Effectively Managing Through a Business Restructuring & RIF

Document created by 1056927 on Oct 8, 2015
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Rick_Washburn-6.jpgBusinesses today face a fast-paced, competitive economic environment that requires agility and the ability to adopt to an ever changing landscape.  Mergers, acquisitions, divestitures, and consolidations are all business transactions that typically require restructuring and often are the catalyst for an employee reduction in force (RIF).


The first step when considering or planning for a RIF is to begin with the end in mind.  Envision how your organization will be structured to best position the business, post RIF, going forward.  As an effective HR business partner you will need to work with your senior leaders to help them think through, define and determine the “future state” that will put the organization in the strongest competitive position going forward.  This includes a robust discussion around determining what skills/positions will be required to support and drive the new business structure looking forward.  Ask yourself and your leadership team how does the business need to be structured and staffed post RIF. 


The “future state,” including the new organizational structure and staffing plan, will be the driving force behind shaping your RIF. Your RIF plan needs to be aligned with the needs of the business.  Once this alignment is achieved, as the HR leader, you can best navigate the WARN Act and other related regulatory issues, and be compliant doing so.  Organizations that fail to properly define their future structure and staffing requirements often find themselves reacting and focusing on the many technical provisions of the WARN Act as opposed to using a well thought out plan to navigate WARN. Understanding the provisions of WARN is key in helping your business successfully navigate it and remain compliant.


After a business develops an appropriate restructuring plan (and has considered alternatives to a RIF such as a hiring freeze, reduction in work hours, early retirement enhancements, etc. which may or may not completely meet its objectives) it may also then need to start thinking about a work force reduction plan and process.  Key elements of this plan include:


  • Determining what positions at which locations will be impacted and how many positions will be eliminated.
  • Laying out the timing of the RIF(s).
  • Assessing whether the RIF trigger WARN and whether or not the Older Workers Benefit Protection Act (OWBPA) come into play.
  • Deciding on the employee selection criteria used to determine which employees are RIFd.
  • Considering if voluntary layoffs be offered prior to mandatory layoffs and if incentives will be used to entice employees.
  • Determining if a severance package be offered and if so which parts of it are tied to a release which the impacted employees would have to sign as a condition to receiving certain severance benefits.
  • Considering if outplacement be offered to impacted employees (CAI strongly recommends this benefit).
  • Developing a detailed RIF implementation plan outlining roles and responsibilities, checklists, scripts, timing, locations, contact information, etc.  You cannot over plan for this critical event.
  • Detailing pre and post restructuring/RIF communications both in person and written “bulletins” to employees.
  • Strategies to minimizing potential workers compensation claims once RIF notices have been issued, assessing the risk of those who may be potential whistleblowers, etc.


There is no escaping the emotional and often depressing aspects of a RIF.  That said, a sensible, well planned process that is properly communicated and implemented will go a long way to minimize the negative aspects of a RIF, including potential employee challenges and litigation.


I attached a few resources I designed to assist with the RIF Process. These resources aren't meant to be comprehensive, but should get you off to a good start. You can also find more information on the WARN act The specified item was not found.Should you and or your leadership team need help in thinking through the effects of a specific business transaction, including restructuring and RIF implications, please give Tom Sheehan (919-325-4113) or myself (919-713-5247) a call today.

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