees who remain. While RIFs are never easy to implement, employers can at least consider some options below, to reduce the effect on employee morale:
1. Think outside the box.
Consider implementing alternative cost-saving options, such as limiting travel, temporarily reducing salary (by consent) or reducing overtime (where possible), to show employees that RIFs really are a last resort. Unnecessary spending on travel, social events and other perks at the same time that an employer is cutting its headcount, can negatively affect morale.
Employers may want to consider (if appropriate) informing employees, ahead of time, of the need to cut costs and the possibility of dismissals so that employees are mentally prepared when it does happen. This could be a simple update memo to all staff. Although the memo may have a short-term negative effect, by preparing employees for the possibility of a RIF, employers can avoid the element of surprise. Alternatively, this communication might engender cooperation when other cost reduction strategies aimed at preserving jobs are proposed (i.e. across the board pay reductions).
3. Consult ahead of time.
Be open with all employees and invite them to talk to management about the possibility of RIFs. The more employees know, the less uncertain they will feel. Consider the possibility of voluntary reductions for certain groups of employees. This, of course, should always be subject to the employer’s right to refuse any key employees who step forward.
4. Have clear, fair, and objective selection criteria.
Employers should always have evidence of fair and objective selection criteria, so as to be in a position to respond to allegations that the selection of a particular employee was based on discriminatory grounds. In appropriate circumstances, employers may want to share the selection criteria, in advance. This form of communication might avoid the “Why me?” reaction at the time of dismissal. Employees generally recognize the need to cut costs by reducing payroll in poor economic times and the greatest negative effect on morale tends to be when the “good” employee is laid off as opposed to the underperforming one. However, if employees understand why a particular individual was chosen, the choice may become less of a concern. Selection criteria which are based on clear, measurable and relevant factors (such as performance, length of service, business need etc.) are most effective.
5. Don’t turn your back.
Once an employee has been given notice of dismissal, maintain communication and assist the employee if possible. For example, letters of reference and a quick response to any Employment Insurance claims show the employees who remain that the employees who were dismissed were treated fairly. Most importantly, continue to talk to remaining staff so that they know what the future may hold.
During these trying times, effective communication of the company’s plans, and how employees fit into those plans, will engender loyalty and keep employees focused on their jobs rather than their job security.